Taxes in Portugal: How to pay your taxes and what administrative steps are necessary?
Easily move to northern Portugal with Authentic-Portugal. Taxation, taxes, administrative procedures. Find a source of essential information to simplify your arrival and new life in Portugal.
taxes to pay in Portugal
If you want to start a new life in the north of Portugal, there are different steps to take and you will be subject to Portuguese taxes.
To help you plan ahead and get a glimpse of all the administrative elements, find out about the different types of taxes you will face if you come to live, work or want to buy real estate.
To get a tax number
First of all, a person who has decided to come and live in Portugal must apply for a Portuguese Tax Number (NIF), which is also called the “numero de contribuinte”.
To obtain it, contact the “Autoridade Tributaria e Aduaneira” (the Portuguese public treasury).
All Portuguese municipalities have a public treasury counter or a "loja de cicadao" (a citizen's center), a structure allowing you to undertake various administrative procedures, including the request for a Portuguese tax number.
This element is necessary for various procedures such as opening a bank account, buying or renting accommodation or a vehicle, paying subscriptions and taxes.
What documents do I need to provide to request a tax number ?
To obtain your tax number, all you have to do is present:
- An ID
- A proof of address concerning your new accommodation.
If you go to live and settle in Portugal, you will be affected by all the compulsory deductions which constitute Portuguese taxes.
Information: To file your tax return, go to the finance portal website and create an online profile. You will be asked for your nif and contact details.
income tax
The amount of income tax will not be the same depending on your personal situation (active or retired person) or if you have NHR (Non Habitual Resident) status.
To apply for this status, a few conditions must be met:
- Over the past 5 years, you must not have been considered a tax resident
- Acquire real estate or justify a durable installation with a long-term rental contract
- Live at least 6 months in the year (consecutive duration or not).
Without NHR status: Income taxes
These are linked to the salary that you have and are deducted directly from it.
Criteria are to be taken into account to calculate the sum of these taxes such as the amount of salary as well as your personal situation (with children or not, married or single).
For retirees with NHR status
Until 2020, people who came to settle in Portugal to enjoy their retirement were exempt from taxes for a period of 10 years.
Today, the tax on the retirement of foreigners has increased to 10%.
For assets with NHR
status Assets with a job in Portugal and NHR status are affected by income tax capped at 20% (over a period of 10 years).
To benefit from this cap, the profession exercised must be considered as a “High Added Value”activity.
Some examples of the professions concerned:
- Directors (general, establishments, commercial, production, etc.)
- Engineers and scientists
- Doctors, dentists and stomatologists
- Teachers working in higher schools
- Experts in ICT (Information and Communication Technologies)
- Writers and Journalists
- Farmers or farm workers
- People working in the forestry or hunting or fishing industry
- Building trades
- Plant operators...
Property taxes
Acquiring real estate in Portugal also requires the payment of certain taxes relating to Portuguese laws.
Real estate purchase tax (IMT)
If you buy a property in Portugal, a tax is to be paid before the acquisition of the latter. This is a municipal tax which will concern the taxable asset value or the value declared on the deed of sale (the IMT is based on the higher amount of these two values).
The IMT is to be paid at the notary with a multibanco card. If you do not have this card, payment must be made in advance by bank transfer.
You will be exempt if the accommodation is intended for rental provided that it is located in a classified or urban rehabilitation area.
The Imposto of Selo: stamp duty
This tax is set at 0.8% of the price of the accommodation.
This amount is to be paid only once, at the time of acquisition with the same procedures as IMT.
Information: this tax is also valid for real estate loans.
Property tax: IMI
The IMI (in Portuguese: Imposto Municipal sobre Imoveis) is the equivalent of property taxes and housing taxes.
The amount (set by the municipality) is to be paid once a year by the owners of a property.
This tax is generally between 0 and 0.5% of the price of the accommodation.
Depending on the total value, payments can be made in several instalments:
- Payment in 3 instalments (in May, August and November) for an IMI greater than 500 euros
- Payment in 2 installments (in May and November) for an IMI between 100 and 500 euros
- Payment in one go if the amount of the IMI is less than 100 euros.
Additional tax
This tax corresponds to the AIMI (in Portuguese: Aditional ao Imposto Municipal de Imoveis) which concerns a person's real estate assets.
The amount is fixed between 0.7% and 1% of the value of the assets.
Taxes on rents (IR)
When you invest in rental property in Portugal, the income generated from the rental of a property is subject to a tax rate of 28%.
European countries sign tax treaties so that anyone renting a property in Portugal but residing in another country is not subject to double taxation.
Are you looking for accommodation in the north of Portugal? Many properties for rent or purchase are offered in our real estate catalog.
