Portugal property tax for American buyers: IMT, stamp duty, IMI, AIMI, US filing

Buying: IMT and stamp duty

IMT is charged on the higher of the price and the tax value (VPT), by slices. 2026 brackets for a main and permanent home of a Portuguese tax resident:

A second home or an investment property pays 1 % from the first euro on the same upper brackets (8 % to 633 931 €). Stamp duty adds 0,8 % of the price; registration (Casa Pronta) costs 375 €, 700 € with a mortgage.

• 18 240 € IMT on a 400 000 € main home (resident) — 30 000 € if non-resident at the deed
• 0,8 % stamp duty on every purchase
• 0,3 – 0,45 % IMI a year on the VPT, a formula value below market
• Nothing to file in the US for a directly owned home — until it produces rent or a gain

Owning: IMI, AIMI, and what the IRS does not ask

IMI runs 0,3 % to 0,45 % of the VPT, set by each municipality (0,8 % on rural land), paid in one to three instalments from May. Because the VPT is a formula (area, location, age, quality), the annual IMI on a 400 000 € apartment is commonly 500–1 000 € — a fraction of a comparable US property tax bill. Empty homes can be charged triple after a year.

AIMI applies above 600 000 € of aggregate residential VPT per owner (1,2 million for a couple opting jointly): 0,7 % on the excess, 1 % above 1 million, 1,5 % above 2 million. A company owning residential property pays 0,4 % from the first euro.

On the American side, a home you own directly is neither an FBAR account nor a Form 8938 asset. Portuguese property tax is not creditable against US income tax (it is not an income tax) and only state and local real property taxes qualify for the itemised deduction — foreign ones do not (IRS Topic 503). A home owned through a Portuguese company is different: the company appears on Form 5471, its accounts count, and personal use of company property is taxed in Portugal too. Buy in your own name unless an accountant has run the numbers.

Letting: 25 % in Portugal, Schedule E in the US

Rent from a long-term lease is taxed in Portugal at 25 % of the net rent (IMI, condominium, insurance, repairs deductible; mortgage interest not), reduced to 15 %, 10 % or 5 % for leases of five, ten or twenty years. Short-term rentals (alojamento local) need a licence and are business income. The treaty (art. 6) gives Portugal the first right; the same rent goes on Schedule E in the US with depreciation over 30 years for foreign residential property, and Form 1116 credits the Portuguese tax. A depreciation-driven US loss does not reduce the Portuguese tax.

Selling: half the gain here, section 121 there

Portugal taxes 50 % of the gain (price less indexed cost, purchase costs, improvements of the last twelve years, selling costs) at the progressive rates — for residents and, since 2023, non-residents alike. A resident’s main home is exempt if the proceeds are reinvested in another main home in Portugal or the EU/EEA within 36 months (24 months before), or, for sellers over 65 or retired, in an annuity or pension product within six months.

The treaty (art. 14) lets Portugal tax the gain first; the US taxes it too, with credit. A Portuguese home that was your principal residence for two of the last five years qualifies for the US section 121 exclusion ($250,000 single, $500,000 joint) — the exclusion covers the US tax, and the Portuguese tax remains unless the reinvestment exemption applies. Reinvesting in a home in the United States does not satisfy the Portuguese exemption (EU/EEA only). Currency movements matter in both computations: Portugal measures the gain in euros, the IRS in dollars at the dates of purchase and sale.

Passing it on

Portugal has no inheritance or gift tax between spouses, descendants and ascendants; other heirs pay 10 % stamp duty on the VPT. There is no probate tax and forced-heirship rules of Portuguese law apply to a resident’s estate unless a will chooses the law of your nationality under the EU Succession Regulation — which an American can do. The US estate tax reaches the Portuguese home only above the $15 million exclusion (2026).

Steps for an American buyer

Questions