The headlines on Portugal's 2027 State Budget talk about lower taxes on rents and cheaper home purchases. Read the proposal itself and the picture for a property investor is much quieter. The budget law touches IMT only by indexing the brackets, touches IRS only through the general brackets, and carries forward landlord measures that were already passed in May.

That matters, because investors who wait for "the budget" to decide a purchase are waiting for very little. This guide goes through what the proposal (Proposta de Lei n.º 110/XVII/2.ª) actually amends, what it leaves alone, and what each change is worth in euros on a typical deal.

Key takeaways: The OE2027 proposal raises IMT bracket limits by about 2.3% with unchanged rates, so a resident buying a €250,000 investment flat pays €216 less. Non-residents still pay a flat 7.5% (€18,750 on the same flat). The 10% rental-income rate and the €1,000 rent deduction were already law under Decreto-Lei 97/2026. Final vote: 24 November 2026.

Where does the 2027 State Budget stand?

It is still a proposal. The government presented it on 8 October 2026. According to the Assembleia da República's published calendar, the general debate closes with a vote on 28 October, the committee stage runs from 29 October to 24 November, and the final global vote is on 24 November. Every number below can still move during the committee stage.

For property, the relevant text is short. Article 60 of the proposal amends four articles of the IRS code (12-A, 68, 68-A and 70): the bracket table, the solidarity surcharge and the minimum-existence amount. It does not amend the rental-income article, the capital-gains rules or the reinvestment exemption. Article 65 rewrites the IMT tables in article 17 of the IMT code. Article 138 extends a list of tax benefits. That is most of it.

The government's own revenue projections are telling. Dinheiro Vivo reported on 8 October 2026 that the proposal forecasts IMT receipts falling 2.3% and IMI receipts falling 5.6% in 2027. Prices rose 16.5% year on year in the second quarter of 2026 according to INE, while transactions fell 6.4%. A Finance Ministry that expects lower IMT despite that price growth is not budgeting for a busier market next year. That is our reading of the forecast, not a statement in the budget.

How much does the IMT indexation save an investor?

Very little: about €216 on a €250,000 flat and €292 on a €400,000 one. The proposal keeps every IMT rate and lifts each bracket limit by roughly 2.3%. For a flat bought to let (the "other housing" table, alínea c) of article 17), the first bracket moves from €106,346 to €108,792 and the 8% bracket now ends at €648,511 instead of €633,931.

Investment housing, IMT bracket2026 (in force)2027 (proposal)Rate
1st bracket, up to€106,346€108,7921%
2nd bracket, up to€145,470€148,8162%
3rd bracket, up to€198,347€202,9095%
4th bracket, up to€330,539€338,1417%
5th bracket, up to€633,931€648,5118%
Flat rate band, up to€1,150,853€1,177,3236% on the whole value
Above€1,150,853€1,177,3237.5% on the whole value

We ran two purchases through the brackets, the same way the IMT calculator does. Our arithmetic matches the average rates printed in the proposal at each bracket limit (4.1578% at €338,141, for example).

IMT on a €250,000 investment flat Resident, 2026 €8,105.50 Resident, 2027 €7,889.42 Non-resident, 2026 €18,750 Non-resident, 2027 €18,750 Resident: article 17(1)(c) brackets. Non-resident: flat 7.5%. Calculation: investifique. Sources: Portal das Finanças, IMT code art. 17 (2026); Proposta de Lei 110/XVII, art. 65 (2027).
Purchase priceIMT 2026IMT 2027Saving
€250,000 (resident)€8,105.50€7,889.42€216.08
€400,000 (resident)€19,300.11€19,008.01€292.10
€250,000 (non-resident)€18,750.00€18,750.00€0

Is €216 a reason to delay a purchase to January? No. One month of lost rent on a €1,000 lease already costs more. The indexation simply stops inflation from pushing buyers into higher brackets; prices rose far more than 2.3% over the past year, so the real IMT bill on a like-for-like flat is still rising.

In short: Portugal's 2027 State Budget proposal (Proposta de Lei 110/XVII, article 65) lifts every IMT bracket limit by about 2.3% and leaves the rates untouched. A resident buying a €250,000 investment flat pays €7,889.42 instead of €8,105.50. Rents and prices, not the budget, will decide 2027 returns.

Do non-residents still pay the flat 7.5% IMT?

Yes. Article 17(10) of the IMT code, added by Decreto-Lei 97/2026 of 20 May, sets IMT at 7.5% from the first euro, with no exemption or reduction, whenever the buyer of a home is not tax resident in Portugal. The OE2027 proposal rewrites only paragraph 1 of article 17. Paragraphs 10 to 12 are untouched.

So the gap between a resident and a non-resident investor buying the same €250,000 flat is €10,860.58 in 2027, slightly wider than in 2026 because only the resident table was indexed. On a €400,000 flat a non-resident pays €30,000 against €19,008.01.

The law keeps some exits. The rate does not apply if the buyer was previously tax resident in Portugal, if the buyer becomes resident within two years of the purchase, or if the home is let for housing within six months, at a rent within the Decreto-Lei 97/2026 limits, for at least 36 months during the first five years.

In the second and third cases the buyer pays 7.5% and claims back the difference. Our guide to non-resident buying costs walks through the full cash needed at closing.

Does the 2027 Budget cut tax on rental income?

Not by itself. The 10% rate on rental income that the press attributed to the budget is article 45-C of the Tax Benefits Statute (EBF), added by Decreto-Lei 97/2026 and effective from 1 January 2026. It covers housing leases whose monthly rent does not exceed the legal limit, and it runs until 31 December 2029. The budget only books the cost: Dinheiro Vivo reports €209 million for 2027.

The limit is 2.5 times the 2026 monthly minimum wage, which gives €2,300 a month. Below it, an individual landlord pays a 10% autonomous rate instead of the standard 25%. A company letting under the same cap counts only 50% of that rent in its taxable profit. Above the cap, nothing changes.

Here is what that is worth on an illustrative flat let at €1,200 a month, with €2,400 a year of deductible costs (IMI, condominium, insurance). The costs are our assumption; plug in yours in the rental income tax calculator.

Standard 25%Moderate-rent 10%
Annual rent€14,400€14,400
Deductible costs€2,400€2,400
Taxable income€12,000€12,000
IRS€3,000€1,200
After-tax income€9,000€10,800

That €1,800 a year is real money, but it is already in your 2026 numbers if you model correctly.

What OE2027 does add is the indexation of the general IRS brackets by 3.88%, with the first bracket rising from €8,342 to €8,666, according to ECO's reading of the proposal. That only matters if you choose to aggregate rental income with your other income (englobamento) instead of paying the autonomous rate. For most investors paying 10% or 25%, it changes nothing. Our Category F versus Category B comparison covers when aggregation can pay.

Tenants get something too, though again from the May decree. The IRS deduction for rent paid rises from €900 to €1,000 from the 2027 tax year, under article 78-E of the IRS code. It makes no difference to a landlord's tax but slightly improves what a tenant can afford.

Other measures in the proposal that matter for property

None of these is headline material, but each deserves a line in an investor's notes.

  • Urban-rehabilitation benefits extended to 2031. Article 138(4) of the proposal extends article 45 of the EBF, together with articles 58, 59 and 61 to 66, until 31 December 2031. Article 45 is the regime behind IMI and IMT exemptions for qualifying rehabilitated buildings, subject to municipal recognition. For anyone pricing a renovation project, that removes a deadline risk.
  • Worker housing. Article 70 keeps company-provided housing exempt from IRS and social security for 2027, up to the rent limits of the Programa de Apoio ao Arrendamento. It is a niche, but it creates a corporate tenant segment for well-located flats.
  • Corporate tax at 18%. The IRC rate falls from 19% in 2026 to 18% in 2027 and 17% in 2028. That path was set by Lei 64/2025 in November 2025, not by this budget, but it matters for anyone holding property through a company.

And what is missing? No change to AIMI, IMI rates, capital gains, stamp duty or the non-resident regime. If you had been told the 2027 budget "cuts landlord taxes", that is the source of the confusion: the cuts arrived in May.

What to do before the final vote

Mostly, carry on. The budget does not justify bringing a purchase forward or pushing it back, and the only euro amounts it moves on a single flat are in the low hundreds. Three practical steps make more sense than waiting:

  • Re-run your acquisition costs with the 2027 brackets if your deed will be signed after 1 January, and keep the 2026 figures if before. The difference is small but your closing budget should be exact.
  • Check which side of €2,300 your rent sits. A lease just above the cap pays 25%; just below, 10%. On the margin, a slightly lower rent can leave you better off after tax. Our rent increase guide for 2027 explains how the annual update interacts with that.
  • If you are a non-resident, decide before signing whether you will let the property at a moderate rent within six months. That decision is worth more than everything in the budget combined: €10,860 on a €250,000 flat.

Our verdict: OE2027 is a maintenance budget for property. The material changes for investors this year came from Decreto-Lei 97/2026, and those are where your models should already have moved. Watch the committee stage until 24 November for amendments on housing, but don't let it freeze a good deal.

This article is general information based on the proposal as delivered to Parliament. It is not tax, legal or financial advice; confirm your own case with a qualified adviser before acting.

Sources

Frequently asked questions

Does the 2027 State Budget change IMT for property investors?

Only through indexation. The OE2027 proposal raises every IMT bracket limit by about 2.3% and keeps the rates. On a €250,000 investment flat bought by a resident, IMT falls from €8,105.50 to €7,889.42, a saving of €216.08.

Do non-residents still pay 7.5% IMT in 2027?

Yes. The flat 7.5% rate for non-resident buyers of homes was added to the IMT code by Decreto-Lei 97/2026, and the OE2027 proposal does not amend it. Exceptions apply if the buyer becomes resident within two years or lets the property at a moderate rent.

Is the 10% tax on rental income new in the 2027 Budget?

No. The 10% rate for housing leases with rent up to the legal cap (€2,300 a month in 2026) comes from Decreto-Lei 97/2026 and applies from 1 January 2026 until 31 December 2029. The 2027 Budget only accounts for its cost, about €209 million.

When will the 2027 State Budget be approved?

Parliament's calendar sets the general vote for 28 October 2026 and the final global vote for 24 November 2026. Until then every figure is a proposal and can change in the committee stage.