New 7.5% IMT Rate for Non-Resident Property Buyers

Portugal iintroduced a significant change to the Municipal Property Transfer Tax (IMT) applicable to non-resident buyers of residential property.

Under the new rules, non-resident buyers are subject to a flat IMT rate of 7.5% when purchasing residential property in Portugal. This replaces the standard progressive IMT scale that generally applies to residents.

Key Exceptions - The 7.5% rate may not apply in the following situations:

1. Buyers Who Become Tax Residents - Individuals who become Portuguese tax residents within two years of purchasing the property may qualify for the standard IMT rules and request a refund of any excess tax paid.

2. Long-Term Rental Properties - The exception may also apply when the property is placed on the long-term rental market within six months of purchase and remains rented for at least 36 months during the first five years of ownership, subject to the applicable rental conditions.

3. Individuals Considered Residents Under Portuguese Tax Rules - Foreign nationals who meet the Portuguese tax residency criteria, including those spending more than 183 days in Portugal during a relevant 12-month period, are generally not treated as non-residents for these purposes.

The new measure is intended to address housing market pressures while encouraging long-term residence and rental supply.