Exemption from IMT and Stamp duty for first time buyers

On June 12th 2024 the Portuguese government approved a bill that creates an exemption for first time buyers under the age of 35 from Municipal Property Transfer Tax (IMT) and Stamp Duty (Imposto do Selo) when purchasing their first permanent home in Portugal.

The aim of this is to add a financial incentive for first time buyers by reducing the taxes in relation to the purchase of their first property for permanent habitation.

The exemption for IMT is not automatically applied, there are certain conditions that have to be met in order for a first time buyer to receive the exemption, as follows:

• Purchase of a standalone villa, or other property within a condominium (e.g. townhouse or apartment) which is for a permanent residence
• The maximum purchase price to receive the full exemption is €316,772. This figure is defined by the tax table for IMT, and it is the 4th scale.
• If the purchase price is between €316.772 and €633.453 then a partial exemption of the taxes will be given
• There is no exemption for purchases with a value higher than €633.453
• It must be the first purchase of a property as a permanent residence
• The purchaser must be under 35 years of age on the date of purchase
• In the year that the purchase is completed, the purchaser must not be registered as “dependent” (i.e. not dependent on his or her parents for financial support)
• The purchaser must not have had any properties in the three years prior to the purchase

The exemption will be cancelled if:

• The property purchased is not used as their permanent residence within 6 months of the purchase
• The property purchased does not remain as their permanent residence for 6 years from the date of  the purchase

The new rules are due to enter into force on the 1st August 2024.