IMI - Property tax in Portugal

When buying a house in Portugal, you have to pay an annual tax on your property. The Portuguese property tax – which is called in Portugal: Imposto Municipal sobre Imóveis (IMI) - is a municipal tax. 

When do you have to pay property tax?

Anyone who owns property in Portugal on 31 December of any year is in principle liable to pay IMI for that year. You will always receive the assessment of this municipal tax in April. The IMI assessment you receive in April relates to the previous year.

How is the IMI calculated?

The property tax is levied on the "Valor Patromonial" of the property. You can find the "Valor Patrominial" of your Portuguese property on the extract of the tax office, also called "Caderneta Predial". This "Valor Patrominial" is the result of a valuation that takes into account the location, condition, quality, size and year of construction of the property.

A percentage is charged on this "Valor Patrominial" as a municipal tax. Each municipality in Portugal has its own rate for the property tax and municipalities can adjust this per year. The rates for houses vary between 0.3 and 0.5 percent (differs per municipality, see full list of all councils and the applicable 2021 rates here) and the rate for agricultural land is 0.8 percent. If there are homes that were last valued before 2004, a rate applies between 0.4 and 0.8 percent of the registered value at the tax authorities.

How can you pay the tax?

Payment of the IMI can be made in Portugal at the tax office, the post office and at any multi-bank ATM. If you are not in Portugal, you can make the payment via the online platform of the tax authority or via online banking of your Portuguese bank account. When you have online banking from a Portuguese bank account, you can use the reference number on the bill to pay online via the option "Pagamento aos Estados" with your online banking. It is also possible to set up an automatic debit to pay the tax.  See for this the explanation of the Portuguese tax authorities.

Please note: Although the tax authorities now send your tax bills abroad, payments cannot be done by Direct Debit or Bank Transfer from a non-Portuguese bank account. 

Permanent Exemption (Low-Income Households)

When it applies:

• If your household’s annual gross income does not exceed 2.3 times the Indexante dos Apoios Sociais (IAS)—that is up to €16,398.17 for 2024 (and €16,824.50 for the IMI due in 2025)

• And the total VPT (Valor Patrimonial Tributário) of all your properties does not exceed 10 × IAS: up to €71,296.40 in 2025.

• The property must be your primary residence (morada fiscal)—although there are exceptions (e.g., moving to a nursing home while being able to demonstrate habitual residence before)

• This exemption is granted automatically, by the Tax Authority, provided IRS was filed correctly 

Temporary Exemption (New Primary Residence Acquisition)

When it applies:

• For properties intended as habitação própria e permanente (your primary residence)

• Automatically applies for the first 3 years following acquisition or completion of construction

• Conditions include:

  • Property VPT ≤ €125,000

  • Household taxable income ≤ €153,300

  • You must register the property as your morada fiscal within six months of acquisition or completion

• The exemption may be extended for an additional 2 years (totalling 5 years) under the Programa Mais Habitação, but only if the municipal assembly approves it. This is not automatic—if approved, you must notify the Tax Authority by December 31 of the current year for the extension to apply in the next calendar year.

If an exemption is not possible, maybe you can request a discount?

In addition to exemption options, there are also opportunities to apply for a discount for the IMI. The possibilities for discounts differ per municipality. In some municipalities, the following discounts apply:

1) Rented property: 20% reduction (art. 112, no. 7 of the IMI code);
2) Property with energy class A or higher, or of which the class has been increased by two classes after improvement. In some municipalities, these homes can receive a discount of 25% for the IMI assessment (art. 44-B of EBF) for up to 5 years;
3) 30% discount for IMI may apply in areas subject to urban renewal or depopulation (Art. 112, No. 6 of the IMI Code);
4) 50% discount for IMI of buildings used for the production of energy from renewable sources (art. 44-A of the EBF); and buildings of public interest, with municipal value and cultural heritage, may also qualify for a 50% discount in IMI (Article 112, No. 12 of the IMI Code);
5) Discount for each child, depending on the municipality, there may be a reduction of IMI in urban properties, intended for private and permanent housing. The discount is 20 euros for those with 1 child, 40 euros for 2 children and 70 euros for those with 3 or more children (Article 112-A of the IMI Code).

To apply for IMI exemption, you can go to the 'Departamento das Finanças' closest to the location of your home or apply directly on the online portal, where all options are available.