First of all, you should know that, in Portugal, the concept of property covers the "full property", which is based on the full and exclusive right of use, enjoyment and disposal of the immovable property. This right gives an important competitive advantage to the real estate system Portuguese.
In the area of taxation, keep in mind the relevant information on taxes, fees and tax benefits applicable to the assets.
The Municipal Property Tax on Onerous Real Estate Transfers and Stamp Duty are for the acquisition of real estate.
What is the City Tax on Onerous Real Estate Transfers?
What does this tax for?
It focuses on the value of the purchase and sale contract or on the tax asset value of the properties, whichever is greater.
The Tax results from the application of variable rates that, in the case of properties intended exclusively for housing, can vary between 0 and 6%. If located in the Autonomous Regions of the Azores and Madeira, they benefit from reduced rates.
What is Stamp Duty?
It is a tax that applies to all acts, contracts, documents, titles, papers and other legal facts or situations, including free transfers of goods. In the case of real estate acquisitions it is on the value of the purchase and sale contract or on the tax asset value of the properties, whichever is higher, and results from the application of the 0.8% rate.
What is the Tax Asset Value?
Is the amount entered in the building matrix on the settlement date. This matrix contains the characterization of the property, the location, its tax asset value and the identity of the owners. The matrices are updated annually with reference to December 31.
Who is responsible for the assessment of taxes?
To the interested party who buys the property.
When should these taxes be paid?
They must be paid before the conclusion of the deed of purchase and sale of the property. If the transfer takes place abroad, the payment of the tax must take place during the following month.
How should you proceed to settle taxes?
You should go to any Finance Service, through the Finance Portal or at a Ready Home Desk.
As a property owner, please keep in mind the following information:
What is the City Property Tax?
It is the municipal tax that focuses on the tax asset value of real estate.
Who is subject to payment of this tax?
Who owns a property on 31 December each year.
What is the amount of this tax?
In the case of urban properties (housing, commercial, industrial or for services, and others), it results from the application to the tax asset value of a variable rate between 0.3% and 0.5%, to be fixed annually by the municipalities.
When should this tax be paid?
Annually, compared to the previous year, within the following deadlines:
Amount equal to or less than €250 - An annual instalment in April;
Amount greater than €250 and €500 or less – Two instalments in April and November;
Amount over €500 - Three instalments in April, July and November.
How should you proceed to pay the tax?
In any Finance Service, CTT, ATM or Home Banking.
Please be aware that if you reside outside the European Union, you must appoint a representative with a tax domicile in the national territory, which can be done in any Finance Office or through the Finance Portal.
Whenever the tax asset value of an urban housing property is equal to or greater than 1,000,000 euros, a Stamp Duty rate of 1% applies.
There are an aggravated fees if the purchaser is a legal person resident in a country, territory or region subject to a clearly more favourable tax regime. In these cases, the fees are as follows:
Tax on Onerous Real Estate Transfers - 10%
Municipal Property Tax - 7.5%
Stamp Duty – 7.5% (for all urban buildings worth more than 1,000,000 euros).
Learn some of the tax benefits applicable to these taxes:
Tourist Utility and Housing Tourism
For a period of seven years, properties integrated in developments to which the tourist utility has been attributed or which are related to housing tourism may be exempt from municipal property tax.
Urban Rehabilitation
Properties that are the object of rehabilitation works by the owner may have benefits in the company's office of Municipal Property Tax and Tax on Onerous Real Estate Transfers.
Cultural heritage
Acquisitions of properties individually classified as of national interest, public interest or municipal interest, in accordance with applicable law, may have benefits in the form of Municipal Tax on Onerous Real Estate Transfers (depending on the application to be submitted before the act or contract and before the discharge), Stamp Duty and Municipal Property Tax.
THE INFORMATION PROVIDED DOES NOT DISPENSE WITH THE CONSULTATION OF APPLICABLE LEGISLATION