How are capital gains on property taxed in Portugal?

Capital gains on property sales are taxed on 50% of the net gain (after eligible expenses and monetary devaluation coefficient). For primary residence (HPP), full exemption applies when reinvesting in another primary residence. Residents over 65 may be exempt when reinvesting in lifetime annuities or PPR pension plans.

What are the taxes when buying property in Portugal?

When buying property in Portugal you pay: IMT (0% to 8% on a sliding scale), Stamp Duty (0.8% of purchase price), land registry and notary fees (~1% of value). First-time buyers of primary residence are exempt from IMT up to €101,917 (2026).

What is AIMI (Additional IMI) in Portugal?

AIMI is an annual wealth tax on the total taxable property value (VPT) of real estate holdings. Individuals: exempt up to €600,000, 0.7% between €600K-€1M, 1% above. Companies: 0.4% on total VPT with no exemption. Applicable annually on 1 April.

Does HVR support foreign investors in Portuguese real estate?

Yes. HVR supports foreign investors acquiring and managing property in Portugal: tax-efficient acquisition structuring, NHR/IFICI regime for non-residents, rental income and capital gains taxation, Portuguese tax return filing, and setting up property holding companies when appropriate.

Accounting for Real Estate in Portugal | HVR Business Consulting

Accounting for Real Estate

Portugal's real estate sector offers compelling opportunities for investors — but it also comes with a layered tax environment that requires specialist knowledge. HVR provides dedicated accounting and tax advisory for real estate investors, developers, property management companies and Alojamento Local operators in Portugal. We handle the full financial lifecycle: from acquisition structuring to rental income reporting, capital gains optimisation and annual property wealth tax planning.

Rental Income — IRS Category F

Individual property owners who rent out residential or commercial premises declare that income under IRS Category F. Net rental income is taxed at a flat 28% rate (or you may elect to aggregate it with your other income if that results in a lower overall tax burden). Deductible expenses include maintenance and repair costs, property insurance, IMI (annual property tax), interest on acquisition loans and management fees. HVR prepares your annual IRS return and ensures all eligible deductions are correctly applied — including the reduced 25% rate available for long-term rentals (minimum 3-year lease agreements).

Capital Gains on Property Sales

When you sell a property in Portugal, the taxable gain is calculated on 50% of the net gain (after deducting acquisition costs, improvement expenses and applying the annual monetary devaluation coefficient). For primary residence (Habitação Própria e Permanente), full exemption applies when you reinvest the proceeds in another primary residence within a set period. Residents over 65 may benefit from exemption when reinvesting in life annuities or PPR pension savings plans. HVR calculates your capital gains position and identifies every available exemption or deduction before your sale closes.

IMT, Stamp Duty and Acquisition Costs

Buying property in Portugal triggers several one-time taxes. IMT (Municipal Property Transfer Tax) applies on a sliding scale from 0% to 8% depending on property value, type and use. Stamp Duty (Imposto de Selo) is charged at 0.8% of the purchase price. First-time buyers of a primary residence benefit from IMT exemption up to €101,917 (2026 threshold). We model the full acquisition tax cost before you commit, and ensure purchase declarations are correctly filed.

AIMI — Annual Property Wealth Tax

AIMI (Additional IMI) is an annual wealth surcharge on the aggregate taxable value (VPT) of Portuguese real estate holdings assessed on 1 January each year. Individuals are exempt on the first €600,000 of VPT; the rate is 0.7% between €600K and €1M, and 1% above. Companies holding property pay a flat 0.4% on the total VPT with no exemption threshold. HVR reviews your portfolio annually to identify restructuring opportunities that reduce AIMI exposure legally and efficiently.

VAT on Construction (6% Reduced Rate from 2026)

From 2026, the Portuguese government extended the reduced 6% VAT rate to residential construction and renovation works, replacing the previous 23% standard rate for qualifying projects. Property developers and individual owners undertaking renovation benefit significantly from this change. HVR advises on which works qualify, how to structure contracts to access the reduced rate, and handles the VAT reclaim process for companies registered for VAT with construction activity. For property developers who sell housing units, the margin scheme may offer an alternative to standard VAT accounting on used properties acquired without VAT recovery.

Alojamento Local (Short-Term Rental) Accounting

Operating an Alojamento Local (AL) property — whether via Airbnb, Booking.com or direct booking — creates specific accounting and tax obligations: RNAL registration, 6% VAT on accommodation revenue, certified invoicing software with ATCUD codes, monthly SAF-T submission to the Tax Authority, and income taxation under IRS Category B (sole traders) or IRC (companies). HVR manages the full compliance burden for AL operators, from software setup to monthly filings and annual tax returns.

Support for Foreign Investors

Non-resident investors acquiring property in Portugal are required to appoint a fiscal representative for dealings with the Portuguese Tax Authority. HVR provides this service directly, ensuring your NIF is active, correspondence is monitored and all tax obligations are met on time. We also advise on the most tax-efficient acquisition structures — personal ownership versus a Portuguese or foreign holding company — taking into account your residence status, planned hold period and exit strategy. If you are relocating to Portugal, we can assess your eligibility for the IFICI/NHR tax regime.

Learn more: Fiscal Representative in Portugal | Get a NIF in Portugal