Portugal Property Taxes & Insurance

Taxes & Insurance are not everyone's cup of tea, but they are critically important when making your property investment.

Property Taxes & Insurance are not everyone’s cup of tea, but they are critically important when making your property investment. With tax season here we’re tackling these two bitter pills straight on so you can be better informed. 

 

Below we’ve covered both Portugal Property Taxes and Insurance, in what we hope is a simple to understand overview so you have the basics of what you need with minimal pain.

 

Keep in mind however these points are highly dependent on your personal situation and will require proper consultations with legal and finance specialists for the most effective options for you. As you progress through your purchase we will be happy to facilitate professional consultations for you should you need. 

Portugal Property Purchasing Taxes

The general average to expect when purchasing a property in Portugal is typically 7-10% of the property purchase price broken down as follows:

 

Purchase Tax (IMT):

0% – < €92,407 

2% – 8% – Residential Property

6.5% – Commercial Property

 

Stamp Duty (Imposto Selo):

.8%

 

IMI Tax (Dependant on Municipality):

.03% – .045%

 

Wealth Tax (if your stake is >€600k):

.4% – 1.5% Individuals

.4% Coperations

 

Allowance provided for couples with joint ownership tax only applicable to properties above €1.2m

 

Land Registry + Notary Fees

.2% – 1.2%

 

Inheritance Tax:

10% – when the property is passed to recipients other than spouses, children, or parents. 

Portugal Property Insurance

Life Insurance Policy – Required with financing and your bank will provide you with expectations. Most banks will have insurance policies available for you to consider, and most will allow for you to have your coverage with an independent company. 

 

Building Insurance – Also required with financing. Coverage will include fire, storms, flooding, and electrical damage. This coverage often also includes a level of contents insurance. 

 

Multi-Risk Insurance – Optional and typically an extension of building insurance coverage. 

 

Contents Insurance – Coverage for movable goods and damage. This coverage is usually part of the homeowner’s building insurance and an additional contents policy is not usually required, these may differ depending on the coverage provider so best to check your plan. If you are renting your property a separate contents insurance policy is advisable. 

 

Foreign Insurance – coverage from outside of Portugal is possible you will however need to check the company you are considering allows for coverage in Portugal. 

And there you are, as short and as sweet as we could possibly make this subject. Complexity is in the details and again will depend on your personal circumstances so we strongly advise you to speak to qualified professionals in advance and when finalising your purchase as tax requirements can change.

We hope this is helpful to you, if you have questions please don’t hesitate to get in touch, we’ll be happy to put you in touch with our team of experienced specialists.

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