Key figures — as of 2026-10-13: Flat 7.5% IMT on urban residential property bought by non-tax-residents, in force since 25 May 2026 under Decree-Law 97/2026 — no automatic exemptions or progressive reductions apply at purchase; refunds possible only if the buyer becomes a Portuguese tax resident within 2 years or lets the property long-term for at least 36 months within 5 years; stamp duty of 0.8% still applies on top; on a €1m purchase the extra cost versus the old scale is roughly €15,000.
The number that changes the maths
Anyone buying a home in Portugal without being a Portuguese tax resident now pays a flat 7.5% IMT, full stop, regardless of the property's price or type of buyer. Americans and other non-tax residents who buy a home in Portugal now pay a flat 7.5% IMT property transfer tax on the purchase, with no primary residence exemption or reduction, a rate that took effect on May 25, 2026. The change comes from Decree-Law 97/2026, published in Portugal's Diário da República on May 20, 2026, as part of the country's housing tax package.
Before this, non-residents paid under the same ladder as everyone else. Residents still benefit from progressive rates starting at 0% — a scale with bands and deductions that, for mid-market homes, often produced an effective rate well below 7.5%. Not anymore, if you're not resident for tax purposes.
No exemptions, no reductions — by design
The legal text is blunt about it. Decreto-Lei n.º 97/2026 amended the IMT code so that when the buyer is a non-resident and the property is an urban building — or a fraction of one — destined exclusively for housing, the rate is always 7.5%, and none of the usual exemptions or reductions apply. That means the main-home relief, the lower bands for first-time or modest purchases, the IMT Jovem scheme for young buyers — none of it is available to someone who hasn't established Portuguese tax residency at the time of the deed.
There is a narrow route back. The law lets a buyer reclaim the difference afterwards, but only in specific circumstances — if the buyer relocates and becomes a Portuguese tax resident within 2 years, they can claim a refund, or if the home goes into a qualifying long-term rental scheme. Until one of those conditions is met and the paperwork processed through the Autoridade Tributária, the full 7.5% is what gets paid at the notary.
What it costs, in real euros
The scale of the jump depends on price. On a modest flat, the algarvehousehunter.com property guide ran the numbers for a €250,000 purchase: Buy a €250,000 apartment and pay flat 7.5% (€18,750) — that is a €10,000 difference just for living abroad. At the top end it's even starker: at €1 million, a non-resident buyer now pays €75,000 in IMT alone — roughly €15,000 more than under the previous progressive scale at that price point. Stamp duty is unaffected by residency — charged at a flat 0.8 per cent of the purchase price and applies to all buyers regardless of residency status — so it simply stacks on top of whichever IMT rate applies.
GrowIN's own calculation: take that €15,000 gap on a €1m purchase and spread it across a standard 30-year Portuguese mortgage term rather than treating it as a one-off hit. Even though IMT is paid in a single lump sum before the deed, financing that extra amount at a typical mortgage rate works out to roughly €50 a month in interest-equivalent cost over the life of the loan — money a resident buyer simply never has to find. For buyers comparing a €250,000 and a €1m purchase side by side, the proportional bite is actually worse at the cheaper end: a flat 7.5% replaces what would often have been an effective rate closer to 1–3% on modest homes, meaning the percentage increase is steepest exactly where budgets are tightest.
Quotable line — GrowIN Portugal Editorial: "Portugal's property tax now runs on two tracks: one for residents, and a permanently steeper one for everyone buying from abroad."
Why this matters, and what to watch
For retirees eyeing a holiday home, remote workers not yet resident, or anyone planning to buy before relocating, the sequencing now matters enormously. Becoming a tax resident first — or timing the purchase after residency is established — avoids the flat rate entirely, since for many British buyers purchasing a holiday home or investment property, this roughly doubles the IMT bill compared with the old progressive scale. Buyers who can't or don't want to relocate immediately should budget for the full 7.5% upfront and treat any refund as a bonus, not a given — the Autoridade Tributária's processing timelines for these claims aren't yet well tested.
This sits alongside the broader shift already underway in Portuguese property and tax policy this year — the end of NHR for new applicants, the arrival of IFICI, and tighter nationality-by-residency rules — all covered on our tax & NIF hub. Anyone structuring a purchase around future residency should get the order of operations checked by a tax adviser before signing a promissory contract, not after.
The rule is new enough that edge cases — co-ownership splits, company purchases, buyers with prior Portuguese tax history — are still being worked through case by case at Finanças. Expect clarifying guidance over the coming months as more non-resident deals go through the system.