Owning Property in Portugal: Does It Make You a Tax Resident?

Owning property in Portugal doesn’t automatically make you a tax resident — but it can create financial obligations you need to understand. In this episode, we break down the key taxes and costs tied to property ownership in Portugal.

Key Financial Considerations:

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• Property Transfer Tax (IMT): A one-time tax paid at purchase, based on the higher of the purchase price or taxable value. Rates range from 0% to 8%, with luxury properties paying more.
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• Stamp Duty (Imposto do Selo): A flat 0.8% charge on the property’s purchase price.
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• Annual Municipal Property Tax (IMI): Similar to council tax in the UK, IMI runs between 0.3% and 0.45% for urban properties — higher for rural land.
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• Legal & Agent Fees: Expect about 1–2% for legal services; real estate agent commissions (around 5%) are typically covered by the seller.
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• Wealth Tax (AIMI): Applies only to the value of Portuguese property exceeding €600,000. Rates range from 0.7% to 1.5%, depending on the ownership structure and total value.
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Key Takeaway:

Buying property in Portugal brings tangible financial benefits — and responsibilities. While ownership alone won’t make you tax resident, it can signal “habitual abode” status, so careful planning is essential.