The IMT (Municipal Property Transfer Tax) applies when purchasing property in Portugal and varies depending on the price, property type, and the buyer’s residency status.
The Portuguese government has announced its intention to raise IMT rates for non-resident buyers, aiming to moderate foreign demand and improve housing access for local residents.
While the proposal has generated discussion, it’s important to view it in a broader European context. A fundamental cornerstone of EU cooperation is that it should be easy to trade, travel, and relocate between EU countries. To ensure this, EU member states work together to uphold the four freedoms of the internal market — the free movement of goods, services, people, and capital.
Moreover, Article 24 on Non-Discrimination in international tax agreements establishes that nationals of one contracting state should not be subjected in another contracting state to any taxation that is more burdensome than what nationals of that other state face under the same circumstances. This principle aims to prevent direct discrimination. However, it does not necessarily cover indirect discrimination, situations where a tax rule appears neutral but, in practice, affects non-residents more severely.
In practice, states may apply different tax rules to residents and non-residents. This means that while the proposed IMT adjustment could be legally possible, it may still raise questions about its compatibility with EU principles that discourage discrimination against citizens of other member states.
It’s also worth noting that, according to Portugal’s National Statistics Institute (INE), only about 6.25% of all property transactions in Portugal in 2024 were carried out by non-resident buyers. When looking at the country as a whole, this group represents a relatively small share of the market, even though foreign interest is naturally higher in certain regions with stronger international appeal.
As the 2026 State Budget is still under discussion, the final details of any IMT reform are expected later this year. Until then, staying informed and planning carefully can help buyers avoid surprises and even discover new opportunities.
If you are considering purchasing a second home, it might be worth accelerating the process before any potential law changes take effect. At SkandiaMäklarna Real Estate, we closely monitor developments related to IMT and other tax updates. If you would like personal advice on how these changes could impact your property plans in Portugal, please don’t hesitate to contact us, we are here to help you make well-informed decisions with confidence.
