Authored by the expert who managed and guided the team behind the Portugal Property Pack
Yes, the analysis of Lisbon's property market is included in our pack
If you're considering investing in property in Lisbon, understanding the associated taxes and fees is crucial to making an informed decision.
What are the costs involved? How do they compare to other cities? Are there any hidden fees you should be aware of?
In this article, we'll break down everything you need to know about property taxes and fees in Lisbon.
Actually, we know this market inside and out. We keep tabs on it regularly, and all our discoveries are reflected in the most recent version of the Portugal Property Pack
Property Taxes and Fees in Lisbon
In Lisbon, property owners are subject to various taxes and fees. Below is a detailed table outlining the main property-related taxes and fees, along with their descriptions and applicable rates.
| Tax/Fee | Description | Rate/Amount |
|---|---|---|
| IMI (Imposto Municipal sobre Imóveis) | Annual property tax based on the property's tax value (VPT). | 0.3% to 0.45% |
| IMT (Imposto Municipal sobre as Transmissões Onerosas de Imóveis) | Tax on the transfer of property ownership, paid by the buyer. | Up to 6% |
| Stamp Duty | Tax on various legal documents, including property transactions. | 0.8% of property value |
| Additional to IMI (AIMI) | Additional tax for properties with a high combined tax value. | 0.7% to 1.5% |
| Notary Fees | Fees for the notary services during property transactions. | Variable, typically a few hundred euros |
| Registration Fees | Fees for registering the property with the land registry. | Variable, typically around €250 |
| Legal Fees | Fees for legal services during the property purchase process. | 1% to 2% of property value |
| Condominium Fees | Monthly fees for maintenance and services in shared buildings. | Variable, depending on the property |
| Energy Certification Fee | Fee for obtaining an energy performance certificate for the property. | €150 to €500 |
| Municipal Waste Fee | Annual fee for waste collection services. | Variable, based on property size |
| Water and Sewage Fees | Monthly fees for water supply and sewage services. | Variable, based on usage |
| Insurance Premiums | Annual premiums for property insurance. | Variable, based on coverage |
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What You Need to Know Before Buying Property in Lisbon
What is the IMI tax rate in Lisbon?
The IMI (Imposto Municipal sobre Imóveis) tax rate in Lisbon typically ranges from 0.3% to 0.45% of the property's taxable value.
This rate is determined by the local municipality and can vary depending on the property's location and characteristics.
It's important to verify the exact rate applicable to your property with the local tax office.
How is the taxable value of a property determined for IMI purposes?
The taxable value, known as Valor Patrimonial Tributário (VPT), is calculated based on factors such as the property's size, age, and location.
The VPT is assessed by the Portuguese Tax Authority and is usually lower than the market value of the property.
Understanding the VPT is crucial as it directly impacts the amount of IMI you will pay annually.
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Are there any exemptions or reductions available for IMI?
Yes, certain properties may qualify for IMI exemptions or reductions, such as those used for permanent residence or properties classified as historical heritage.
Newly constructed properties may also benefit from a temporary exemption for a period of up to three years.
It's advisable to consult with a tax advisor to explore potential exemptions applicable to your property.
What is the AIMI tax and who is subject to it?
The AIMI (Adicional ao IMI) is an additional property tax levied on high-value properties in Portugal.
It applies to individuals owning properties with a combined VPT exceeding €600,000 and companies owning properties with a combined VPT exceeding €1,000,000.
The AIMI rate varies from 0.7% to 1.5% depending on the total VPT and ownership structure.
What are the costs associated with property registration in Lisbon?
Property registration costs in Lisbon typically include notary fees, registration fees, and stamp duty.
The stamp duty is calculated at a rate of 0.8% of the property's purchase price.
Notary and registration fees can vary, so it's important to obtain a detailed estimate from your legal advisor.
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Are there any ongoing fees for property owners in Lisbon?
In addition to IMI, property owners in Lisbon may incur condominium fees if the property is part of a shared building or complex.
These fees cover maintenance and communal services and can range from €50 to €200 per month depending on the amenities offered.
It's essential to factor these costs into your budget when purchasing a property.
How does the property transfer tax (IMT) work in Lisbon?
The IMT (Imposto Municipal sobre Transmissões) is a one-time tax paid upon the transfer of property ownership.
The rate varies based on the property's value and purpose, with residential properties subject to rates between 1% and 8%.
First-time buyers may benefit from reduced rates or exemptions under certain conditions.
What is the process for appealing a property tax assessment in Lisbon?
If you believe your property's VPT is incorrectly assessed, you can file an appeal with the Portuguese Tax Authority.
The appeal process involves submitting evidence and documentation to support your claim for a reassessment.
It's advisable to seek professional assistance to navigate the appeal process effectively.
How does the tax system accommodate non-resident property owners?
Non-resident property owners in Lisbon are subject to the same property taxes as residents, including IMI and AIMI.
However, they may face different tax implications on rental income and capital gains, depending on their country of residence.
Consulting with a tax advisor familiar with international tax treaties is recommended for non-residents.
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What are the implications of owning a property in a historical area of Lisbon?
Properties in historical areas may be subject to specific regulations and preservation requirements, impacting renovation and development plans.
These properties might also qualify for tax incentives or reduced IMI rates due to their cultural significance.
Understanding the local regulations and potential benefits is crucial when purchasing in these areas.
How does the Portuguese Golden Visa program affect property taxes?
The Golden Visa program allows non-EU citizens to obtain residency by investing in Portuguese real estate, but it does not alter property tax obligations.
Participants in the program are still required to pay standard property taxes such as IMI and AIMI.
However, the program offers other benefits, such as the ability to live and work in Portugal and travel within the Schengen Area.
What are the potential tax benefits of renting out a property in Lisbon?
Rental income from properties in Lisbon is subject to a flat tax rate of 28% for non-residents, but residents can opt for progressive rates.
Expenses related to property maintenance and management can be deducted from rental income, potentially reducing taxable income.
It's important to maintain accurate records and consult with a tax professional to maximize potential deductions.