Why Portugal?
Portugal has a robust economy and the most thriving real estate market in recent times in Europe.
For those looking to diversify their investment portfolio this sunny nation, enjoying more than 300 days of sunshine annually, is not only attractive for tourism (22M/2022), but also increases property value and rental demand.
Whether you are an individual investor or a company, Portugal presents an opportunity to invest in a country where economic growth and quality of life go hand in hand.
Invest with security in Portugal with WTRG – Where you can see your finances grow and have a safe haven waiting for you in the future.
Advantageous taxes!
The Non-Habitual Resident (hereinafter «NHR») is an advantageous tax regime applicable to the income covered by the Portuguese personal income tax («Imposto sobre o Rendimento das Pessoas Singulares – IRS»).
The NHR is applicable to individuals who have not been a tax resident in Portugal in the previous 5 years and fulfil the conditions to be considered a tax resident in Portugal in the year the request for registration as NHR is submitted.
The greatest advantage of this tax regime is the exemption from taxation of income obtained abroad, if some conditions are met, which may lead to situations of double non-taxation.
The NHR has the right to be taxed according to the rules of the tax regime during a period of 10 consecutive years.
Taxes on the acquisition and ownership
Both individuals and companies pay taxes in the act of purchasing real estate in Portugal:
Imposto Municipal sobre Transmissões Onerosas de Imóveis – IMT
The tax rate is up to 7,5%, depending on the purchase price and location of the property (just one time)
Imposto Selo – IS
The tax rate is of 0,8% applicable on the purchase price (just one time)
Over the ownership of real estate is due «Imposto Municipal sobre Imóveis – IMI», which must be paid by individuals and companies who own property located in Portugal, regardless of its classification as urban or rural (all the years).
On urban property, the tax rate varies between 0,3% and 0,45%, depending on the municipality, and it is calculated on the basis of the tax registration value («Valor Patrimonial Tributário – VPT»).
IMT and IMI exemptions
Acquisition of properties by real estate trading companies for resale
A company that usually and habitually carries out the activity of acquisition of real estate for resale (i.e. in each of the 2 previous years it has resold real estate acquired with that purpose), upon recognition by the Portuguese Tax Authorities, is exempt from paying IMT.
This exemption only stands if the property is resold within 3 years from the date of purchase. Otherwise, this tax must be paid on the end of the 3-year period.
Also, if the property is included in the inventory of the real estate trading company, the IMI is not due for the first 3 years.
Acquisition of properties that have been subject to urban rehabilitation
If a company or an individual acquires property firstly built more than 30 years ago or located within the Urban Rehabilitation Area defined by the municipality and undertakes construction rehabilitation works that results in a higher conservation level and the energy efficiency and thermal quality requirements for buildings are met, the new owner can apply to the following tax benefits:
IMT exemption
provided that the new owner starts the construction works within 3 years from the date of acquisition;
IMI exemption
for the first 3 years starting from the year, inclusive, of the conclusion of the construction works (which may be renewed for 5 additional years upon request to the Portuguese Tax Authorities if the property is for the owner’s or the tenant’s primary habitation).
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