Bought a house but don’t know how to apply for the IMT and IS exemption at the Tax Office?
Are you under 35 and thinking about buying your first home? The recent exemption from IMT (Municipal Tax on Onerous Property Transfers) and IS (Stamp Duty) offers a great opportunity to save on acquisition costs.
This measure is part of a series of government initiatives aimed at facilitating young people’s access to housing. But what do you need to do to benefit from this exemption? In this article, we’ll explain the practical steps and requirements needed to access this benefit.
What are IMT and IS?
IMT is a tax applied in Portugal whenever a property, whether new or used, is purchased. This tax is paid by the buyer and is calculated based on the higher value between the Patrimonial Taxable Value (VPT) of the property and the transaction price. There are different IMT rates depending on the value of the property and its purpose. For example, in 2024, properties intended for permanent residence valued up to €101,917 are exempt from IMT.
The Stamp Duty (IS) is a tax applied to various legal acts, including the purchase of real estate. For property transactions, IS is applied at 0.8% of the purchase price. Like IMT, IS can also be exempt in certain cases, such as the purchase of a first home by young people under 35, provided they meet the eligibility criteria.
Who is eligible for the exemption?
The IMT and IS exemption is available to young people under 35 who purchase their first permanent residence in Portugal. To qualify for the exemption, the property value must be up to €316,772. Additionally, to be eligible, buyers must:
- Execute the house deed after August 1, 2024; and
- Not own another home or part of another property intended for residence.
For properties valued between €316,772 and €633,453, a partial exemption applies with a reduced rate. Furthermore, for couples where one person already owns a house or is over 35, the exemption will apply to 50% of the property.
How to apply for the exemption?
To apply for the IMT and IS exemption, you need to complete the Model 1 IMT Declaration, available on the Portuguese Tax Office Portal or at a Tax Office in person. During the process, you will need to provide detailed information about the buyers, sellers, and the property. If you qualify for the exemption, the payment forms will automatically show a zero amount for IMT and IS. Make sure that the entire process is completed before the property deed is signed.
Frequently Asked Questions
It’s normal to have questions about the conditions and process. Below, we answer the most common questions, such as the eligibility of foreigners, retroactive exemption, and special cases like inheriting part of a property.
Yes, as long as they are tax residents in Portugal and meet the other requirements.
No, the exemption only applies to transactions made after August 1, 2024. There is no reimbursement for IMT and IS paid before this date.
No, the exemption only applies to the first acquisition of a primary residence. Partial ownership disqualifies you from this benefit.
Yes, as long as the sale occurred more than three years before the new acquisition.
No, this measure is only for first-time homebuyers.
Yes, the exemption applies proportionally to the part of the property acquired by the eligible person.
Not necessarily. The exemption will apply to the part of the property acquired by the person who meets the age requirement.
Looking for more information? Visit the Portuguese Tax Office Portal to submit your application and start planning your future home!