The Municipal Property Tax (IMI) is an annual tax levied on property owners in Portugal. The amount payable is determined on the basis of the property’s Tax Asset Value (VPT), established by the Tax Authority, and not the market value.
Who Should Pay?
All owners of real estate, including houses, garages and land, are liable to pay IMI, unless they fall within legally established exemption situations.
Calculating IMI
The amount of the tax depends on the application of a rate to the property’s VPT. The rates vary between 0.3% and 0.45% for urban properties and 0.8% for rural properties, and are defined by each municipality within these ranges.
Deadlines and Payment Methods
IMI is paid annually and can be paid at different times, depending on the amount due. Thus, for taxes up to €100 per year, the single payment is made in May; for taxes between €101 and €500, it is paid in two installments, the first in May and the other in November. For taxes with an annual value of more than €500, payment is made in three installments: in May, August and November.
Exemptions and reductions
Certain situations allow for the exemption or reduction of IMI:
- Automatic Exemption: Households with a gross annual income of up to €16,398.17 and who own properties with a VPT of up to €71,296.40 (figures for the 2024 IMI) are automatically exempt. In 2026, the limits will be updated to €16,824.50 income and €73,150.00 VPT.
- Temporary Exemption: Owners who purchase their own permanent home with a VPT of up to €125,000, and whose gross annual household income does not exceed €153,300, can benefit from an exemption for the first three years after purchase. This period can be extended to five years, depending on the decision of the municipality.
- Other exemptions: Rehabilitated properties and rental contracts prior to 1990 may also benefit from an exemption, upon specific request.
Properties bought, built or rehabilitated for placement in the Rental Support Program (PAA) are also exempt from IMI, in this case provided that the properties are rented within six months of acquisition, construction or rehabilitation. The exemption lasts for three years and is renewable for a further five years.
To check your eligibility for these or other exemptions and to clarify any questions in this area, please contact us.