Key figures — as of 2026-09-10: Full IMT + Stamp Duty exemption now covers property purchases up to €330,539 (up from €324,058 in 2025) — partial exemption extends to €660,982 — Azores/Madeira thresholds are 25% higher at €413,174 / €826,228 — the regime applies to first-permanent-home buyers aged 35 or under on the deed date, regardless of nationality.
The number that matters
Buy your first home in mainland Portugal for €330,539 or less this year, and — provided you're 35 or younger on the day of the deed — you owe zero IMT (property transfer tax) and zero Stamp Duty on the purchase. The maximum value of this bracket will increase from €324,058 to €330,539 in 2026. That 2% uplift, confirmed in the 2026 State Budget, follows the same indexation applied across the whole IMT bracket system.
For foreigners settling in Portugal — many arriving under a D7, D8 or work-based residence permit and buying their first Portuguese home in their thirties — this is one of the more generous tax breaks going. It's nationality-blind: the rule turns on age, home-buyer status and tax residency, not on where you were born.
How the exemption actually works
The IMT Jovem exemption is total on purchases up to €330,539; above this limit, the exemption is partial, applying an 8% rate up to €660,982. Beyond that upper ceiling, no exemption applies at all and standard rates kick in from the first euro. In the Azores and Madeira, the same logic applies but the limits are 25% higher: full exemption up to €413,174 and partial exemption up to €826,228.
The mechanics of the partial band matter for anyone buying above the free threshold. Tax is charged only on the slice of the price that exceeds €330,539 — not on the whole purchase. A worked example from Literacia Financeira illustrates this: on a €400,000 house the tax applies only to the €69,461 above the threshold, coming to €5,557 of IMT plus €556 of Stamp Duty — €6,113 total, versus €21,437 without the exemption.
To qualify, buyers must be 35 or under on the deed date, buying a first permanent primary residence, and — per the current rules — not have owned a home in the last 3 years, and not be a tax dependent, with a Modelo 1 do IMT filed before signing. Couples where only one partner qualifies don't lose the benefit outright — the exemption simply applies to that person's share of the property. When a property is bought by two owners and only one is 35 or under and meets all requirements, the exemption isn't lost — it applies proportionally to the eligible buyer's share.
GrowIN's take on the numbers
Line up the successive thresholds and the trend is clear: the exemption ceiling has climbed from €316,772 at launch in August 2024 to €330,539 now — a cumulative rise of roughly 4.35% in under two years, tracking general property-price and cost-of-living indexation rather than any policy expansion. For a foreign buyer priced at the very edge of the old 2025 ceiling, that extra €6,481 of headroom is the difference between paying nothing and owing tax on a small slice of the price — modest, but it matters in Portugal's tighter-margin entry-level housing segments where sale prices routinely land just above round-number brackets.
"A 2% indexation sounds bureaucratic, but on a first home near the ceiling it's the line between a tax-free deed and a tax bill," notes GrowIN Portugal Editorial.
What this means in practice
Foreign residents buying their first Portuguese home should request the exemption via the Modelo 1 do IMT on the Portal das Finanças before the deed is signed — it isn't applied automatically. To request exemption from IMT and Stamp Duty, you must complete the IMT Model 1 declaration on the Finance Portal, or submit it via the e-balcão. You'll need a NIF and, in most cases, confirmed Portuguese tax residency tied to the property as your habitual address. Anyone weighing whether to apply now or wait should also check the IRS Jovem income-tax relief and the state-backed 100% mortgage guarantee for under-35s, both of which can be stacked with IMT Jovem on the same purchase.
What to watch next
The 2% indexation is now an annual pattern, so expect another adjustment in the 2027 State Budget. Anyone close to the €330,539 or €660,982 lines should get a formal Portal das Finanças simulation before signing a promissory contract (CPCV) — a few thousand euros either side of the threshold changes the tax bill materially. For a fuller walkthrough of NIF setup, tax residency and what non-EU buyers specifically need to arrange before a Portuguese property purchase, see our tax & NIF guide, and for the wider relocation timeline, relocation. GrowIN's team can also help coordinate the paperwork through services.
Buyers under 35 eyeing a first Portuguese home now have a slightly bigger tax-free runway than they did last year — worth confirming against the official brackets before making an offer.