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What to consider when buying a property in Portugal

As of April 2025, Portugal offers several incentives to support individuals purchasing real estate, particularly targeting young first-time buyers and those investing in property rehabilitation.​

1. Tax Exemptions for First-Time Homebuyers Under 35

Young individuals under the age of 35 who are purchasing their first permanent residence in Portugal can benefit from exemptions on the Municipal Property Transfer Tax (IMT) and Stamp Duty (IS). To qualify: 

  • Property Value Limits: The exemption fully applies to properties valued up to €316,772. For properties valued between €316,772 and €633,453, the exemption applies to the first €316,772, with taxes due on the remaining amount. 

  • Primary Residence Requirement: The property must be intended as the buyer's primary residence, and the buyer must be a tax resident in Portugal.​ 

  • No Previous Property Ownership: The buyer must not have owned any residential property in the past three years. 

These measures aim to reduce the financial burden on young buyers entering the housing market.  

Buying a property in Portugal?
Buying a property in Portugal?

2. Public Guarantee for Housing Loans

The Portuguese government provides a public guarantee covering up to 15% of the loan amount for permanent housing purchases. This guarantee applies to properties valued up to €450,000 and is available until 2025, assisting buyers in securing loans with favorable terms.  


3. Urban Rehabilitation Incentives

Investors and homeowners engaging in the rehabilitation of older properties can access various incentives, including:​ 

  • Tax Benefits: Reductions in Municipal Property Tax (IMI) and IMT for properties located in designated urban rehabilitation areas (ARU).​ 

  • Financial Support: Subsidies and favorable financing options for renovation projects, promoting the revitalization of urban areas and preservation of historical heritage.​ 

These incentives aim to encourage investment in property rehabilitation, contributing to urban renewal and cultural preservation. ​


4. Rental Support Programs

For those not yet ready to purchase, Portugal's Porta 65 program offers rental support to young individuals. The program provides financial assistance to reduce rental costs, with expanded budgets and more flexible eligibility criteria, including benefits for couples where only one partner is under 35.  


Foreign buyers should be aware of the IMT property transfer tax, which varies based on property value and location. For example, properties valued up to €97,064 may be exempt from IMT, while higher-value properties are subject to progressive rates. It's essential to factor this tax into your budget when planning a property purchase in Portugal. ​ 


These initiatives reflect Portugal's commitment to making homeownership more accessible, especially for younger generations and investors contributing to urban development.

Before you purchase, It's advisable to consult with legal and financial experts to navigate these incentives effectively and ensure compliance with all requirements.​


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