Top tips for retiring to Portugal
By International Adviser, 23 Jul 18
What are the big questions that need to be answered before people retire to Portugal? Blevins Franks’ business development director Jason Porter offers a case study highlighting key questions to consider.
Property costs
John and Julia would like to understand the taxes payable for when they buy a property, which they will not rent out.
On purchase, the buyer is potentially liable to:
- IMT, which is a transfer tax payable on purchase. It ranges from 1% to 8%, with rates depending on the price, the property’s ultimate use and whether it is to be the main or a second home.
- Imposto de Selo, an additional stamp duty, of 0.8%, payable on purchase.
- New-builds attract 23% VAT (with no IMT), inclusive in the property price.
Annually, the owner could also be liable to:
- IMI, which is the Portuguese version of UK’s council tax, with rates varying from 0.3% to 0.8%. The rate could be up to 10%, if ownership is via a ‘blacklisted’ (tax haven) structure.
- Introduced in 2017, additional IMI, or ‘AIMI’ is seen as Portugal’s version of a wealth tax, for Portuguese property worth over €600,000 (£535,637, $697,660). Rates are 0.4% for properties in a company, 0.7% for individuals and 1% for property valued over €1m. The €600,000 allowance is per person, so a jointly owned property will only attract AIMI on a value in excess of €1.2m.
What do they need to know about tax in Portugal?
Tags: Blevins Franks | Jason Porter | Portugal
