New Tax Exemption for Young First-Time Homebuyers Approved in Portugal

Significant Financial Relief for Young Buyers Coming This August 

We are pleased to announce that on June 12th, the Assembly of the Republic approved Proposal of Law No. 6/XVI/1st, introducing significant tax exemptions for young first-time homebuyers in Portugal.

Key Highlights of the New Legislation:

1. IMT and Stamp Duty Exemption:

• The new law exempts young individuals, up to the age of 35, from Tax on Onerous Property Transfers (IMT) and Stamp Duty when purchasing their first home for permanent residence.

2. Eligibility Criteria:

• Property Type: The property must be an urban building or an autonomous fraction within an urban building, exclusively for the buyer's permanent residence.
• Purchase Value: The acquisition value must not exceed €316,772, which corresponds to the maximum limit of the 4th IMT bracket.
• First-Time Purchase: This must be the buyer's first property purchase intended for permanent residence.
• Age Requirement: Buyers must be under 35 years old at the time of transfer.
• Tax Dependents: Buyers must not be considered dependents for the purposes of the Personal Income Tax Code in the year of transfer.

3. Partial Exemptions:

• Purchases between €316,772 and €633,453 will benefit from a partial exemption. However, properties valued over €633,453 will not qualify for any exemption.

4. Conditions for Exemption:

• Buyers will lose the exemption if they own property rights at the time of transfer or within the three years prior.
• The property must be intended for permanent residence within six months of acquisition and must remain as such for six years. Any deviation will disqualify the buyer from the exemption.

5. Stamp Duty Exemption:

• A full exemption from Stamp Duty applies to properties valued up to €316,772. For higher-valued properties, the remaining tax amount will be due.

Implementation Date:

• The Decree-Law outlined in the Proposal is expected to come into effect on August 1st.

This new legislation marks a significant step towards making homeownership more accessible for young people in Portugal. We will continue to provide updates and detailed guidance as the implementation date approaches.