As we enter 2025, a number of important changes are taking place in the housing sector in Portugal. Among the highlights of benefits in the housing sector, we find the maintenance of some important tax benefits, the end of certain exemptions and the return of penalties in measures that have been in force in recent years.
This article explores what to expect in the new year and how these changes could impact Portuguese financial and housing planning.
Benefits in the housing sector that will continue in 2025
- Exemption from IMT and Stamp Duty for Young People: Young people up to the age of 35 who purchase their first permanent home are still exempt from IMT and Stamp Duty for properties up to 316,000 euros. For properties with a higher value, but less than 633,000 euros, the exemption only applies to the amount up to 316,000 euros, with the rest being subject to IMT.
- Exemption from Commissions on Early Repayment of Mortgage Loans: Holders of variable rate mortgage loans have one more year to repay their loans early without penalty.
- Public Guarantee for Housing Loans for Young People: The state guarantee in the form of a surety, which covers up to 15% of the loan amount for permanent housing for properties up to 450,000 euros, will remain in force until 2025.
Benefits in the housing sector that ended in 2024
- End of the Capital Gains Tax Exemption: As of December 31, 2024, the capital gains exemption for the sale of properties whose value was used to repay mortgage loans ended. Transactions made from 2025 onwards no longer benefit from this regime.
- End of the Exemption on the Redemption of PPRs for Mortgage Loans: The measure that allowed PPRs to be redeemed without penalty to pay off mortgage loans has not been renewed. Now, redemptions made before five years require the return of tax benefits and are subject to 21.5% tax. Redemptions after eight years benefit from a reduced rate of 8.6%.
Impact on your estate planning
The changes for 2025 highlight the importance of keeping an eye on the legislation to make the most of the benefits in the housing sector and avoid unnecessary tax penalties. Measures such as the continuation of the IMT exemption for young people or the public guarantee could represent a significant opportunity for those planning to buy a home this year.
Staying informed about policies and benefits in the housing sector is essential for effective financial management and for making the most of the opportunities that may arise.
If you have any questions or need support on how these changes might impact your specific situation, get in touch with our team. We’re ready to help you optimize your financial decisions.
