Taxes in Portugal

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Portugal has an attractive tax system: tax rates are generally lower than in other European countries and there is a so-called “exceptional tax regime” for certain tax residents that considerably reduces expenses associated with business and other activities.

Individuals that spend more than 183 days a year in Portugal are considered tax residents.

Transaction, registration and ownership taxes

Stamp duty (Imposto do Selo or IS) is 0.8% and the title deed transfer tax (Imposto Municipal sobre Transmissões or IMT) is 6–8%. Buyers pay both taxes upon purchase of the real estate.

Annual real estate tax (Imposto Municipal sobre os Imóveis or IMI) for owners is 0.3–0.8% depending on municipality.

Capital gains and inheritance taxes

Capital gains tax is 28%, for non-resident taxpayers only, and paid upon sale of the property. It is calculated on the difference between the purchase price and the sale price.

There is no such thing as inheritance tax in Portugal, but instead, a stamp duty (Imposto do Selo) of 10% must be paid.

Income and corporate taxes

Non-residents pay 25% income tax on earnings in Portugal (employment or pensions). Earnings from dividends and other investments are taxed at 28%. The fixed tax rate on rental income is 15%.

According to Henley & Partners, non-tax residents affiliated with countries that have a double taxation treaty with Portugal pay reduced tax on dividends (15%), royalties (10%) and capital gains (10%). They can also be exempt from tax on income from professional activity or employment in Portugal.

For tax residents, there are progressive tax rates from 14.5 to 48%, depending on the revenue band.

Income, €	Rates, %
Under 7,112	14.5
7,113–10,732	23
10,733–20,322	28.5
20,323–25,075	35
25,076–39,967	37
39,968–80,882	45
Over 80,883	48

In addition to income tax, there is an additional charge of 3.5%.

Incomes exceeding €80,000 are charged 2.5% solidarity tax and 5% for incomes exceeding €250,000.

Corporate tax is 21%.

Exceptional tax regime

There is an exceptional tax regime for Non-Habitual Residents (NHR). This applies to foreign tax residents coming to reside in Portugal permanently but who did not have a residence permit during the last five years. This programme aims to attract highly skilled individuals, medical professionals, teachers, IT specialists and investors.

According to Henley & Partners, income received under the NHR tax regime on the territory of Portugal is taxed at 20%. Income from employment, entrepreneurial activity abroad and pensions are exempt. NHR status is granted for 10 years.

Participants of the investor residence programme “Golden Residence Permit” can claim NHR as well.

Disclaimer: the information in the above article is for reference and may be subject to change over time. Persons interested in exact calculations should contact a certified tax specialist in this country before purchasing property in Portugal.

Taxes in other countries:

Taxes in France

Greece property tax for foreigners in 2024

Taxes in Italy

Property buying guide for Portugal

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