Portugal charges non-residents 7.5% IMT: who pays, who gets the difference back and what the 2027 budget has to do with it

My conclusion is short. The 7.5% rate is not a tax on foreigners; it is the price of buying a home without moving in. Those who really relocate, or let the flat long-term at a moderate rent, get the difference back. But they pay it out of their own pocket first, and the money comes back only on a timely application.

In brief

• The 7.5% rate for non-residents is law in force, not a proposal. It was introduced by Decree-Law 97/2026 of 20 May 2026 as a new paragraph 10 of Article 17 of the IMT Code.
• It applies to buying urban housing: a flat or house intended exclusively for living in. No reliefs or exemptions apply to such a purchase.
• A non-resident is a person without Portuguese tax residence under Article 16 of the Personal Income Tax Code. Citizenship and residence permits are irrelevant.
• There are three exceptions: the buyer was a Portuguese tax resident before, becomes one within two years of the purchase, or lets the home long-term at a moderate rent.
• The 2027 draft budget does not change the 7.5% rate. It only raises the thresholds of the ordinary IMT scale by 2.3% from 1 January 2027, if parliament adopts it.

This is already law; the 2027 budget has nothing to do with it

The confusion is understandable. This autumn the press is writing about the 7.5% rate again, and the word budget sits next to it. In fact the rule has applied since spring. The government was authorised by Law 9-A/2026 of 6 March 2026, approved the decree in the Council of Ministers on 27 March, and the President signed it on 12 May. Decree-Law 97/2026 was published in the official gazette on 20 May 2026. The decree sets no separate date for the IMT rules, so they apply under the general rule from the fifth day after publication, that is, from 25 May 2026.

The Portuguese Tax Authority treats the rule as in force. Its portal already shows Article 17 of the IMT Code in the new wording, and on 4 September 2026 it issued guidance to tax offices on applying the exceptions to spouses and co-owners. A technical correction to the decree was published on 13 July 2026.

The government approved the 2027 draft budget on 8 October 2026 and tabled it in parliament. It contains an IMT article, but it only concerns the scale for residents: the thresholds rise by 2.3%. The top 7.5% rate for expensive homes will start at EUR 1,177,323 instead of EUR 1,150,853 today. The draft leaves the non-resident paragraph untouched.

What this means for you. If your deal is set for November or December, there is no point waiting for the budget. For a non-resident the rate stays at 7.5% in 2027 too. For a resident the new thresholds will save a few hundred euros at most.

The overpayment stays around EUR 10,000 at almost any price

The ordinary IMT scale is progressive. On cheaper homes the rate is low: for a resident's second home it starts at 1%, and for a permanent home the first EUR 106,346 is not taxed at all. A non-resident pays 7.5% from the first euro, with no deduction and no reduced bands. That is why the gap in absolute terms hardly depends on the price in the middle of the market.

In the table, compare the third and fourth columns. The third shows what a resident pays for a second home on the mainland. The fourth shows what a non-resident pays. The calculation uses the Tax Authority tables for 2026; amounts in euros.

Two patterns stand out. Between EUR 200,000 and EUR 700,000 a non-resident overpays EUR 10,000 to 11,000, which ranges from 5% of the price on a modest flat to 1.5% on an expensive one. Between EUR 633,931 and EUR 1,150,853 a resident pays a flat 6%, so the gap equals 1.5% of the price: EUR 15,000 on a million. Above EUR 1,150,853 there is no gap at all, because a resident already pays 7.5%.

Stamp duty of 0.8% of the price is added to IMT on a purchase. It is the same for every buyer, so it is left out of the comparison. Tax is charged on the contract price or on the tax value of the property, whichever is higher. Since 25 May 2026 IMT can be paid on the day of assessment or within 30 days after it; Decree-Law 97/2026 changed that too.

What this means for you. For a buyer of a home up to EUR 700,000, the 7.5% rate means about EUR 10,000 on top of the deal budget. Plan for it before you sign the promissory contract and pay the deposit.

A residence permit holder or an EU citizen can be a non-resident

The law looks at tax residence under Article 16 of the Personal Income Tax Code, not at the passport. A person becomes a Portuguese resident by spending more than 183 days in the country, continuous or not, in any 12-month period. Or by having a home in Portugal during that period in conditions that suggest an intention to live there permanently. A German citizen living in Munich is a non-resident for this rule. A Kazakh citizen who has lived in Porto for two years and pays tax there is a resident.

This leads to the first unwelcome conclusion for some of our readers. A Portuguese residence permit does not by itself make anyone a tax resident. A golden visa holder who spends seven days a year in the country usually remains a non-resident. If such a holder buys a flat for personal use, the rate is 7.5%.

For spouses the Tax Authority issued separate guidance on 4 September 2026. If spouses buy a home as joint marital property, the 7.5% rate applies only if both are non-residents and have never been Portuguese tax residents. One spouse with a Portuguese tax past is enough for the ordinary scale to apply. In co-ownership by shares each co-owner is assessed separately: a resident's share is taxed on the scale, a non-resident's share at 7.5%.

Another detail from the same guidance: the exception for past residence has no time limit. If you were ever a Portuguese tax resident, even many years ago, the ordinary scale applies. It is better to prove this with Tax Authority records than with memories of a move.

What this means for you. Before choosing a property, check your tax status in Portugal and your spouse's. We covered how it is determined in detail in the article on tax residence in Portugal.

Of the three exceptions, two work through a refund

The law lists three situations in which the 7.5% rate does not apply. They work differently, and for planning that is what matters.

The first is that the buyer has already been a Portuguese tax resident. Then the tax is calculated on the ordinary scale straight away and there is nothing to recover.

The second is that the buyer becomes a tax resident within two years of the purchase. The third is that within six months of the purchase the home is let for residential use at a moderate rent and stays let for at least 36 months, continuous or not, during the first five years of ownership. A moderate rent is no more than 2.5 times the 2026 monthly minimum wage. With a minimum wage of EUR 920 that is EUR 2,300 a month, by our calculation. The government may update the threshold by ministerial order.

In the second and third situations the buyer first pays 7.5%. The buyer then applies, and the Tax Authority cancels the difference between the tax paid and the amount due on the ordinary scale. The deadline for the application is six months from the date the buyer became a resident or from the date of the lease. The Tax Authority processes it as an administrative complaint.

In practice this means EUR 10,000 to 11,000 leaves the family budget for up to two and a half years. Miss the six-month deadline and the right to a refund under this rule is lost. A lease carries the opposite risk: if the flat stands empty and the 36 months of letting are not reached, the condition is not met.

What this means for you. If the move to Portugal is already decided, it pays to become a tax resident first and buy afterwards. You then pay on the ordinary scale straight away, possibly even the reduced scale for a permanent home, and do not wait for a refund.

The golden visa and the 7.5% rate are two separate decisions

Many read the news about the 7.5% rate as a sequel to the golden visa story. It is not. Buying property stopped qualifying for residence on 7 October 2023, when Law 56/2023 from the More Housing package came into force. Since then no new residence applications based on buying a home have been accepted. The main option today is units in an investment fund from EUR 500,000 supervised by the Securities Market Commission. The terms are on the page about the Portugal golden visa.

Buying fund units is not subject to IMT as a home purchase, so the new rate does not affect entry into the programme. It affects what happens next. A family gets residence permits, spends the minimum number of days in the country and wants to buy a flat for holidays or a future move. If the family members remain tax non-residents, that purchase is taxed at 7.5%.

In effect the state is consistently separating two flows: investors' money goes into funds, and buying a home without moving costs more. Those who come to live pay the ordinary tax. For those planning a move with tax residence, the D7 visa for financially independent people is a closer fit: after the move the buyer becomes a resident and falls under the exception.

What this means for you. If you hold a golden visa and are thinking of buying a home, first decide whether you will become a tax resident within the next two years. That decides whether 7.5% is a final rate or a temporary one.

When the rate changes nothing and there is no need to hurry

For some buyers the rule means nothing. The first group is buyers of homes above EUR 1,150,853 on the mainland. A resident also pays 7.5% with no deduction at that price, so there is nothing to compare.

The second group is buyers of non-residential property. The rule covers only homes intended exclusively for living in. An office, shop or warehouse is taxed at its own 6.5% rate, and rural land at 5%, as before. More on these rates in the article on property taxes in Portugal.

The third group is buyers with a tax address in a jurisdiction on the Portuguese list of preferential tax regimes, and companies controlled by them. A 10% rate applied to them before, and the new rule expressly leaves it in priority.

The fourth group is those buying for long-term letting at a moderate rent. They pay 7.5% but recover the difference if they meet the conditions. For them the new rule is a cash-flow question, not a price question.

And a word on haste. If your deal is planned for 2027, there is no tax reason to bring it forward: the draft budget does not change the 7.5% rate. For a resident it is the other way round: signing after 1 January 2027 is slightly better if the budget is adopted, as the scale thresholds will rise by 2.3%.

What this means for you. The 7.5% rate hits one scenario: a non-resident buys a mid-market home for personal use and plans neither a move nor a long-term let. If that is not you, decide on the purchase by the usual criteria.

What to do before signing the promissory contract

In Portugal the deposit is usually paid when the promissory contract is signed, long before the notary. So the tax question needs to be settled before that step.

The overall purchase process, from the taxpayer number to registering title, is described in our piece on buying property in Portugal. An overview of the country and its programmes is on the page about Portugal.

What the law does not yet explain

The rule has been in force for five months, and practice has not settled yet. The Tax Authority guidance of September resolved the question of spouses, but not everything.

First, how residence is to be proven for a refund. The law refers to residence under Article 16 of the Personal Income Tax Code, but which document the Tax Authority will accept as sufficient will become clear only from the first applications. Second, purchases through a company. The rule speaks of a non-resident buyer, while the 4 September guidance covers only individuals. Third, the autonomous regions. Madeira and the Azores have higher scale thresholds, and the text of the rule contains no separate exception from the 7.5% rate for them.

Two events are worth watching. The first is the vote on the 2027 budget and its amendments: parliamentary groups may also propose changes to Article 17 of the IMT Code. The second is new Tax Authority guidance on the exceptions. As soon as it appears, we will update this piece.

How this piece was prepared

This piece is based on the text of Decree-Law 97/2026 of 20 May 2026 as published by the Portuguese Tax Authority, including the correction of 13 July 2026; on Article 17 of the IMT Code in its current wording on the Tax Authority portal, checked on 21 October 2026; on Tax Authority guidance Ofício Circulado 40131/2026 of 4 September 2026 on spouses and co-owners; on the 2026 IMT tables, Ofício Circulado 40129/2026 of 6 January 2026; on the 2027 draft budget law, Proposta de Lei 110/XVII, approved by the Council of Ministers on 8 October 2026 and published by the Portuguese parliament; and on Law 56/2023 of 6 October 2023 from the More Housing package. The tax amounts in the table and chart are BRIDGES calculations based on the official tables. The EUR 2,300 rent threshold is our calculation using the decree's formula. This piece does not replace tax advice on a specific transaction.