The Portuguese Foreign Minister, Paulo Rangel, reportedly purchased a T1 apartment for 580,000 euros upfront, benefiting from an exemption from the Municipal Property Transfer Tax (IMT), as highlighted by a weekly publication on Wednesday. The intricacies surrounding the conditions for such tax exemptions were also addressed.
The government has clarified that an IMT exemption is applicable if the property is acquired for permanent residential use.
- Permanent Residential Use
“The property must be intended for permanent residential use, and its patrimonial tax value (VPT) or the declared value in the deed must not exceed 92,407 euros in mainland Portugal or 115,508 euros in the Azores and Madeira,” details provided by the government website indicate.
- First Permanent Residence for Individuals Under 35
“Individuals under 35 purchasing their first permanent residence are exempt from the IMT and also benefit from a Stamp Duty (IS) exemption,” the information further states.
Further requirements for qualifying for these exemptions include:
- Individuals must be 35 years old or younger
- The property deed must be signed from August 1, 2024
- No ownership of other residential properties, entire or partial
“The total IMT and IS exemptions apply to property purchases up to 316,772 euros. If the purchase value falls between 316,772 euros and 633,453 euros, the exemption applies only to the initial 316,772 euros, with taxes payable on the amount exceeding this threshold. For purchases exceeding 633,453 euros, no exemptions are applicable. In cases where the property is co-owned, and one party already owns property or is over 35, a 50% exemption is granted,” the document elaborates.
- Residential Lease Intentions
“Property acquisitions intended for future leasing for permanent residence may qualify for exemptions if the property is owned by:
- The State
- Autonomous Regions
- Local Authorities
- Associations or Federations of Municipalities and their services
- Non-commercial entities
- Rehabilitation works
- Rehabilitation Works
“Rehabilitation works must commence within six months post-deed, adhering to conditions stipulated in Article 45 of the Tax Benefits Statute,” it notes.
- For Resale
“Acquisitions intended for resale may be exempted from IMT, provided the resale occurs within three years of the initial purchase. Applicants can apply for exemption upon the deed signing or request a refund upon sale. Immediate exemption requires meeting specific criteria, and the exemption’s validity is contingent on these being satisfied.”
- Forest Intervention Zones
“Properties located in designated forest intervention zones may benefit from IMT exemptions.”
- Acquisition by Credit Institutions
“Properties purchased by credit institutions amid execution, bankruptcy, or insolvency proceedings may also qualify for IMT exemptions.”
- Cultural Heritage Designation
“Exemptions may apply to properties of national interest, regardless of being publicly or privately owned.”
Paulo Rangel purchased a T1 upfront for 580,000 euros, exempt from IMT
