IMT exemption for owner-occupied housing raised to 97,064 euros

The State Budget for 2023 (OE2023) updated the brackets of the Municipal Transfer Tax (IMT) by 4%, increasing the exempt amount of this tax for houses for own and permanent residence to 97,064 euros.

IMT is levied on the purchase and sale of property, regardless of whether it is new or used, and is also due when there is an exchange of property, granting of usufruct or assignment of the contractual position of the purchaser.

The tax rates differ according to whether the property is for one's own permanent residence or for other purposes, with the IMT rules providing that the tax is calculated on the amount of the transaction or the taxable patrimonial value (VPT) of the property, whichever is greater.

With the update provided for in the State Budget for 2023, the exempt amount for the purchase of homes for residential purposes has increased from 93,331 euros to 97,064 euros.

As for houses for purposes other than housing, this becomes the value on which a 1% tax is levied.

From this threshold, marginal rates apply, with the update via the State Budget 'pushing' the limits of the following brackets up to 132,774 euros, up to 181,034 euros, up to 301,688 euros and up to 578,598 euros.

Above these amounts and up to 1,050,400 euros, a single rate of 6% is applied and for properties worth more than 1,050,400 euros, the single rate applicable is 7.5%, whereas in 2022 this limit was set at 1,010,000 euros.

There is no exemption or reduction whenever the purchaser is resident for tax purposes in a country, territory or region subject to a more favourable tax regime (included on the list of offshore companies in force in Portugal), or is an entity controlled, directly or indirectly, by an entity resident for tax purposes in a country, territory or region subject to a more favourable tax regime.

IMT is collected by the Autoridade Tributária e Aduaneira (AT) but, like IMI, is a revenue of the municipalities.