Taxation of Property in Portugal
When buying property in Portugal it is worth taking some time to understand and calculate what additional costs will be involved over and above the purchase price. As well as solicitor and notary costs tax will be a major consideration and there are a few taxes it is worth investigating.
Tax representation in Portugal
Before considering the taxes themselves it is important for all those seeking to buy a house, apartment or other property in Portugal to realise that they will need to be registered with the Portuguese tax authorities and to have a Fiscal Number - the equivalent to the National Insurance Number in the UK. It is also a legal requirement for all non-resident property owners in Portugal to appoint a local Fiscal Representative who will deal with all the necessary returns and official communications with the tax authorities.
The authorities will not allow a transaction to go through unless they have the name of someone in Portugal entitled to handle the tax affairs of the owner - this is to avoid problems getting hold of the relevant person to deal with queries and/or issues. If you wish to change your Fiscal Representative this can only be done by appointing a replacement - you cannot cease to have a representative. Even once the property is sold your representative will need to remain in place until the expiration of four years - the period during which the authorities can carry out a tax inspection.
Property Taxes in Portugal
We have various articles explaining what taxes are involved when property is purchased and, where appropriate, what the tax rates are. However, these should be used as a guide only since tax laws and rates can change at any time. It is advisable to consult your lawyer or tax specialist before progressing with a transaction so that you have the most up-to-the-minute data on taxes and rates.
The key taxes to take into consideration are:
and VAT
