In brief
Since 25 May 2026, a buyer who is not resident in Portugal pays IMT at a flat 7.5% on residential property, with no exemptions or reductions, under Decreto-Lei 97/2026. The difference compared with the ordinary table can be cancelled if you become resident in Portugal within two years, or let the property for housing at a rent of up to EUR 2,300 a month, and anyone who was a Portuguese resident in the past is outside the rule altogether. On top of that there is 0.8% stamp duty on the purchase, annual IMI of 0.3% to 0.45% of the registered value, and AIMI on aggregate registered value above EUR 600,000. On a sale, half of the gain is taxed in Portugal at the income tax brackets, and in Israel the gain is reported and taxed, with a credit for the Portuguese tax under the tax treaty.
Key takeaways
- 1IMT for non-residents: a flat 7.5% on urban property intended exclusively for housing, with no exemptions, for acquisitions from 25 May 2026 (Decreto-Lei 97/2026). On a EUR 300,000 apartment that is about EUR 10,900 more than the ordinary table.
- 2The difference is cancelled on application to the Portuguese tax authority within six months: if you become resident in Portugal within two years, or let the property for housing within six months of the purchase, at up to EUR 2,300 a month, for at least 36 months in the first five years.
- 3Every year: IMI of 0.3% to 0.45% of the VPT of urban property, and AIMI of 0.7% to 1.5% only where the total VPT of your residential properties exceeds EUR 600,000 per person.
- 4On a sale: since 2023 only half of the gain is taxed in Portugal, at brackets of 12.5% to 48% (2026), and the bracket is set by your worldwide income, including your income in Israel.
- 5Under the Israel-Portugal treaty, both Portugal and Israel may tax the gain, and Israel gives a credit for the Portuguese tax. IMT, stamp duty, IMI and AIMI are not income taxes, so no credit is given for them under the treaty.
Which taxes does an Israeli pay when buying property in Portugal?
On the purchase you pay IMT and stamp duty. Every year you pay IMI, and owners of high-value property also AIMI. On a sale you pay income tax in Portugal on the gain, and you report it in Israel as well. We cover the taxation of rental income in a separate guide on letting and Alojamento Local, and the stages of the transaction in our guide on the CPCV and the escritura.
| Stage | Tax | Rate (as of October 2026) | Calculated on | Notes |
|---|---|---|---|---|
| Purchase | IMT | Flat 7.5% for a non-resident. Others: progressive table up to 7.5% | The contract price or the VPT, whichever is higher | Exceptions and an option to cancel the difference |
| Purchase | Imposto do Selo (stamp duty) | 0.8% | The transaction value | Paid together with IMT, before signing |
| Mortgage from a Portuguese bank | Imposto do Selo | 0.5% to 0.6% of the principal, and 4% on interest and fees | The loan amount and the interest | The rate on the principal depends on the loan term |
| Holding, every year | IMI | 0.3% to 0.45% for urban property, 0.8% for rural property | The VPT | Each municipality sets its own rate |
| Holding, every year | AIMI | 0.7%, 1% and 1.5% for an individual | The total VPT of residential properties above EUR 600,000 | Company: 0.4%, no deduction |
| Sale, in Portugal | IRS on capital gains | 50% of the gain, at brackets of 12.5% to 48%, plus a solidarity surcharge | The adjusted gain | The bracket is set by worldwide income |
| Sale, in Israel | Capital gains tax | Under Israeli law | The gain under Israeli rules | Credit for the Portuguese tax, under Article 23 of the treaty |
Sources: the IMT Code and the IMI Code on the Portuguese tax authority's website, and PwC Worldwide Tax Summaries (reviewed in July and October 2026). VPT is the valor patrimonial tributário, the registered value of the property in the tax register. It appears on the caderneta predial and is not necessarily the same as the market price.
How much IMT does a non-resident of Portugal pay in 2026?
7.5% of the price, at a flat rate and without any exemption or reduction, when buying an urban property or a unit in a building intended exclusively for housing. The rule is set out in Article 17(10) of the IMT Code, added by Decreto-Lei 97/2026 of 20 May 2026. The decree was issued under the enabling law Lei 9-A/2026, as part of a tax package to boost housing supply, and not in the State Budget Law for 2026. The decree sets no special commencement date for this provision, and according to the Portuguese consumer association DECO it applies to acquisitions from 25 May 2026. The relevant date is the day the deed of sale is signed.
Who counts as a non-resident? Anyone who is not resident in Portugal for tax purposes, under Article 16 of the IRS Code, on the date of the purchase. The Portuguese tax authority clarified in Ofício-Circulado 40131/2026 of 4 September 2026 that anyone who was a Portuguese resident in the past, at any time, pays under the ordinary table and not 7.5%. This is relevant, for example, to Israelis who lived in Portugal and returned to Israel.
The rate applies only to property "intended exclusively for housing". Other urban property, for example commercial property, is taxed at 6.5% under the ordinary rules.
When can the difference be cancelled and refunded?
In two cases, and only if you apply in time. Under Article 17(11), the tax authority cancels, at your request, the difference between the tax you paid and the tax under the ordinary table, where one of the following applies:
- You became resident in Portugal for tax purposes within two years of the purchase.
- The property was let for housing: it was allocated to residential letting within six months of the purchase, at a monthly rent not exceeding the cap in the decree, and was let for at least 36 months, consecutive or not, in the first five years. The cap is 2.5 times the 2026 minimum wage, that is EUR 2,300 a month according to PwC and DECO.
The application is filed through an administrative complaint (reclamação graciosa), within six months of the day you became resident or the day the lease was signed. Missing the deadline may cost you the refund. The law refers to a residential lease, so short-term letting (Alojamento Local) probably does not meet the condition.
According to the guidance, where spouses married under a community property regime buy together, there is one transaction and one assessment, and 7.5% applies only if both are non-residents and neither of them was ever resident in Portugal. If one of them becomes resident within two years, the cancellation of the difference can be requested. In ordinary co-ownership (compropriedade), or for spouses under separation of property, each buyer is assessed separately, according to his or her share.
What does it come to in practice compared with the ordinary table?
For apartments priced above about EUR 170,000, the 7.5% rate costs about EUR 9,500 to 17,300 more than the ordinary table, and the difference disappears only above EUR 1,150,853. This is the ordinary table for residential property that is not the buyer's permanent home, Article 17(1)(c), with the amounts updated by the State Budget Law for 2026 (Lei 73-A/2025):
| Taxable value (EUR) | Marginal rate | Average rate at the top of the bracket |
|---|---|---|
| Up to 106,346 | 1% | 1% |
| 106,346 to 145,470 | 2% | 1.2689% |
| 145,470 to 198,347 | 5% | 2.2636% |
| 198,347 to 330,539 | 7% | 4.1578% |
| 330,539 to 633,931 | 8% | Not applicable |
| 633,931 to 1,150,853 | 6% on the whole amount | 6% |
| Above 1,150,853 | 7.5% on the whole amount | 7.5% |
Source: Article 17 of the IMT Code on the Portuguese tax authority's website, as of October 2026. A Portuguese resident's permanent home has a more favourable table, starting with an exemption up to EUR 106,346. This is the difference at a few sample prices:
| Apartment price (EUR) | IMT under the ordinary table | IMT for a non-resident (7.5%) | Difference | Stamp duty 0.8% |
|---|---|---|---|---|
| 200,000 | about 4,606 | 15,000 | about 10,394 | 1,600 |
| 300,000 | about 11,606 | 22,500 | about 10,894 | 2,400 |
| 500,000 | about 27,300 | 37,500 | about 10,200 | 4,000 |
| 700,000 | 42,000 | 52,500 | 10,500 | 5,600 |
| 1,500,000 | 112,500 | 112,500 | 0 | 12,000 |
The calculation assumes the contract price is higher than the VPT. Under Article 12 of the IMT Code, the tax is calculated on the higher of the two. As explained in our guide on the purchase stages, IMT and stamp duty are paid before signing, and the notary will not sign without proof of payment.
The same decree introduced 6% VAT on the construction of apartments sold as the buyer's permanent home (verba 2.42.1). A buyer who does not make the property his or her permanent home within six months is exposed to an IMT surcharge of 10% of the taxable value. If a developer's contract mentions this benefit, check it before signing.
How much stamp duty is paid, and what about a mortgage?
Stamp duty (Imposto do Selo) of 0.8% applies to every purchase, including by non-residents, and there is no refund mechanism for it. On a loan from a Portuguese bank, according to PwC, additional stamp duty applies: 0.5% to 0.6% of the principal of a loan for a term of more than one year, depending on the term, and 4% on interest and fees.
What happens when buying through a company from a tax haven?
A company domiciled in a jurisdiction on Portugal's blacklist, or controlled by such an entity, pays 10% IMT without exemptions, and IMI and AIMI at 7.5% a year. These rules do not apply to individuals. The list is in Portaria 150/2004, and the latest update (Portaria 292/2025/1) removed Hong Kong, Liechtenstein and Uruguay from 1 January 2026. Israel is not on the list. The United Arab Emirates, for example, is on it, so anyone holding assets through a company in Dubai should review the structure before the purchase.
How much IMI is paid each year?
IMI is an annual municipal tax of 0.3% to 0.45% of the VPT of urban property, and 0.8% for rural property. Each municipality sets the rate within the range every year. The tax is owed by whoever is registered as owner on 31 December, and is paid in the following year: up to EUR 100 in a single payment in May, up to EUR 500 in two payments, in May and November, and above that in three payments, in May, August and November. Example: for an apartment with a VPT of EUR 200,000, in a municipality that set 0.3%, you will pay EUR 600 a year, in three instalments.
There are also surcharges: urban property left vacant for more than a year, or in a state of ruin, is taxed at three times the rate. In housing pressure areas, municipalities may increase the rate by up to 25% for property that is not a permanent home, and by up to 100% for property used for Alojamento Local.
When does AIMI apply and how is it calculated?
AIMI, the additional IMI, applies only where the total VPT of your residential properties in Portugal, on 1 January, exceeds EUR 600,000 per person. It applies to individuals regardless of residence. Properties classified as commercial, industrial or services are not included in the base. The tax is assessed in June and paid in September.
| Owner | Deduction | Rates |
|---|---|---|
| Individual | EUR 600,000 | 0.7% on the part above the deduction, 1% on VPT above EUR 1,000,000 and up to EUR 2,000,000, 1.5% above EUR 2,000,000 |
| Spouses who opted for joint taxation | EUR 1,200,000 | The brackets are doubled: 1% above EUR 2,000,000 and 1.5% above EUR 4,000,000 |
| Company | None | 0.4% |
| Entity from a blacklisted jurisdiction | None | 7.5% |
Source: Articles 135-C, 135-D and 135-F of the IMI Code, as of October 2026. Example: an individual whose properties have a total VPT of EUR 800,000 will pay 0.7% on EUR 200,000, that is EUR 1,400 a year. Spouses each registered as owner of half of a property with a VPT of EUR 1,000,000 will pay no AIMI at all. The joint taxation option is filed between 1 April and 31 May. Check with a local adviser whether it is also available to non-resident spouses.
How much tax is paid in Portugal when selling the property?
Since 2023, a non-resident selling property in Portugal is taxed on only half of the gain, but at the ordinary income tax brackets, 12.5% to 48% in 2026, plus a solidarity surcharge of 2.5% or 5% on high incomes. To determine the bracket, you must also declare in the Portuguese return your income from outside Portugal, including in Israel. As a result, an Israeli with a high income will in practice pay about 24% of the whole gain, and in extreme cases up to about 26.5%. An Israeli with a lower income will pay less.
Until 2022, non-residents paid 28% on the whole gain, while Portuguese residents were taxed on only half of it. Following case law of the Court of Justice of the European Union holding that the distinction is discriminatory (Hollmann, C-443/06), the State Budget Law for 2023 abolished the 28% rate. The new rule applies to all non-residents, including outside the EU, Israelis among them.
The gain is calculated as the sale price, less the acquisition cost adjusted by a monetary correction coefficient (coeficiente de desvalorização monetária), and less deductible expenses. Non-residents cannot file a joint return and do not receive personal tax credits. The gain is reported in the annual return in Portugal (Modelo 3) in the year after the sale.
The reinvestment exemption is intended for someone selling his or her permanent home, so it is usually not relevant to a holiday home or an investment apartment. Decreto-Lei 97/2026 added, for sales in 2026 to 2029, an exemption for those who reinvest the proceeds in properties in Portugal let at a moderate rent. Its application to non-residents should be checked with a Portuguese tax adviser.
What does the Israel-Portugal tax treaty provide?
The treaty was signed in Lisbon on 26 September 2006 and entered into force on 18 February 2008, and for income taxes not withheld at source it applies from 1 January 2008. Under Article 13(1), a gain of an Israeli resident from the sale of immovable property in Portugal "may be taxed" in Portugal, but Israel does not give up its own right to tax. Under Article 23(2), Israel gives a credit for the Portuguese tax, up to the Israeli tax on the same income. A similar rule applies to rental income (Article 6), and under Article 13(4) also to the sale of shares deriving more than 50% of their value from immovable property in Portugal.
Important: under Article 2, the treaty applies only to income taxes. IMT, stamp duty, IMI and AIMI are not income taxes, so no credit is given for them under the treaty. Check with your accountant in Israel whether IMT and the acquisition expenses can be recognised as part of the property's cost in calculating the Israeli capital gain.
What must be reported in Israel?
As Israeli residents, you are liable to tax on the gain in Israel as well, and you receive a credit for the Portuguese tax. An individual generally pays Israeli capital gains tax of 25% on the real gain. If the tax in Portugal is lower, the difference will be paid in Israel. The Israeli calculation is made under the rules of the Income Tax Ordinance, so the result may differ from the Portuguese calculation.
On reporting: a sale of property abroad is reported to the Israel Tax Authority within 30 days, in addition to the annual return. Holding assets abroad, transferring large sums abroad or receiving rental income generally requires filing an annual return (Form 1301). Transfer the sale proceeds to Israel with full documentation: the deed of sale, proof of payment of the tax in Portugal and the account details.
Checklist for an Israeli investor before buying in Portugal
- Check your residence status: whether you were ever resident in Portugal, and whether you will move there within two years. This determines whether you pay 7.5%.
- Decide on the ownership structure before the CPCV: individual, spouses, co-ownership or a company. The structure affects IMT, AIMI and the tax on a sale.
- Ask for the caderneta predial: it shows the VPT and the property's classification.
- Plan in advance any letting that qualifies for the refund: allocation to letting within six months, up to EUR 2,300 a month, 36 months of letting in five years, and an application within six months of signing the lease.
- Budget for the purchase costs: IMT, 0.8% stamp duty, and if there is a mortgage, also stamp duty on the loan.
- Prepare for the annual payments: IMI and AIMI. Appoint a tax representative or sign up for the tax authority's electronic notifications, so that you do not miss assessments.
- Keep every document: the contract, the deed of sale and receipts for IMT and renovations. They are the basis for calculating the gain on a sale, in both countries.
- If you are not travelling to Portugal, sign remotely: a power of attorney signed in Israel, apostilled and translated, allows a local lawyer to sign on your behalf.
What to do before signing a CPCV, and how we accompany you
The tax calculation is best done before the preliminary agreement, not once the deposit has been paid. Your residence status, the ownership structure and the intention to let determine whether you pay 7.5% or the ordinary table, how much AIMI you pay and how much tax applies on a sale. The acts required by Portuguese law, such as signing the escritura and representation before the tax authority, are performed by licensed local lawyers and notaries in Portugal. We coordinate from Israel: we check the documents and the calculation from the perspective of an Israeli buyer, prepare a power of attorney with an apostille, and coordinate the reporting and the credit with your accountant in Israel.
The information here is general information, as of October 2026, and is not legal or tax advice for a specific case. The IMT rule for non-residents is new, and the Portuguese tax authority continues to publish guidance on its application, so the current position should be checked before any transaction.
Frequently asked questions
Does an Israeli buying an apartment in Portugal pay 7.5% IMT?
Yes, if he or she is not resident in Portugal and was never resident there, and buys, from 25 May 2026, an urban property intended exclusively for housing. The rate is flat, with no exemptions. If you become resident within two years, or let the property for housing under the conditions of the law, you can apply to cancel the difference within six months.
Was the 7.5% IMT for non-residents set in the State Budget Law for 2026?
No. It was set in Decreto-Lei 97/2026 of 20 May 2026, issued under the enabling law Lei 9-A/2026 as part of a tax package to boost housing supply. The State Budget Law for 2026 (Lei 73-A/2025) updated the bracket amounts in the ordinary tables.
Above what value is AIMI payable in Portugal?
An individual pays AIMI only if the total VPT of his or her residential properties in Portugal on 1 January exceeds EUR 600,000, and only on the part above that amount: 0.7%, and 1% and 1.5% on VPT above one million and two million euros. The VPT is the registered value, not the market price. Spouses who opt for joint taxation receive a deduction of EUR 1,200,000.
How much tax does an Israeli pay in Portugal when selling an apartment?
Half of the gain is taxed at the income tax brackets of 12.5% to 48% (2026), plus a solidarity surcharge on high incomes. The bracket is set by your worldwide income, so an Israeli with a high income will pay about 24% of the whole gain.
Can I get a credit in Israel for the IMT and IMI I paid in Portugal?
Not under the treaty, because it applies only to income taxes. The credit is given for Portuguese income tax, such as the tax on the capital gain and on rental income. Whether IMT can be recognised as part of the property's cost in calculating the gain in Israel should be checked with an accountant.
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- Decreto-Lei n.º 97/2026, de 20 de maio (Diário da República, 1.ª série, n.º 97) - housing tax measures, new art. 17(10)-(12) CIMT
- Autoridade Tributária e Aduaneira - Ofício-Circulado n.º 40131/2026 (4 September 2026): scope of art. 17(10) CIMT for individuals
- Portal das Finanças - Código do IMT, artigo 17.º (Taxas)
- Portal das Finanças - Código do IMI, artigo 135.º-F (AIMI rates)
- PwC Worldwide Tax Summaries - Portugal, Corporate: Other taxes (IMT, stamp tax, IMI, AIMI)
- PwC Worldwide Tax Summaries - Portugal, Individual: Income determination (capital gains of non-residents)
- Convention between Portugal and Israel for the avoidance of double taxation (2006), Resolução da Assembleia da República n.º 2/2008