The Municipal Property Transfer Tax (Imposto Municipal sobre a Transmissão Onerosa de Imóveis or IMT) is a tax on onerous transfers of properties in Portuguese territory. It is calculated by central tax services based on information presented in the tax declaration, either in person at a local tax office or online and should be worked out before the transaction takes place.
When talking about IMT, it’s important to know the passive subject of the tax, which is the person who acquires the use of the capital, normally the buyer or renter, and is the person who must pay the tax. Another important term is the taxable base; this is the value of the transferred capital, which is used to calculate how much tax is due.
Buying a second-hand property
Payment of the IMT is the responsibility of the passive subject and is applied to the sale price or the cadastral value of the property, whichever is larger. The cadastral value is worked out using the Municipal Tax Code for Properties.
A percentage is applied to this value to give the IMT, which varies depending on the type of property, what it’s used for and how much it costs. For example, a rate of 5% is applied to rural properties and a rate of between 2% and 8% for urban properties used as a main residence. Properties with a taxable base of less than 92.407 euro don’t pay any IMT.
Other things to bear in mind
The IMT must be paid in the moment it is calculated or the next day at the very latest and is valid for 2 years. When the transfer is formalised with an agreement or contract outside of Portuguese territory, the IMT must be paid within the following month. For rentals, IMT is only applicable for contracts with a length of over 30 years.
There are certain cases in which you can be exempt from paying IMT, such as the acquisition of urban properties which will be renovated within a maximum of 2 years or properties of municipal interest.