Property Tax in Portugal: An Expat's Guide

If you are looking into purchasing property in Portugal for your main residence or as a second home you may be curious about the property taxes that you will have to pay in Portugal on your new property. Property taxes, called contribuicao autarquica in Portuguese, are handled by local authorities and are levied on an annual basis.

If you are simply renting property in Portugal then you have no need to worry about property taxes as property taxes in Portugal are to be paid by property owners and not simply renters living in the property. As a property owner you can expect for your property tax to be assessed based upon the fiscal value of your property, which is also called the rateable value. The fiscal value of your property will be listed in the fiscal register by the local authorities. Historically fiscal values of properties in Portugal were listed in the fiscal register well below the actual value of the property which resulted in low taxes for property owners. Recently there have been a number of revaluations of properties and the fiscal values have been adjusted on the fiscal register to be closer aligned with the actual value of the properties. When determining fiscal value, authorities take into account the market value, location and the standard of local services for the property.

Properties are classified under one of three types: urban properties, rural properties, or a mixture of the two. If your property is classified as an urban property you can expect for the property tax to be assessed at a rate of .07 to 1.3 percent of the fiscal value of the property. If your property is classified as a rural property, you can expect for the property tax to be assessed at a rate of a flat 0.8 percent of the fiscal value of the property. Rural properties can be buildings and houses used only for agriculture and rural activities and non building land outside of urban areas. If your property is owned by an offshore company then property tax will be assessed at a flat rate of 2 percent.