Key figures — as of 2026-08-19: Flat 7.5% IMT now applies to all non-tax-resident buyers of urban residential property — no bands, no deductions, no primary-residence exemption — under Decree-Law 97/2026 (published 20 May 2026, in force since 25 May 2026) — a €250,000 apartment that would have cost roughly €8,000 in IMT under the old resident-style scale now costs €18,750 — a refund is possible if the buyer becomes Portuguese tax resident within two years, or lets the property long-term at a rent capped around €2,300/month for at least 36 of the following 60 months.
The single change that matters most
If you're a foreigner buying a home in Portugal without becoming a tax resident, your transfer-tax bill just moved from a sliding scale to a flat, non-negotiable rate. The most notable change is a flat 7.5% IMT rate applied to all non-resident buyers for urban properties, replacing the previous tiered structure based on property price, location and purpose. The measure sits inside the government's wider "Construir Portugal" housing package, and it aims to encourage housing supply, boost construction and rehabilitation, and improve access to housing for residents.
Legally, it now lives in Article 17 of the IMT Code, introduced by Decree-Law 97/2026. Practitioners tracking the enactment note it carries no transitional cushion — the rate simply started applying from the day the decree took effect, which several legal trackers place at 25 May 2026, five days after the diploma's publication.
The numbers, worked through
Under the old system, non-residents paid the same progressive brackets as residents buying a second home — a scale that started low and climbed with the price, with deductions built in. In the old system, a buyer purchasing a €250,000 apartment would have paid approximately €8,000 in IMT — under the new flat rate, the same purchase costs €18,750. Scale that up and the gap widens further: for a €500,000 property, a non-resident might have paid between €25,000 and €30,000, depending on the bracket — under the flat 7.5% rate, it goes up to €37,500.
The pain isn't evenly spread. Analysts modelling the reform find the new rule has the biggest impact in the €200k-€700k range — exactly where most foreign buyers shop for apartments and holiday homes, adding around €10,000-€11,000 extra regardless of exact price within this band, while above roughly €1.15 million, there's no difference at all because the old top-bracket rate was already close to 7.5%.
Crucially, this isn't a nationality test. The rule is based on tax residency, not nationality — EU and non-EU buyers are treated the same. And it's narrow in scope: the flat rate applies only to urban residential property, while land, commercial property, and rural property are not affected.
Two ways to get it back
The decree isn't purely punitive — it's designed as a deposit, not a permanent penalty, for buyers who genuinely plan to live in or rent out the property. You can ask the Tax Authority to cancel the difference between the 7.5% paid and the standard progressive rates if, after the purchase, you either become a Portuguese tax resident within two years of the acquisition, or allocate the property to moderate-rent long-term housing. The rental route has strict conditions: a lease signed within six months of the purchase, with the property let for at least 36 months within the first five years, at a rent within the moderate cap.
Miss those windows, though, and the surcharge is permanent. Buyers should also budget for the mechanics of reclaiming it — the refund is applied for after the fact, and there's no guarantee it arrives quickly, so the cash outlay at the deed is real regardless of your longer-term plans.
GrowIN's calculation
Take a fairly ordinary Algarve or Silver Coast purchase — a €300,000 second home. Before the reform, a resident buyer on that price paid roughly €11,790 in IMT; non-residents were taxed on broadly the same scale. Under the flat 7.5% rule, the same purchase now generates €22,500 in IMT alone — an increase of close to €10,700. That's a striking coincidence worth flagging: it's almost exactly one year's worth of Portugal's €920/month minimum wage, gone in a single tax line before you've even paid stamp duty or a notary. "For a non-resident buying a mid-market Portuguese home, the new IMT surcharge alone can swallow a full year's minimum wage," as GrowIN Portugal Editorial puts it.
What to watch next
Expect implementation friction over the coming months — tax offices and notaries are still calibrating systems to the new Article 17 rules, and disputes over what counts as "moderate rent" or a qualifying tenancy are likely. Anyone already mid-transaction should confirm with their lawyer or notary exactly which rate applies to their signing date, and non-residents seriously weighing relocation may find it now makes clearer financial sense to establish tax residency before completing a purchase rather than after. For the fuller picture on residency triggers, NIF requirements and the IFICI regime that often accompanies a move, see our tax and NIF guide.
This is a fast-moving area of Portuguese tax law, and outcomes depend on how Finanças applies the refund mechanism in practice — always confirm current rates and conditions with a licensed accountant or the Autoridade Tributária before signing a CPCV.