Once you’ve decided where you want to buy property in Portugal and how much you can expect to pay based on average house prices there, you’ll also want to know about the price of upkeep and maintenance. It’s important to know what other expenses you’ll have to pay on your new Portuguese home after the initial purchase is made (apart from the obvious ones like water, gas and electricity bills).
- IMI Municipal Property Tax (Imposto Municipal sobre Imóveis): This is a tax on homeowners in Portugal, but you don’t have to pay if it’s your main residence or if you rent it out on a long-term or permanent basis of at least 10 years. If you have to pay, you’ll receive a letter from the tax authority between January and April, as the tax is to be paid in two parts in in April and September. If you don’t get anything, you may want to ask the tax office. It is calculated based on the value of the property, taking into account the market value, the location and the type of property. There are three categories:
- Urban buildings (prédios urbanos): 0.7% - 1.3% of the fiscal value for town- or city-based homes.
- Country buildings (prédios rusticos): 0.8% of the fiscal value for buildings in agricultural use or unbuilt land in the outskirts of cities.
- Mixed buildings (prédios mistos): When used as a mixture of both these uses, it’s tax category falls in the middle.
- Home insurance: Just as with any other house, it’s a good idea to have home and contents insurance on your Portuguese property. In Portugal, the standard rate charged by insurance providers is from 180 to 380 euro a year, but that obviously varies with property type, location and value.
- Home administrator: If all this red tape seems like too much work for you, especially in Portuguese, another option is to just hire a property manager to do the paperwork and organise the payments for you. These kind of services cost about 100 to 150 euro per year, and allow you to sit back and relax in your home in the sun and not worry about the running costs!