Property tax in Portugal vs Germany: buying, owning, letting, selling

Buying

A resident buying a 300 000 € main home pays about 10 540 € of IMT and 2 400 € of stamp duty — 4,3 % in total, between Bavaria’s 3,5 % and the 6,5 % of North Rhine-Westphalia. The same buyer, not yet tax resident on the day of the deed, pays 22 500 € of IMT, refundable on request if they become resident within two years or let the property at a moderate rent (2 300 € a month or less in 2026) for 36 of the first 60 months.

• 4,3 % total transfer cost on a 300 000 € main home for a resident; 8,3 % while non-resident (refundable)
• 0,3 – 0,45 % IMI on the tax value — usually a few hundred euros a year
• 25 % flat tax on residential rents, 15 % / 10 % / 5 % for long leases
• No ten-year rule: Portugal taxes half the gain whenever you sell, except the reinvested main home

Owning

IMI is 0,3 % to 0,45 % of the valor patrimonial tributário (VPT), a formula value set by Finanças that sits well below market prices, paid in May (up to 100 €), May and November (to 500 €) or May, August and November. A main home with VPT up to 125 000 € and household income up to 153 300 € is exempt for three years after purchase. Homes empty for more than a year can be charged triple.

AIMI adds 0,7 % on the sum of residential VPTs above 600 000 € per person (1,2 million for a couple filing jointly), 1 % above 1 million and 1,5 % above 2 million; companies pay 0,4 % from the first euro. Germany has no equivalent since the wealth tax was suspended in 1997.

Grundsteuer, recalculated from 2025 on the reformed values with each municipality’s multiplier, typically costs a few hundred euros a year for a flat and more for a house; IMI on comparable property is in the same range or lower.

Letting

Portugal taxes residential rents at a flat 25 % of the net rent (IMI, condominium, insurance, repairs deductible; mortgage interest not), falling to 15 % for leases of five to ten years, 10 % for ten to twenty, 5 % beyond, or at the progressive rates by option. The landlord registers the lease with Finanças and pays stamp duty of 10 % of one month’s rent. Germany adds rents to income at the tariff after depreciation (2 %, 3 % for buildings completed from 2023), interest and costs — often producing a tax loss in the early years that Portugal’s flat system cannot.

Cross-border: a Portuguese resident’s German rent is taxed in Germany (art. 6 of the convention) and exempt in Portugal with progression (art. 24); a German resident’s Portuguese rent is taxed in Portugal at 25 % (28 % under domestic law for non-residents until the option) and exempt in Germany with progression.

Selling

Portugal includes 50 % of the gain in income at the progressive rates for everyone, resident or not, after indexing the purchase price; a resident’s main home is exempt if the proceeds buy another main home in the EU/EEA within 36 months. Germany taxes private sales within ten years at the tariff and exempts sales after ten years or of self-used homes (§ 23 EStG). The treaty leaves each property to its own country; Portugal credits German tax on German property, Germany exempts Portuguese property gains with progression. The detail is on the capital gains on German property page.

Buying through a company

A Portuguese company pays IMT at the ordinary scale, AIMI at 0,4 %, IRC 19 % on rents and gains, and its shareholder is taxed again on dividends; a German GmbH owning Portuguese property is a non-resident owner with IMI, AIMI 0,4 %, 25 % IRC on rents and the 7,5 % non-resident IMT. For a home there is no case; for a rental portfolio, sometimes.

Questions