The cost of buying property in Portugal: taxes & fees explained

The upfront costs at a glance

When you buy a home in mainland Portugal, budget for four main one-off costs on top of the price:

• IMT — property transfer tax, the biggest single cost, charged on a sliding scale.
• Stamp duty (Imposto do Selo) — a flat 0.8% of the price.
• Notary & land registration — typically around €1,000 to formalise and register the deed.
• Legal fees — a conveyancing lawyer usually charges around 1–1.5% of the price, plus 23% VAT.

IMT: the transfer tax

IMT (Imposto Municipal sobre as Transmissões) is the tax you pay to transfer ownership, and it's the cost that varies most. It's charged on a marginal sliding scale: lower portions of the price are taxed at lower rates, higher portions at higher rates, up to a maximum marginal rate of 8%.

The rate also depends on use. A property that will be your permanent main residence gets a more generous lower band (the first slice can be tax-free), while a second home or holiday property pays from the first euro. Above roughly €645,000 the marginal scale gives way to a flat 6%, and above about €1.12m a flat 7.5% applies to the whole price.

Because the bands are marginal, IMT on a modest home is a few percent, but it climbs steadily on higher-value property — which is why the transfer tax dominates the budget at the top end.

Stamp duty, notary and legal fees

Stamp duty (Imposto do Selo) is straightforward: 0.8% of the purchase price, paid at completion.

The notary and land registry formalise and record the deed — usually around €1,000 in total, though it varies. Most foreign buyers also use an independent lawyer to run due diligence, check the title and the property register, and handle completion; budget roughly 1–1.5% plus VAT. It's money well spent on a cross-border purchase.

A worked example

Take a €350,000 apartment bought as a second home. IMT on the second-home scale comes to roughly €17,000–18,000; stamp duty at 0.8% is €2,800; notary and registration around €1,000; legal fees at ~1.25% plus VAT around €5,400.

That's roughly €26,000–27,000 in costs — about 7.5% on top of the price. The same property as your main residence would cost a little less, because the primary-residence IMT bands are lower. Run the exact numbers on any listing's buying-cost calculator.

Costs you keep paying once you own

Ownership brings a few recurring costs worth planning for:

• IMI — the annual municipal property tax, typically 0.3%–0.45% of the property's rateable (tax) value for urban homes, set by each council.
• AIMI — an additional annual tax that only applies to higher-value property portfolios (above a per-owner threshold), so most single-home buyers won't pay it.
• Condominium fees — if you buy an apartment or a property on a managed development, monthly charges cover shared maintenance, pools and gardens.
• Utilities, insurance and, if you let the property, income tax on rental earnings.

If you're using a mortgage

Borrowing adds its own costs: a bank arrangement/valuation fee, plus a small additional stamp duty on the loan itself. Non-residents can typically borrow up to around 70% of the value, so you'll need a larger deposit than a resident would. Factor financing costs in early if a mortgage is part of your plan.