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Property tax in Lisbon is straightforward once you understand the basics. The main tax is IMI (Imposto Municipal sobre Imóveis), calculated at 0.3% of your property's official fiscal value in 2025, with both locals and foreigners paying identical rates.
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Lisbon applies a 0.3% IMI rate to your property's fiscal value (VPT), resulting in annual costs of €600 for a €200,000 apartment or €3,000 for a €1 million property.
Foreign buyers pay the same rates as locals, with potential exemptions for main residences under €125,000 fiscal value and specific income thresholds.
| Property Value | Annual IMI (0.3%) | Payment Schedule |
|---|---|---|
| €200,000 | €600 | Two installments (June/September) |
| €500,000 | €1,500 | Three installments (June/September/December) |
| €1,000,000 | €3,000 | Three installments (June/September/December) |
| Under €100 tax | Variable | Single payment by June 30 |
| €100-€500 tax | Variable | Two installments (June/September) |
| Over €500 tax | Variable | Three installments or full payment in June |
How is property tax in Lisbon actually calculated?
Property tax in Lisbon uses a simple formula based on your property's official fiscal value called VPT (Valor Patrimonial Tributário).
The calculation is: IMI = VPT × IMI rate (0.3% in Lisbon for 2025). The VPT is determined by Portuguese tax authorities using a government formula that considers your property's area, location, age, construction type, condition, and a base value per square meter set at €665 for 2025.
This base value hasn't changed since 2023, meaning your fiscal value remains stable unless you renovate, build new, or specifically request a reassessment. The calculation differs from market value - your VPT is typically lower than what you'd pay to buy the property today.
Local factors like neighborhood quality, proximity to transport, and building amenities influence the final VPT through location coefficients applied to the base calculation.
What is the official property tax rate (IMI) in Lisbon right now?
As of September 2025, Lisbon's official IMI rate is 0.3% for urban properties.
This rate is set annually by Lisbon's municipal council and applies to all residential properties within the city limits. The rate has remained competitive compared to other Portuguese municipalities, where rates can reach up to 0.45% for urban properties.
Rural properties in Portugal face a fixed national rate of 0.8%, but this doesn't apply to most Lisbon residential investments since the city is predominantly urban. The 0.3% rate makes Lisbon property ownership relatively affordable compared to many European capitals.
This municipal rate applies uniformly across all Lisbon neighborhoods, from premium areas like Chiado to emerging districts like Marvila.
Does the tax rate change depending on whether the property is new, old, or recently renovated?
The IMI rate stays at 0.3% regardless of your property's age or renovation status.
However, new construction or major renovations trigger a VPT reassessment, which can increase your fiscal value and therefore your annual tax bill. A newly built apartment will have its VPT calculated using current construction standards and the 2025 base value of €665 per square meter.
Recently renovated properties may see their VPT increase if improvements significantly upgrade the property's condition or add square footage. The tax authorities assess renovations that require building permits or substantially change the property's characteristics.
Vacant or abandoned buildings may face higher IMI rates as a penalty, encouraging property maintenance and occupancy. This doesn't affect normal residential properties in good condition.
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How does the property's fiscal value get assessed and how often is it updated?
Your property's fiscal value (VPT) gets assessed using a standardized government formula, not through individual property inspections.
The assessment considers six main factors: total area, location coefficients, property age, construction type and quality, current condition, and the base value per square meter (€665 for 2025). Location coefficients vary by neighborhood within Lisbon, reflecting local market dynamics and infrastructure quality.
VPT updates only occur in specific situations: new construction completion, major renovations requiring permits, property subdivision or merger, or owner-requested reassessment. There's no automatic annual update system, so your fiscal value typically remains stable for years.
If you believe your VPT is incorrect, you can request a reassessment through the tax authorities, though this might result in either an increase or decrease. Most property owners find their VPT stays below current market values.
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What are the minimum and maximum IMI rates applied specifically in Lisbon?
In Lisbon, both the minimum and maximum IMI rates are set at 0.3% for urban properties in 2025.
Unlike some municipalities that apply variable rates based on property value or type, Lisbon uses a flat rate system. This means whether you own a €150,000 apartment in Benfica or a €2 million penthouse in Príncipe Real, you pay the same 0.3% rate on your respective fiscal values.
The Portuguese legal framework allows municipalities to set IMI rates between 0.3% and 0.45% for urban properties, giving Lisbon room to increase rates if needed. However, the city has maintained the minimum allowed rate to encourage property investment and ownership.
This flat rate approach simplifies tax planning for property investors since you can easily calculate annual costs without worrying about rate brackets or property value thresholds.
Are there exemptions or reductions available for first-time buyers or permanent residents?
Yes, specific exemptions exist for main residence properties under certain value and income conditions.
The primary exemption applies to main residences with a VPT up to €125,000 and total household income not exceeding €153,300 annually. This exemption lasts three years and can extend up to five years, completely eliminating your IMI payments during this period.
First-time buyers under 35 may qualify for additional tax exemptions, though these primarily target IMT (purchase tax) and stamp duty rather than ongoing IMI payments. Permanent residents don't automatically receive IMI exemptions based solely on residency status.
To qualify for the main residence exemption, the property must be your primary home where you're officially registered for tax purposes. Investment properties or second homes don't qualify for these reductions regardless of owner age or residency status.
Do foreign buyers pay the same property taxes as locals in Lisbon?
Foreign buyers pay identical property taxes to Portuguese nationals, with no nationality-based surcharges or penalties.
The 0.3% IMI rate applies equally to all property owners in Lisbon regardless of citizenship, residency status, or country of origin. This tax equality extends to all property-related taxes including AIMI and payment schedules.
Foreign owners have the same rights to exemptions and reductions as locals, provided they meet the same criteria such as main residence requirements or income thresholds. Non-resident foreigners can still benefit from exemptions if their Portuguese property serves as their primary residence.
Portugal's tax system treats property ownership neutrally regarding nationality, making it attractive for international investors compared to countries that impose foreign buyer taxes or higher rates for non-residents.
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What is the annual cost of property tax on a €200,000 apartment in Lisbon?
A €200,000 apartment in Lisbon typically generates an annual IMI bill of approximately €600.
This calculation assumes the property's fiscal value (VPT) equals the purchase price, though VPT is often lower than market value. If your apartment's VPT is assessed at €180,000, your annual IMI would be €540 (€180,000 × 0.3%).
For a €200,000 property, you'll pay this tax in two installments: the first by June 30 (€300) and the second by September 1 (€300). Alternatively, you can pay the full €600 by June 30 for convenience.
This represents roughly 0.3% of your property's value annually, making it one of the more affordable property tax burdens in Western Europe. The predictable rate helps with budgeting for property ownership costs.
How much would property tax be on a €500,000 or €1 million property in Lisbon?
A €500,000 property generates approximately €1,500 in annual IMI, while a €1 million property costs about €3,000 per year.
For the €500,000 property, you'd pay in three installments: €500 by June 30, €500 by September 1, and €500 by December 2. The €1 million property follows the same three-installment schedule with €1,000 payments each.
These calculations assume fiscal values match purchase prices, though luxury properties often have VPT assessments below market value. A €1 million apartment might have a VPT of €850,000, reducing annual IMI to €2,550.
Higher-value properties may also trigger AIMI (additional property tax) if your total property portfolio exceeds €600,000 in fiscal value, excluding your main residence. This adds 0.7% to 1.5% depending on total portfolio value.
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Are there additional property-related taxes in Lisbon beyond IMI, like AIMI or stamp duty?
Yes, several additional taxes apply to Lisbon property ownership beyond the basic IMI.
AIMI (Adicional ao IMI) affects individuals with property portfolios exceeding €600,000 total fiscal value, excluding your main residence. Rates start at 0.7% for portfolios between €600,000-€1 million and increase progressively. A property investor with €800,000 in rental properties would pay 0.7% AIMI on the excess €200,000.
IMT (Municipal Property Transfer Tax) is a one-time purchase tax with progressive rates from 0% to 6.5% depending on property value. Stamp duty adds 0.8% of the purchase price, typically paid at acquisition alongside IMT.
Annual taxes include only IMI and potentially AIMI for larger portfolios. IMT and stamp duty are one-time costs at purchase, not recurring annual expenses. Property owners may also face capital gains tax when selling, though main residence sales often qualify for exemptions.
When and how do property owners in Lisbon actually pay these taxes each year?
IMI payment schedules depend on your total annual tax amount, with multiple installment options available.
| Annual IMI Amount | Payment Schedule | Due Dates |
|---|---|---|
| Under €100 | Single payment | By June 30 |
| €100 - €500 | Two installments | June 30 & September 1 |
| Over €500 | Three installments | June 30, September 1 & December 2 |
| Any amount | Full early payment | By June 30 (optional) |
| AIMI (if applicable) | Single payment | By September 15 |
Payment methods include online through the Portuguese tax authority website (Portal das Finanças), ATM machines (Multibanco), post offices, or authorized banks. Online payment is most convenient for foreign owners, requiring only your tax number (NIF) and property details.
You'll receive annual tax notices (cadernetas) with exact amounts and payment codes. Many property owners set up automatic payments to avoid late fees, especially useful for non-resident investors.
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What happens if someone doesn't pay their property tax on time in Lisbon?
Late IMI payments trigger immediate interest charges and potential enforcement action against your property.
Interest accrues daily on unpaid amounts at rates set annually by the Portuguese tax authority, typically around 4-7% annually. A €1,000 late payment accumulates roughly €1-2 daily in additional charges, making prompt payment financially important.
Extended non-payment leads to formal collection procedures including asset seizure, property liens, or forced sale to recover tax debts. The tax authority can register charges against your property title, preventing future sales until debts are cleared.
For non-resident owners, unpaid taxes can complicate visa renewals, residency applications, or future property transactions in Portugal. Setting up automatic payments or annual reminders prevents these complications and maintains good standing with Portuguese tax authorities.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Lisbon's property tax system offers predictable, relatively low annual costs for property owners.
The 0.3% IMI rate, equal treatment of foreign buyers, and flexible payment schedules make property ownership accessible for both residents and international investors.