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Vicente Tavares
Your real estate consultant
+351 967707075
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Property Investment
Consultants, Algarve
TAXES
(When we just born two things we can't avoid:
death and taxes)
The good thing is:
there is no inehritance tax in Portugal.
Main taxes
applying when we buy a property are IMT and Stamp duty
IMT
| Values affected by IMT Tax |
Marginal Rate |
Deduction |
| Until 83,500 |
0% |
0 |
| From 83,500 until 114,800 |
2% |
1,670 |
| From 114,800 until 156,500 |
5% |
5,114 |
| From 156,500 until 260,900 |
7% |
8,244 |
| From 260,900 until 521,700 |
8% |
10,853 |
| Over 521,700 |
6% |
0 |
How it works: suppose you buy a
property for 250,000 euros, to calculate the tax ,will be multiplying this
value by 7% which would be 17,500 less 8,244 and the result 9,256 would
be the tax you would have to pay.
Stamp duty depends on the value of
acquisition but, it is small
enough to not worry about just 0.8% in most
cases.
Now you are a happy owner, don't
think there are no more taxes.
You have now IMI a tax for
the Town Hall which is for urban properties between 0,4%
to 0,8% of the declared value in the Property Registry. Most of the time
this value is outdated from the real commercial value. There is an
exemption for permanent residences for 6 up to 150,000 and 3 years
for residences between 150,000 and 225,000. No exemption from there.
Sewers tax - a tax Town Halls
charge yearly.
Value Added Tax
If you are an official resident and sell to buy another permanent residence house
and you invest all of the sale money in the next house, you will pay nothing.
The law gives you two years to choose the new house. The bad news are if you
are a non-resident, sell and want to take the money back to your country.
In this case you have to pay, but all yearly inflation rates are deducted, all
legal expenses for acquisition and selling the property, all maintenance
you have done in the last 5 years (keep the invoices). If you leave
for good tax is 25% over your profit.
Portugal vs Spain tax comparison
|
TAXES |
SPAIN |
PORTUGAL |
|
PERSONAL INCOME TAX (IRPF/IRS) |
15% - 45% (46K) |
12% - 42% (60K) |
|
Tax on non-residents (IRNR) |
25% |
25% (15% on lets) |
|
Special non-residents property tax |
3% pa on property value |
0 |
|
Real Estate Tax (Plusvalia/IMI) |
2% - 3.7% |
0.4% - 0.8% |
|
Capital gains Tax on Real Estate |
Residents: 15%
Non-residents: 35%
(+5% withholding) |
Residents: 50% to 100%exemption.
No-residents: 25% |
|
Wealth Tax (IP) |
0.2% - 2.5% |
0 |
|
VAT (IVA) |
4% - 7% - 16% |
5% - 12% - 21% |
|
Inheritance Tax (ISD) |
7.65% - 34% |
0
(immediate family) |
|
Property Transfer Tax |
7% (Stamp Duty) |
0 - 6% (IMT) |
As you can see, Portugal, with
the only exception of VAT has a much more benign tax system.
a
member:
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