This article on taxes in Portugal covers what you pay as a resident, what you pay as a non-resident, and what changes when you buy, own, rent out, or sell a property. Every figure below is drawn from the fiscal values registry, so the numbers update from one settings screen rather than being retyped each January.

Tax is personal. The framework here is accurate and current. What you actually pay depends on your income sources, your residency status, the double taxation treaty between Portugal and your home country, and your own circumstances. Take professional advice before you move and before you buy.

Are you a tax resident?

Everything on this page turns on one question. You become a Portuguese tax resident if you spend more than 183 days in Portugal in any twelve month period, or if you keep a home here in conditions that suggest you intend to live in it as your habitual residence. Article 16 of the IRS Code sets the test.

Tax residency is not the same as legal residency. You can hold a residence permit and not be a tax resident. You can be a tax resident without a permit. The two are decided by different authorities under different rules.

Residency status changes the property transfer tax you pay by tens of thousands of euros on a mid-priced home. It is worth settling before you sign anything.

Income tax: IRS

Portuguese income tax is called IRS, Imposto sobre o Rendimento das Pessoas Singulares. Residents are taxed on worldwide income. Non-residents are taxed on Portuguese-sourced income, with some categories now requiring worldwide income to be declared so the correct rate can be found.

The old NHR regime, for existing holders only

The Non-Habitual Resident regime ran from 2009 to the end of 2023. It offered a flat 20% rate on qualifying Portuguese income and broad exemptions on foreign income, including pensions, for ten years.

The NHR closed to new applicants on 1 January 2024. A transitional provision let people already in Portugal register until 31 March 2025. If you registered before that date, you keep the status and its benefits for the full ten year period from the date you registered. If you are moving now, the NHR is not available to you.

IFICI, the current regime

IFICI, Incentivo Fiscal à Investigação Científica e Inovação, replaced the NHR on 1 January 2024. It is often called NHR 2.0. It is significantly narrower than the original.

You qualify only if all three apply:

You are a new tax resident and have not been resident in Portugal in the previous five years.
You work in an approved high-value sector: extractive and transformative industries, information and communication, scientific research and development, higher education, healthcare and related services, green energy, or manufacturing. Whether your role qualifies depends on your job title and your employer's classification, not on the sector alone.
You hold at least a Bachelor's degree, EQF Level 6 or equivalent, plus three years of relevant professional experience, or you hold a PhD.

IFICI gives a 20% flat rate on qualifying Portuguese employment and self-employment income for ten years, plus exemptions on most foreign-sourced income.

Who does not qualify, and this is the part that surprises people. Retirees living on a pension do not qualify. D7 holders living on passive income do not qualify. Remote workers in general professions such as marketing, sales, design, writing or project management do not qualify unless the specific role falls under an approved sector. IFICI was built for highly qualified professionals in innovation-driven fields. It is not a general tax break for foreigners.

Standard IRS, what most new residents pay

If you do not qualify for IFICI, you pay standard Portuguese income tax on worldwide income at progressive rates from 12.5% to 48%, across 9 brackets.

The rates are marginal. A person whose income reaches the third bracket does not pay the third bracket rate on everything they earn. They pay the first bracket rate on the part of their income that fits in the first bracket, the second rate on the next part, and so on.

Two solidarity surcharges apply on top. Income above €80,000 carries an additional 2.5%. Income above €250,000 carries 5% on the excess.

Foreign pensions are taxed as regular income at standard IRS rates. This is the single largest change from the old NHR regime, which exempted them. If your retirement plan was built around the NHR pension exemption, speak to a tax adviser before you finalise anything.

Source: Lei n.º 73-A/2025, OE2026, art. 68.º CIRS. Verified 28 August 2026.

Buying a property: IMT

IMT, Imposto Municipal sobre as Transmissões Onerosas de Imóveis, is the property transfer tax. It is paid once, at purchase. The rate depends on the property value, its intended use, and since 2026 on whether you are a Portuguese tax resident.

The non-resident rate

Decreto-Lei n.º 97/2026, art. 17.º CIMT introduced a flat 7.5% IMT rate for non-resident buyers, in force since 25 May 2026. There is no progressive scale and no initial exemption. Tax is charged from the first euro.

The rate applies only to urban buildings and fractions destined for housing. Building land, commercial property, industrial property and rústicos are unaffected and keep the normal rates for every buyer. A flat you intend to run as Alojamento Local still counts as housing, because AL is an activity registration and does not change how the property is licensed.

Three situations remove the surcharge:

You were already a Portuguese tax resident at the time of purchase.
You become a Portuguese tax resident within 2 years of the purchase.
You let the property at a controlled rent of no more than €2,300 per month, signing the lease within 6 months of buying and keeping it for at least 36 months, consecutive or not, within the first 5 years.

The mechanism matters for your cash flow. You pay the full 7.5% at the deed. Once you meet one of the conditions, you apply to the tax authority to cancel the charge and refund the difference against the normal rates. It works as a refundable deposit, not as an alternative rate charged up front.

Resident rates: primary residence, mainland

Purchase price	Rate	Deduction
Up to €106,346	0%	—
€106,346 – €145,470	2%	€2,126.92
€145,470 – €198,347	5%	€6,491.02
€198,347 – €330,539	7%	€10,457.96
€330,539 – €660,982	8%	€13,763.35
€660,982 – €1,150,853	6%	—
Above €1,150,853	7.5%	—

Calculate as price multiplied by the rate, minus the deduction. In the Azores and Madeira every threshold is 25% higher.

Resident rates: second home or investment property, mainland

Purchase price	Rate	Deduction
Up to €106,346	1%	—
€106,346 – €145,470	2%	€1,063.46
€145,470 – €198,347	5%	€5,427.56
€198,347 – €330,539	7%	€9,394.50
€330,539 – €633,931	8%	€12,699.89
€633,931 – €1,150,853	6%	—
Above €1,150,853	7.5%	—

There is no initial exemption on a second home. Tax starts from the first euro.

IMT Jovem, for buyers aged 35 or under

First-time buyers aged 35 or under purchasing a primary residence pay zero IMT on properties up to €330,539. Partial exemption applies up to €660,982. In the islands the equivalent limits are €413,174 and €826,228.

Purchase price	Rate	Deduction
Up to €330,539	0%	—
€330,539 – €660,982	8%	€26,443.12
€660,982 – €1,150,853	6%	—
Above €1,150,853	7.5%	—

Worked example

Take a €350,000 apartment in Porto.

Scenario A, you are a Portuguese tax resident buying your primary residence. The property falls in the 8% bracket. Applying the rate and subtracting the deduction, €350,000 multiplied by 8% minus €13,763.35 gives IMT of €14,236.65. Add stamp duty at 0.8%, which is €2,800. Total tax at the deed is €17,036.65.

Scenario B, you are a non-resident. A flat 7.5% on €350,000 gives €26,250. Add stamp duty of €2,800. Total tax at the deed is €29,050.

The difference between the two on the same property is €12,013.35. Residency status is a financial decision worth planning before you buy, not a bureaucratic detail settled afterwards.

When IMT is paid

CIMT art. 36.º, redação DL 97/2026 changed the payment window. IMT can now be paid on the day the guia is issued or within the following 30 days, after which the liquidation lapses. The guias must still be issued and the tax settled before the deed is signed. Ask your lawyer to confirm payment has cleared before the notary appointment.

Other IMT rates

Rústicos, rural land: 5%
Other urban property, including commercial: 6.5%

Stamp duty: Imposto do Selo

A flat 0.8% of the purchase price. It applies to everyone, regardless of residency status or property type, and is paid at the same time as IMT.

If you are taking a mortgage, additional stamp duty of 0.6% applies on the loan amount.

Owning a property: IMI and AIMI

IMI, the annual municipal property tax

IMI is calculated on the VPT, the official taxable value registered with Finanças, which is typically well below market value. Each municipality sets its own rate within the legal band:

Urban properties: 0.3% to 0.45% of VPT
Rural properties: 0.8% of VPT

IMI is billed once a year, with notices sent in the spring. The number of instalments depends on the tax due, not on the VPT. Up to €100 is paid in one instalment in May. Between €100 and €500 is split into two, in May and November. Above €500 is split into three, in May, August and November.

AIMI, the additional tax on higher-value holdings

AIMI applies only when an individual's total Portuguese property VPT exceeds €600,000, or €1,200,000 for couples filing jointly. Rates run from 0.7% to 1.5% on the excess. Most single-property owners never reach the threshold.

Renting a property out

Rental income from a Portuguese property is taxable in Portugal.

The general rate for non-residents is 25% on gross rental income. Decreto-Lei n.º 97/2026 introduced two lower rates for residential lettings: 10% where the rent stays within the moderate limit of €2,300 per month, and 5% under the accessible rent regime.

Residents pay at progressive IRS rates, with the option to deduct eligible expenses.

If you rent through Airbnb, Booking.com or a similar platform, you need an Alojamento Local licence from your municipality. AL carries its own registration, tax and local regulation, and several municipalities restrict new licences in specific parishes. Take advice from a Portuguese accountant, a contabilista, before you start.

Selling a property: capital gains

Capital gains on Portuguese property are taxable.

The 2023 State Budget repealed the flat 28% rate that previously applied to non-residents. Residents and non-residents are now taxed on the same basis: 50% of the gain is added to your other income and taxed at progressive IRS rates.

Non-residents must declare their worldwide income so the tax authority can determine the correct marginal rate. Without that declaration the highest bracket is applied.

Two exclusions are often missed. Properties acquired before January 1989 are outside capital gains tax entirely. The acquisition value is also updated by an official inflation coefficient published each November, which reduces the taxable gain, and it helps most where the property has been held for a long time.

Residents selling a primary residence can reinvest the proceeds in another primary residence in Portugal, the EU or the EEA and avoid the tax, subject to strict conditions on timing and occupation. That relief is not available to non-residents.

Renting as a tenant: the IRS deduction

If your landlord has registered the lease with Finanças, you can deduct rent paid against your IRS. The annual maximum is €900 in 2026, rising to €1,000 from 2027.

The deduction depends entirely on the contract being registered. If a landlord refuses to register, you lose the deduction and you have no proof of tenancy. Treat that refusal as a reason to walk away.

Where to get advice

Use a Portuguese contabilista certificado for annual filing and for anything involving rental income or a sale. Use a lawyer, an advogado, for the purchase itself and for anything involving residency status. The two roles do not overlap and each will tell you when you need the other.

Figures on this page carry their source and the date a human last verified them. Where a number has moved since, the source line is the place to start.