T02E - IMI - Real Estate Tax

Note: These guidelines are intended only as a summary.  Tax laws and regulations change frequently and sometimes unexpectedly.  It is strongly recommended that you seek professional advice.

The Municipal Property Tax Code establishes that one of the objective elements included in the urban buildings is the average construction value per square meter, to be fixed annually.

The average value of construction per square meter has risen. This value serves as the basis for calculating the patrimonial value of properties (VPT), which in turn is used to calculate the Municipal Property Tax (IMI), which therefore became more expensive for newly built or rehabilitated houses.

IMI Tax (Imposto Municipal sobre Imóveis)
The local tax on real estate (IMI) is a municipal tax levied on the net worth of property situated within the territory of each municipality. Immovable property is classified as rural, urban or mixed.

Levy of Tax
The taxable person is the owner, the beneficiary or the party having the use or the benefit of the property on the 31st of December of the year to which the tax relates. 

In 2025, you will pay the IMI for the properties you owned on 31st of December 2024.

Exemptions
CIMI provides for two types of exemption from IMI. The permanent exemption, intended for low-income households. And the temporary exemption, applied to new properties, being granted for a maximum period of three years.

Regardless of the type of IMI exemption in question, its attribution depends on the household income and the Tax Asset Value (VPT) of the property.

Permanent exemption
The IMI Code provides for an automatic tax exemption for taxpayers whose annual gross household income does not exceed €16,398.17 (2.3 times the annual value of 14 x the Social Support Index – IAS*) and the overall tax asset value of all rustic and urban buildings belonging to the household does not exceed €71,296.40  VPT Valor Patrimonial Tributário (10 times the annual value of the 14 IAS*).

This exemption is granted automatically by the Tax and Customs Authority, based on the information available to it.

This tax benefit is permanent but is revised annually according to declared income. Which means that, if at any time you exceed  €16,398.17  in annual gross income, you are no longer entitled to exemption.

* The IAS value of 2024 equals €509.26, to be charged in 2025

Exemption for beneficiaries of undivided inheritances
With the Law No. 75-B/2020 of 31st of December, changes to the permanent exemption were introduced in the case of properties belonging to undivided inheritances of low-income households. Please contact your accountant for more information.

Temporary exemption
The IMI exemption applicable for three years to buildings or parts of urban residential buildings built, extended, improved or acquired for the taxpayer's own permanent residence or that of their household, whose total gross household income does not exceed €153,300.00, or for residential rental, can now be extended for a further two years.

Those who buy a house can request exemption from IMI for a maximum of three years, provided that it is for their own permanent residence or that of their household.

If the property has VPT (Valor Patrimonial Tributário) not exceeding €125,000.00, and the owner has a household income of less than €153,300.00 in the previous year (gross income, before tax deduction), they are entitled to an exemption from IMI. The allocation of the property as own and permanent housing should be done within a period of 6 months, from the date of acquisition or completion of construction. This exemption must be requested within 60 days after the housing has been allocated.

Also exempted from local real estate tax are:

• Properties classified as national monuments or classified as of public or municipal interest

• Buildings or parts of buildings dedicated to shops with history, recognised by the municipality as establishments of historical and cultural interest

• Urban buildings, or autonomous fractions, completed more than 30 years ago or located in urban rehabilitation areas

• Rustic buildings intended for forest exploitation that are adjacent to rustic buildings subject to a forest management plan.

• Urban properties intended for the production of energy from renewable sources. In this case, the IMI exemption is partial (50%)

• Energy efficient properties (up to 25%).

The temporary exemption can only be attributed twice, at different times, to the same owner or household.

Rental Support Program
The Mais Habitação law includes an IMI exemption for properties built, expanded, refurbished, or acquired under the Rental Support Program (PAA), , when allocated to residential letting and will only apply when the letting is for the tenant's permanent dwelling. Please check with your tax advisor if you are eligible.

IMI exemption can be requested on the Finanças website by typing on the search box Submeter Pedido Insenção IMI and by choosing the option according to your situation on the drop box.

Taxable Amount
The taxable amount of the property is represented by its net assets value as determined under the terms of the Evaluation Code.  Meanwhile, the taxable amount is the same as the rateable value (“valor tributável”)

Rates
The Local Real Estate Tax rates are as follows:

*This rate may, in the specific circumstances of paragraph 18 of Article 112 of the IMI Code, go up to 0.5%

It is the responsibility of the municipality to define each year the applicable rate. 

Properties that are owned by Offshore Property Companies (with domicile in “black-listed + 1 revoked” territories) are assessed at the flat rate of 7.5%, regardless of the type of property.

On the following website you can check the rates here per municipality.

IMI Familiar
There are municipalities that grant a reduction in IMI to families with children.

To be entitled to the discount, the family must cumulatively meet the following criteria:

• the dependents must be under 25 years of age and not earn income

• the family must be the exclusive owner of the property

• the property is used for own permanent housing

• the property must be identified as the family’s tax residence with the address registered at Finanças for tax and notification purposes.

The discount depends on the number of children. You will find if your municipality grants this on the Finanças website, after selecting the year + district and on the next page behind municipality, you will find it in the last column: “Dedução fixa por agregado” + Info. The rates may change every year. It is not necessary to make any application. The discount is automatically applied by the Finanças when the household meets the required criteria, based on the information held by Finanças, like IRS declarations etc.

For the purposes of granting the discount, the composition of the household is that which occurs on the last day of the preceding year to which the tax relates. I.e. for the IMI of 2025, the composition of the family as of 31st of December 2024 is taken into account.

Assessment & Payment
The tax is assessed each year for each municipality by the Central Services of the Directorate General for Taxation, based on the values and of the registered owners on 31st of December of the year to which the tax relates. 

The deadlines for making IMI payments on Portugal mainland* are:

• If the amount to be paid is up to €100.00, it must be paid once, only in May

• Two instalments (more than €100.00 and equal to or less than €500.00): in May and November

• Three instalments (more than €500.00): in May, August and November.

*For Madeira a resolution has been proposed on 11/12/2024 to give owners five instalments if the amount is higher than €100: July, August, September, October and November 2025.

An advice for payment, specifying all relevant information concerning the property in question, as well as its taxable value and tax payable will be sent to each taxpayer in April and can also be found on the Finanças website.

If you prefer to pay the full amount at once, even if the amount exceeds €100.00, it is possible to make the full payment in May.

To do this, just pay attention to the first notice. There are two references available:

• On the left side of the notification, you will find the reference for payment of the first instalment. If you want to pay for IMI in a fractional way, that is the one you should use

• At the end of the page, on the right side, an alternative reference appears which should be used to pay for IMI at once. Please note, in this case the payment period should be until 31st of May.

After receiving notification from the Tax and Customs Authority, you can pay IMI through the MultiBanco (ATM) or through home banking, choosing the option "Pagamentos ao Estado".

You can also go to the Finanças office and pay it there.

When you did not receive your notification, you can find the amount on the Finanças website (log in first): Cidadãos > Os Seus Serviços > Consultar > Imóveis > Notas Cobrança

It is also possible to set up a direct debit (see separate afpop Fact sheet). To do this you must make the application through the Finance Portal. This option can be useful to avoid fines and extra costs if you miss the deadlines.

What happens if the IMI tax is not paid?
If the IMI payment is made after the legal deadline, the owner is subject to penalties. In this case, a debt certificate is issued, and tax enforcement proceedings are initiated. As part of this legal action, the owner is notified to voluntarily pay the missing tax within 30 days. In addition, you’ll be charged for let payment interest and procedural fees. If voluntary payment of the tax debt is not made, the property may be sold through court if it is not intended for permanent housing or is of high value.

AIMI 
First introduced in 2017, the Adicional Imposto Municipal Sobre Imóveis (AIMI) affects owners with a share in Portuguese property worth over €600,000.00. If you and your partner jointly own the property, you only pay AIMI if the value is over 1.2 million euros. 

Members, who own properties with a rateable value over €600,000.00, or their property is owned by a company, will receive an additional IMI bill. 

AIMI is a tax added to your regular IMI. This tax substituted the former annual Imposto de Selo (Stamp tax) levied on properties over one million euros of rateable value - VPT. This tax is levied on habitational properties owned by individuals or companies.

Please note that the amounts taxed are on the total number of properties owned by the same person. This means that if you have two properties where one has a VPT of €200,000.00€ and the other €500,000.00 you will pay this additional tax on €100,000.00, as both property values combined exceed €600,000.00€. 

This additional tax is levied on amounts over €600,000.00 as the IMI tax is payable on amounts under that limit.

For individuals, the following AIMI taxes are applied:

• Over €600,000.00 to €1,000,000.00€: 0.7%

• Over €1,000,000.00: 1% 

• Over €2,000,000.00: 1.5%

Properties owned by companies are taxed at 0.4% on any VPT value. When the company is based in countries where the fiscal system is considered favourable (Tax Havens black-listed + 1 revoked) this additional tax is charged at 7.5%.

Individuals will see their properties taxed at 0.7% when the VPT of all the properties owned by them reaches the amount of €600,000.00. 

In any of the cases above, when the VPT reaches one million euros, the additional tax becomes a flat rate of 1%. For example, a privately owned property with a VPT of €1,200,000.00 will be charged at 0.7% for the difference between €600,000.00 and €1,000,000.00 and at 1% for the remaining €200,000.00.

For couples with jointly owned property:

• Up to €1,200,000.00: 0%

• Over €1,200,000.00: 0.7%

• Over €2,000,000.00: 1%

• Over €4,000,000.00: 1.5%

Married couples or couples in a civil partnership (União de Facto) may opt for joint taxation under AIMI, by submitting the Declaração de Opção dos Sujeitos Passivos Casados or in a União de Facto, adding in this case the taxable equity values ​​of the buildings of which each of them is holder, with a single settlement of AIMI.

When this option is exercised, the limit from which this tax is charged is multiplied by two, that is, the AIMI is levied on amounts greater than €1.200.000,00 Declaração de Opção dos Sujeitos Passivos Casados or the União de Facto must be delivered from 1st of April to 31st of May, exclusively through the Finanças Portal.

If this declaration is not submitted within the established period, the AIMI is levied to each of the spouses, on the sum of the values ​​of the properties that were recorded on 1st of January of the year to which the AIMI relates in the respective ownership.

The AIMI will be assessed every year in June and the payment must be made in September.