IMI in Portugal: The Annual Property Tax Explained, with Calculator

How IMI is calculated

The formula is simple:

IMI = tax value (VPT) × municipal rate

The VPT (Valor Patrimonial Tributável) is shown in the property’s Caderneta Predial. It is calculated by the tax office with a legal formula based on the construction value per square metre, the area, the use, the location, quality and comfort features and the age of the building. The price you paid does not enter the formula, and the VPT is usually well below the market value.

Example: an apartment in Porto with a VPT of €120,000 and a municipal rate of 0.324 % pays about €389 IMI a year. Check the current rate of your municipality before relying on an estimate; it can change every year.

Families with dependent children living in their own permanent home receive a fixed reduction if the municipality applies it: €30 for one dependant, €70 for two and €140 for three or more.

Who pays, and what that means for buyers and sellers

IMI is due from whoever is the owner on 31 December. If you buy a property in December, you pay IMI for the entire year; if you sell in December, the buyer pays.

In practice, IMI rarely plays a role in price negotiations, even when a sale takes place towards the end of the year, because the amounts are usually small. If it matters in your case, for example with a high VPT, it can be agreed in the promissory contract (CPCV) that the seller covers part of the year.

When IMI is due

The tax office issues the bill in spring for the previous year:

You can always choose to pay the full amount in May.

How to pay IMI: practical tips for foreign owners

• The bill goes to the address linked to your NIF. If you live abroad, it is sent to your foreign address by post and can arrive late or not at all. Keep your address up to date and activate electronic notifications in the Portal das Finanças, so you see the bill online. More on this in our article on the Portuguese tax number (NIF).
• Pay from a Portuguese bank account. The bill contains a payment reference, which you pay through Portuguese online banking or at a Multibanco ATM. International bank accounts generally cannot pay these references. If you own property in Portugal, a Portuguese bank account is therefore practically essential.
• Set up direct debit if you can. You can authorise the tax office to collect IMI by direct debit from your Portuguese account, so no payment is missed.
• Always pay on time. Unpaid IMI is collected through tax enforcement proceedings, which in Portugal quickly lead to a seizure (penhora), for example of your bank account or the property itself, plus interest and costs. Even a small, forgotten IMI bill can turn into a serious problem.

Exemptions and reductions

• Temporary exemption for your permanent home: if you buy a home to live in permanently, it can be exempt from IMI for three years if its VPT does not exceed €125,000 and your household’s taxable income does not exceed €153,300. You must use it as your permanent home within six months.
• Permanent exemption for low incomes: households with low income and a low-value home can be exempt permanently, within limits set by law.
• Urban rehabilitation: renovated buildings in urban rehabilitation areas can be exempt for a period, usually three years, subject to conditions.
• Family reduction: as described above, depending on the municipality.

AIMI: the additional tax on high-value property

Owners whose residential property and building land together exceed a VPT of €600,000 per person (€1.2 million for married couples or civil partners who opt for joint taxation) pay an additional annual tax, AIMI, on the amount above that threshold:

Companies pay 0.4 % on the full VPT of residential property and building land. Commercial and service buildings are not subject to AIMI.

Higher IMI for empty and neglected property

Municipalities can increase IMI significantly for buildings that have been vacant for more than a year, for ruins and for building land that is not developed, with especially high increases in areas classified as under housing pressure. If you buy a vacant property or a ruin, ask the municipality whether such an increase applies.

How we can help

As your buyer’s agent, we include IMI in your cost overview from the first viewing and help you set up your NIF, bank account and electronic notifications, so no bill is missed. Book a free consultation.