PROPERTY

Buyers of real estate are subject to a one-time transfer tax, stamp duty, and specific fees. The transfer tax varies based on several factors:

• The transaction amount.

• The property's location, whether on the mainland or the islands.

• The intended use of the housing, such as primary residence or additional property, e.g., for rental purposes.

In total, the associated costs typically range between 9% to 11% of the purchase agreement value. For instance, when acquiring an apartment valued at €500,000, the investor can anticipate total expenditures of €556,750, inclusive of additional costs.

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Expenses when buying a new home to live in mainland Portugal

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Transfer tax:

• 0-8% (Property value of up to €570,000)

• 6% (Property value of €570,000 to €1,000,000)

• 7.5% (Property value of €1,000,000 or more)

Stamp duty:

• 0.4-0.8%

Legal and notarial support of the transaction:

• 2.5%

Registration of ownership:

• €250

Change of utility bill in case of purchasing a secondary real estate:

• €100-200

OWNERSHIP

TAXES

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In Portugal, the annual property tax ranges from 0.3% to 0.8% of the cadastral property value, with the specific rate determined by factors like property type (apartment or house), location, and age. Municipalities set this tax annually.

Urban real estate owners are also subject to the AlMI tax, a municipal property tax, which stands at 0.7%.

For residential real estate with a cadastral value exceeding €600,000, owners face an additional wealth tax:

• 0.7% of the amount surpassing €600,000 for the value range from €600,000 to €1,000,000.

• 1% of the amount exceeding €1,000,000 for the portion of the value beyond €1,000,000.

In cases where the property is rented out, owners are liable to a 25% tax on rental income.

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Utilities in Portugal, including water and electricity, are metered, with tariffs contingent on consumption volume. The less you consume, the lower the tariff. Central heating is uncommon, and gas heating is rare. Houses typically use electric or gas boilers to heat water. Air conditioners and electric heaters for heating are infrequently used due to high electricity costs, resulting in additional monthly expenses ranging from €100, with an average electricity cost of €50 per month. Private houses often rely on wood-burning fireplaces for heating.

Gas is the preferred cooking fuel, with central gas networks primarily available in large cities. In areas without gas networks, gas is purchased in balloons, commonly for villas, or delivered to special tanks for condominium apartment buildings. A gas balloon costs €50 and lasts a month for a family of four, while in other cases, gas is charged based on metered usage.

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For owners of real estate in multi-apartment condominiums, additional fees cover maintenance, including elevator upkeep, cleaning, repairs, security, and swimming pools. Monthly costs for these services range from €25 to €200.

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Internet, TV, and telephone connections are available at a cost ranging from €35 to €45, dependent on the chosen tariff and locality.

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Electricity, water, garbage collection:

• € 65 - 175 per month

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Maintenance of the building (elevator, cleaning, repairs and security):

• € 25-200 per month

SALES

Property sellers pay capital gains, real estate sales, and agency fees. If the seller reinvests the money from the real estate sale, they pay half the capital gains tax.

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Portuguese tax residents are exempt from paying capital gains tax when selling their primary home to buy a new apartment or house. To qualify as a tax resident, you must live in Portugal for at least 183 days a year.

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Selling expenses

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Capital gains tax:

• 28 % (Paid on the difference between the purchase and sale prices.)

Sales tax:

• 0.4 % (Payable on the cadastral value of the property.)

Agency fee:

• 3.7-6.2 % (Depends on the real estate agency and includes VAT.)