The Municipal Property Transfer Tax (IMT) is a significant cost when buying property. However, there are several situations in which it is possible to benefit from an exemption from this tax. Find out the main conditions for this exemption and how to apply for it.
Exemptions for public interest entities
Purchases made by public or collective interest entities are normally not subject to IMT. These entities include:
- The State and the Autonomous Regions
- Local authorities
- Libraries and museums
- Private social solidarity institutions
- Religious institutions
For a detailed list of the conditions required, see the IMT Code.
Exemption for young people up to 35
From 1 August 2024, young people up to the age of 35 may be exempt from paying IMT on the purchase of their first permanent home, regardless of income. This exemption applies to purchases up to €316,772. Between €316,772 and €633,453, the maximum exemption of the previous bracket is maintained, and above this amount there is no exemption.
Beneficiaries may not be dependants for IRS purposes or own other properties at the date of purchase or in the previous three years. The exemption lapses if the property is used for purposes other than housing, such as letting or tourist activities, within six years, except in the case of sale, a change of workplace to more than 100 km away, or a change in the composition of the household.
Primary and permanent residence
Anyone buying a property exclusively as their primary and permanent residence does not pay IMT if the purchase price does not exceed the limit of the first bracket. In 2024, this limit is €101,917 in mainland Portugal and €127,396 in the autonomous regions of the Azores and Madeira.
Properties for resale
The exemption applies to buyers registered in the business of reselling properties, provided the resale takes place within one year and they have resold at least one property for this purpose in the previous two years.
Rental Support Programme
Properties purchased, refurbished or built for the Rental Support Programme (Programa de Apoio ao Arrendamento) are exempt from IMT. The exemption also applies to building land intended for this programme, provided the prior control procedure begins within two years of the purchase.
Credit institutions
In enforcement, bankruptcy or insolvency proceedings, credit institutions or companies controlled by them are exempt from IMT, in accordance with the requirements of Article 8 of the IMT Code.
Refurbishment works
Properties more than 30 years old or located in urban rehabilitation areas may be exempt from IMT if the works begin within three years of the purchase and result in an improvement of two levels in the property’s state of repair.
Young farmers and forestry
To encourage young farmers to set up, there is an IMT exemption on the purchase of rural properties intended for their first agricultural installation. This exemption also applies to properties in Forest Intervention Zones.
Business operations
In mergers, demergers or transfers of business, there may be an IMT exemption for non-residential properties and, in some cases, residential properties, if these are needed for the operation.
When the IMT exemption lapses
The IMT exemption lapses if:
- The property is not used for the intended purpose within six months of the purchase.
- The property changes purpose within six years of the purchase, except in the case of sale.
- The young farmer gives up or loses the support.
- The property acquired for resale is not sold within one year or is again acquired for resale.
- A property bought by a credit institution is not sold within five years or the buyer has special relationships as defined in the IRC Code.
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