Purchasing real estate in Portugal involves more than just the property’s price tag. Prospective buyers should be prepared for additional costs and taxes that can range from 6% to 10% of the purchase price.
In this article, we provide a thorough breakdown of these expenses, including one-time taxes and fees, the costs associated with obtaining a loan, and annual property taxes.
Property taxes in Portugal: The Expert Outlook
As a global marketplace for international real estate, JamesEdition, in collaboration with local experts, provides an all-encompassing overview of property taxes in Portugal.
We have teamed up with Your Property Advisor (YPA) and consulted with co-founder Gonçalo Roxo, who brings over a decade of expertise in the Portuguese real estate sector, to offer an authoritative guide on this subject.
Gonçalo RoxoCo-founder of Your Property Advisor (Portugal)Your Property Advisor is a real estate consultancy that sells properties without maintaining a portfolio. This approach gives us the freedom to search for all available properties across Portuguese territory, providing a significant advantage for buyers. In a continuously expanding ‘seller’s’ market, a real estate consultancy that seeks to protect buyers' interests serves as a valuable solution to meet market needs.
1. Taxes and Fees When Buying a Property
When purchasing property in Portugal, several one-time costs must be considered.
Municipal Tax Over Real Estate Transactions (IMT)
Cost: 1-8%
The IMT is applicable on properties valued over €92,407 and ranges from 1% to 8%, depending on various factors such as the property’s value, type, location, and usage. For example, purchasing a property valued at €250,000 could result in an IMT of approximately €8,412.78.
To calculate the IMT: IMT = (Property Value × Rate) − Deductible Portion
The rate to be applied as well as the portion to be deducted are determined in the IMT tables on the Portuguese Finance Portal (Portal das Finanças). You can also calculate this on the Doutor Finanças website.
These values are updated by the State Budgets. In very specific circumstances foreseen by law, the transaction can be exempted from IMT.
For a property on mainland Portugal, intended as a primary residence with a tax value of €200,000 and a purchase price of €250,000, the IMT calculation would be: IMT = (250,000 × 0.07) − 9,087.22 = 8,412.78
Stamp Duty (Imposto do Selo)
Cost: 0.8%
This duty is 0.8% of the property’s value. So for a €250,000 property, the stamp duty would amount to €2,000.
To calculate Stamp Duty (‘IS’) = Property Value x 0.8%
Property Registration fee
Cost: typically €375 at Casa Pronta.
For the legal formalization of the transaction, there is a Property Registration fee of €375 at Casa Pronta. However, fees may vary if done at a notary’s office. Other additional costs include insurance premiums, condominium fees, maintenance, utilities, and furnishing costs.
Notary Fees
Cost: usually 1% plus VAT.
The notary fees can vary based on the complexity of the transaction and the notary office but are generally standardized at 1%. Typically, this means that notary fees will range from a few hundred Euros to over one thousand Euros, depending on the property’s value and the transaction details.
Agent Fees
Cost: 3-5%
Real estate commissions in Portugal typically range from 3% to 5% of the purchase price, plus 23% VAT, though this is usually paid by the seller.

2. Costs Associated with Taking Out a Loan
For buyers financing their purchase with a loan, these are the additional costs to consider.
Bank Fees
Cost: Approximately €1,000
If you take out a loan, there are extra costs to consider. Bank Fees for valuation and application processing typically amount to around €1,000.
Stamp Duty over Loan
Cost: 0.6% of the loan amount
Bank loans result in the payment of Stamp Duty on the amount of the loan. So, if you get a loan that covers 90% of the sale price of a €250,000 house, your loan will cover €225,000. You will then pay a Stamp Duty of €1,350, which is 0.6% of this amount.
Stamp Duty (‘IS’) over loan = Property Value x 0.6%
Mortgage Registration fee
Cost: €375 at Casa Pronta
If you take out a loan, it is necessary to also register the mortgage on the property. At Casa Pronta, this would mean that you pay an extra €375, in addition to the above-mentioned €375 property registration fee.
Life Insurance and Multi-risk Insurance
Cost: varies based on several factors.
Banks require Life Insurance to cover the death of the contract holder, with costs varying based on several factors. Multi-risk insurance is also necessary, with costs depending on the property’s value.

3. Annual Property Taxes
Property owners in Portugal are subject to annual taxes, primarily the Municipal Property Tax (IMI) and, in some cases, the Additional to the Municipal Property Tax (AIMI).
Municipal Property Tax (IMI)
Cost: 0.3-0.8%
IMI rates range from 0.3% to 0.8% of the property’s taxable value, with urban properties typically taxed between 0.3% and 0.45%, and rural properties at 0.8%. Properties are revalued every three years, which may adjust the IMI amount.
The taxable value of your property can be calculated using the Portuguese Finance Portal (Portal das Finanças).
Additional to the Municipal Property Tax (AIMI)
Cost: 0.4-7.5%
AIMI applies to higher-value properties:
- Individuals: 0.7% for property values between €600,000 and €1 million, and 1% for values exceeding €1 million.
- Corporate entities: A flat rate of 0.4% applies, increasing to 7.5% for properties held in tax havens.
- Exemptions: Primary residences are exempt up to €1 million.

4. Other Additional Costs
In addition to registration and tax costs, homebuyers should also account for various other expenses. These include insurance premiums, condominium fees, and additional taxes. You should also consider ongoing costs such as property maintenance, furnishing, utilities (water, electricity, gas), and communication services, all of which should be factored into the overall budget.
Conclusion
When purchasing property in Portugal, buyers should expect to incur approximately 6% to 10% of the property value in additional costs.
These include taxes, registration fees, and other charges. For instance, buying a property valued at €250,000 would result in about €8,412.78 in IMT, €2,000 in stamp duty, and various other fees, leading to significant upfront costs.
Understanding and preparing for these expenses is essential for effective financial planning. For more information on securing a loan, read our article: Getting a Mortgage in Portugal as a Foreigner.
Explore the buying process with our expert guides to Portugal real estate: