The exemption from the Municipal Property Transfer Tax (IMT) and Stamp Duty (IS) for young individuals has been in effect for a year, during which time the demand for houses for sale has surged while the supply has dwindled, according to idealista.
“Over 40,000 young people have benefited from this government measure, which allows saving thousands of euros in taxes. The demand for houses for sale up to 324,058 euros—the threshold for full tax exemption in these transactions—has skyrocketed in the past year, contributing to a reduction in housing supply,” an analysis by the real estate platform reveals.
The tax exemption for young people up to 35 years old looking to purchase their first permanent residence in the country came into effect last August.
“Since then, Montenegro’s government has highlighted the strong uptake of the measure, particularly by the ‘qualified middle class.’ The latest official figures indicate about 43,000 young beneficiaries by the end of May,” the shared analysis notes.
The platform states that “this rush by young people to purchase homes in the country, without a real increase in new construction or more renovated properties for sale, has likely increased the demand pressure on the existing supply over the past year.”
“This trend is more pronounced for houses sold at the price limit to benefit from full tax exemption (up to 324,058 euros) than for properties on the market with only a reduced tax burden (above that amount up to 648,022 euros)—these values apply only to mainland Portugal,” it concludes.
Coimbra and Leiria stand out
The data further shows that “the demand for houses for sale up to 324,058 euros—and thus covered by the full IMT and IS exemption for young people—has increased in all the major cities analyzed,” but “Coimbra and Leiria stand out, where interest doubled over the past year.”
In Lisbon, demand rose by 96%, and in Porto, by 55%, according to the same data.
“This high interest in purchasing houses within this price bracket caused a drop in the existing supply in most of these cities over the past year—the only exception is Portalegre, where the housing stock grew by 14%. The largest reductions in residential properties available for purchase up to 324,000 euros were observed in Lisbon (-50%), and in Setúbal and Coimbra (both -41%). Porto experienced the least significant drop in supply (-14%),” it adds.
Furthermore, “young people looking to acquire their first home up to 324,000 euros to benefit from the total IMT and IS exemption will find a greater number of houses in Porto, Lisbon, Braga, Aveiro, and Setúbal, with all these cities having more than 1,000 properties available. Meanwhile, Portalegre and Guarda have the fewest houses available within this price range.”
