In response to the need for young people to start their life project with the purchase of their permanent home, the government has approved legislation that exempts them from IMT and stamp duty on the first purchase of a property for their own permanent home. The preamble to the law recognises the difficulties young people have in accumulating sufficient savings or having a stable professional situation to enable them to have funds available to pay the down payment for the purchase of a home and the savings needed to pay the taxes due on the purchase of that property.
At the same time as the exemption now granted to young people, under the terms of Decree-Law 48-A/2024 of 25 July, there was a need to create a mechanism to compensate municipalities that would otherwise be affected by the loss of tax revenue.
The exemption is recognised for young people aged 35 or under on the date of the transfer and who are not considered dependents in that year for the purposes of article 13 of the IRS Code. The exemption lapses if the taxable person is considered a dependent again within six years of buying the house or if, within the same period, the property is used for something other than that on which the benefit was based.
In any case, it is also necessary that the young person does not hold a property right or a part of that right (such as usufruct or surface rights) over an urban residential property on the date of the transfer or in the previous three years.
In addition, the exemption only covers acquisition values of up to €316,772.00.
In cases where the property is acquired jointly by the spouses, so that it becomes a joint asset of the couple, the fulfilment of the legal conditions for recognising the exemption from these two taxes is verified individually. As such, if one of the spouses does not fulfil the conditions for exemption, they will still be liable for IMT and stamp duty and the taxes will have to be paid in respect of one of the spouses.
Finally, it should be noted that the exemption created takes effect from 1 August 2024.
