IMT and IMI in Lisbon: the essentials

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%.

To plan your purchase costs, use the IMT Calculator to estimate property transfer tax and stamp duty.

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.

Terms you will come across

The terms are given in Portuguese because that is how they appear in the documents — translating them helps you follow along, but it is not what the contract will say.

IMT Property transfer tax

Paid once, before the deed. The rate is progressive by bracket and depends on value and purpose — permanent home, second home, or other.

IMI Annual municipal property tax

Paid every year while you own the property, calculated on the taxable value. Each municipality sets its rate within the legal range for urban buildings.

VPT Taxable patrimonial value

The value assigned by the tax authority through a formula — area, typology, age, quality and a location coefficient. It is not the market price and is usually lower.

Imposto do Selo Stamp duty

Charged on the acquisition and, where there is a loan, on the financing as well. Settled together with IMT, before the deed.

AIMI Additional to IMI

A tax on the sum of taxable values held by one owner above a threshold. It mostly affects those holding several properties, not a single home.

ARU Urban rehabilitation area

A perimeter set by the municipality where rehabilitation works can qualify for tax benefits and reduced VAT. Much of central Lisbon falls inside one.

Mais-valias Capital gains

The difference between sale and purchase value, taxed as income. Works documented with invoices count towards the calculation and reduce the gain — keeping invoices is money.

What to budget beyond the price

In a Lisbon purchase, the surrounding costs add up quickly. Better to have them in the budget from the start.

• IMT, settled before the deed and calculable in the official simulator.
• Stamp duty on the acquisition and, with a loan, on the financing.
• Notary fees and registration costs.
• Bank valuation and loan arrangement fees, if financing.
• First-year IMI and condominium dues from the deed onwards.
• Mandatory building insurance and, with a loan, the associated life cover.
• Reassessment of the taxable value after significant works — future IMI rises with it.