If you last modelled a Portuguese purchase before May 2026 and you are not tax resident here, your acquisition budget is wrong — probably by around eleven thousand euros on a mid-market apartment. A decree-law that took effect in late May replaced the progressive IMT scale with a flat rate for non-resident buyers, and it applies from the first euro.
There is also a route back to the ordinary rate that most coverage has buried, and it happens to align precisely with the other major 2026 tax change. This article covers both: what you now pay, and what you can do about it.
Key takeaways: Since 25 May 2026, Decree-Law 97/2026 applies a flat 7.5% IMT to non-resident buyers of urban residential property. On a 300,000 € purchase that is 22,500 € versus 11,606 € for a resident. Non-resident investors now need roughly 30% of the price in cash. Letting at moderate rent for 36 months recovers the difference.
What Decree-Law 97/2026 actually did
Under Decree-Law 97/2026, effective 25 May 2026, buyers who are not tax resident in Portugal pay a flat 7.5% IMT on urban residential property. The rate applies from the first euro, with no progressive brackets, no exemptions and none of the reduced treatment available for own permanent housing.
The scope is narrower than the headlines suggest, and the boundary matters. The flat rate applies only to urban residential property. Land, commercial property and rural property keep the standard rates — 6.5% for other urban property, 5% for rustic property. A non-resident buying a commercial unit is unaffected.
For residents, the 2026 scale is unchanged in structure and was uprated by 2% for inflation. Own permanent housing remains exempt up to 106,346 €, and the IMT Jovem relief still exempts buyers aged 35 or under up to 330,539 €. None of that is available to a non-resident.
Citation capsule: Decree-Law 97/2026, in force since 25 May 2026, applies a flat 7.5% IMT rate to non-tax-resident buyers of urban residential property in Portugal, charged from the first euro without brackets or exemptions. Land, commercial and rural property are excluded and retain the ordinary rates.
Who counts as a non-resident?
The test is tax residence, not nationality, and this catches people out in both directions. A French citizen who is tax resident in Portugal pays the ordinary progressive rates. A Portuguese citizen living and working abroad pays the flat 7.5%. EU and non-EU buyers are treated identically.
Two conditions take a buyer outside the flat rate:
- Existing or prior tax residence in Portugal at the time of acquisition.
- Becoming tax resident within two years of the acquisition. This route is open to individuals only — companies are excluded.
Physical presence is the underlying mechanism: staying more than 183 days, consecutive or not, in any twelve-month period generally establishes tax residence. For buyers genuinely relocating, the practical answer is often to complete the move and then reclaim, rather than to restructure the purchase.
The real cost difference
On a 300,000 € secondary residential property, a Portuguese tax resident pays approximately 11,606 € of IMT — an effective rate of 3.9% under the progressive scale. A non-resident pays 22,500 €. The difference is 10,894 € on an identical transaction.
The impact is not uniform across price points, and that is the part worth planning around:
| Purchase price | Resident treatment | Non-resident | Gap |
|---|---|---|---|
| Below 633,931 € | Progressive, 1–8% marginal | 7.5% flat | Largest, up to ~11,000 € |
| 633,931 € – 1,150,853 € | 6% flat | 7.5% flat | 10,000–17,000 € |
| Above 1,150,853 € | 7.5% flat | 7.5% flat | None |
The distributional effect is counterintuitive. The measure bites hardest on ordinary mid-market purchases and not at all at the top of the market. A non-resident buying a 1.5 million euro villa pays exactly what a resident pays. A non-resident buying a 250,000 € two-bedroom to let absorbs the full surcharge. Whatever the policy intent, the incidence falls on the small investor, not the trophy buyer.
Mixed ownership adds a further wrinkle. Where one buyer is resident and one is not, IMT is assessed per share — but the resident's portion is rated on the full transaction value, not on their fractional share. On a 400,000 € property split equally, the combined bill runs to about 24,650 €. Model the exact figure with the IMT calculator.
The full cash you need at closing
IMT is the largest single acquisition cost but not the only one. For a non-resident buying a 300,000 € investment property at the 80% regulatory LTV ceiling that applies to all non-owner-occupied purchases:
| Item | Basis | Amount |
|---|---|---|
| Deposit | 20% of price (regulatory maximum LTV 80%) | 60,000 € |
| IMT | 7.5% flat, non-resident | 22,500 € |
| Stamp duty on deed | 0.8% of price | 2,400 € |
| Stamp duty on loan | 0.6% of amount financed, term ≥ 5 years | 1,440 € |
| Notary and registration | Estimate | 1,200 € |
| Bank valuation | Estimate | 350 € |
| Legal fees | Estimate | 2,000 € |
| Total cash required | 89,890 € |
That is 30.0% of the purchase price, against the 20% that the loan-to-value rule alone implies. A resident making the same purchase needs about 78,996 €, or 26.3%. The gap between what the LTV headline suggests and what actually leaves your account is ten percentage points of the purchase price.
For a leveraged investor, the effect compounds. That extra 10,894 € is equity that produces no rent, so it dilutes cash-on-cash return directly. Applied to the deal in our Euribor analysis, a surcharge of that size cuts the return on equity by roughly a sixth before the first tenant moves in.
The moderate-rent route back to the normal rate
Here is what most coverage of this change has missed, and it matters more to investors than to anyone else.
A non-resident can reclaim the difference by allocating the property to moderate-rent housing: letting it within six months of acquisition and keeping it let for at least 36 months within the first five years, at a rent not exceeding 2.5 times the national minimum wage — 2,300 € per month in 2026.
That ceiling should look familiar. It is the same 2,300 € threshold that defines a moderate-rent lease for the 10% Category F rate introduced in the same year. The two measures are built on one definition, and together they form a coherent proposition: a non-resident who buys a mid-market apartment and lets it long-term at ordinary rents gets both the IMT surcharge cancelled and rental income taxed at 10% instead of 25%. A non-resident who buys the same apartment for short-let or personal use gets neither.
Portugal has, in effect, priced the difference between an investor who adds long-term housing supply and one who does not. For a buy-to-let investor letting at market rents below the ceiling, the 7.5% rate is a cash-flow timing problem, not a permanent cost.
Three practical cautions apply. The relief is not automatic — it requires a written request to the tax authority within six months of the qualifying event. The tax authority had not published procedural guidance at the time of writing, so the mechanics are still settling. And the 36-month letting commitment is a real constraint: selling or switching to short-let inside the window puts the relief at risk.
| Route | Condition | Available to |
|---|---|---|
| Become tax resident | Within two years of acquisition | Individuals only |
| Moderate-rent letting | Let within 6 months, 36+ months over 5 years, rent ≤ 2,300 €/month | Individuals and companies |
What the market actually did
The measure has already moved behaviour. Mortgages taken out by non-residents fell to 9.7% of all Portuguese mortgage contracts in the second quarter of 2026, down 7.1 percentage points from 16.8% in the same quarter of 2025, according to idealista.
That is a decline of more than 40% in relative share within twelve months — a fast, legible response to a single tax change.
What we would flag for anyone still deciding: the withdrawal of a large buyer segment is not only a cost, it is also an opening. Fewer competing non-resident buyers in the 200,000–400,000 € band means less bidding pressure on exactly the stock where the surcharge bites hardest. An investor who intends to let long-term at moderate rent faces a recoverable tax and a thinner field of rivals. That is not the trade most buyers are making right now, which is usually when a trade is worth examining.
Model your own acquisition with the IMT calculator, then run the full deal through the rental property calculator. For the wider tax picture, see our guide to Portuguese property taxes for foreign investors.
Sources
- idealista/news, IMT a 7,5% trava contratação de crédito habitação por não residentes, 27 August 2026, retrieved 2026-08-27, https://www.idealista.pt/news/financas/credito-a-habitacao/2026/08/27/77020-nao-residentes-pagam-mais-imt-e-contratam-menos-credito-habitacao
- idealista/news, Não residentes a comprar casa: IMT com taxa única de 7,5%, 2 December 2025, retrieved 2026-08-27, https://www.idealista.pt/news/imobiliario/habitacao/2025/12/02/72872-nao-residentes-a-comprar-casa-imt-com-taxa-unica-de-7-5
- ECO, IVA de 6% na construção e IMT de 7,5% para estrangeiros, 2 December 2025, retrieved 2026-08-27, https://eco.sapo.pt/2025/12/02/iva-de-6-na-construcao-para-casas-vendidas-ou-arrendadas-ate-dois-anos-e-imt-de-75-para-estrangeiros/
- URB Law Services, IMT para não residentes: taxa de 7,5% na compra de habitação, 7 July 2026, retrieved 2026-08-27, https://www.urbls.com/2026/07/07/imt-para-nao-residentes-taxa-de-75-na-compra-de-habitacao/
- IMT Calculator Portugal, IMT for non-residents (foreign buyers) in Portugal (2026), retrieved 2026-08-27, https://imtcalc.pt/en/non-residents
- Doutor Finanças, Escalões do IMT sobem 2% em 2026 e jovens ficam isentos até 330.539 euros, retrieved 2026-08-27, https://www.doutorfinancas.pt/impostos/escaloes-do-imt-sobem-2-em-2026-e-jovens-ficam-isentos-ate-330-539-euros/
Frequently asked questions
What is the IMT rate for non-residents in Portugal in 2026?
Since 25 May 2026, under Decree-Law 97/2026, buyers who are not tax resident in Portugal pay a flat 7.5% IMT on urban residential property, charged from the first euro with no progressive brackets and no exemptions. Land, commercial and rural property keep the standard rates.
Does the 7.5% rate depend on nationality?
No. It depends entirely on tax residence. A French citizen who is tax resident in Portugal pays the ordinary progressive rates, while a Portuguese citizen living abroad pays the flat 7.5%. EU and non-EU buyers are treated identically.
Can a non-resident recover the extra IMT?
Yes, through two routes. Becoming tax resident within two years of acquisition qualifies, for individuals but not companies. Alternatively, letting the property as moderate-rent housing within six months and keeping it let at least 36 months within the first five years also qualifies. Both need a written request within six months of the qualifying event and are not automatic.
How much cash does a non-resident need to buy in Portugal?
About 30% of the purchase price. On a 300,000 € investment property at the 80% regulatory LTV ceiling, a non-resident needs roughly 89,890 €: 60,000 € deposit, 22,500 € IMT, 3,840 € stamp duty on deed and loan, plus notary, registration, valuation and legal fees.
Has the 7.5% rate affected the Portuguese market?
Measurably. Mortgages taken out by non-residents fell to 9.7% of all contracts in the second quarter of 2026, down 7.1 percentage points from 16.8% in the same quarter of 2025, according to idealista. That is a fall of more than 40% in relative share within a single year.