IMT and IMI in Lisbon: the essentials
Quick definition
IMT (Municipal Property Transfer Tax) is paid once, at purchase. IMI (Municipal Property Tax) is paid annually while you own the property. In Lisbon, these two taxes are significant costs to consider in financial planning.
IMT: when it applies
IMT is paid before the deed in Lisbon — without proof of payment, the notary cannot proceed. The rate varies according to property value and purpose (permanent residence, secondary home, or investment). There are exemptions for permanent residence up to certain values, which are periodically updated. The calculation is progressive, with rates between 0% and 7.5%.
IMI: the annual property tax
IMI is charged annually by the Lisbon municipality based on the property's Taxable Patrimonial Value (VPT). The rate in Lisbon typically ranges from 0.3% to 0.45% of VPT for urban buildings. Payment can be made in a single installment or divided into 2-3 installments throughout the year. Owners receive the collection notice by mail or through the Tax Portal.
Other ownership-related costs in Lisbon
Besides IMI, owning a property in Lisbon involves other recurring costs: condominium fees (if applicable), building insurance (mandatory), sewage and urban waste fees. For rented properties, there's also taxation on rental income. It's important to consider all these costs when calculating the profitability of a real estate investment in Lisbon.
Common pitfalls
Frequent mistakes in Lisbon include: not budgeting for IMT in purchase costs (can represent 6-7% of value), being unaware of exemptions available for first home, not updating fiscal address after purchase (delaying IMI notifications), and ignoring that VPT can be reassessed after significant works, increasing future IMI.
Frequently Asked Questions
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