Property: Expat finances news in Portugal

Chega party leader André Ventura announced an emergency legislative package for housing that proposes a 50% increase in personal income tax (Imposto sobre o Rendimento das Pessoas Singulares or IRS) deductions for rent and mortgage payments. Ventura also called for reviewing tax benefits given to foreign buyers with high purchasing power and reassessing municipal property tax (Imposto Municipal sobre Imóveis or IMI). The party leader stated that running a temporary budget deficit is an acceptable risk to help families cope with shelter costs.

A new government ordinance established maximum rent ceilings under the Simplified Affordable Rental Regime (Regime Simplificado do Arrendamento Acessível). The program grants landlords complete tax exemptions on rental income in exchange for charging below-market rates calculated by the National Statistics Institute (Instituto Nacional de Estatística or INE). The updated framework also removes income eligibility checks for tenants and defines minimum lease contract durations.

Tenants will be able to deduct up to €1,000 in housing rent from their personal income tax (Imposto sobre o Rendimento de Pessoas Singulares or IRS) in 2027, up from the current €900 limit. The government proposal maintains tax exemptions on workplace productivity bonuses up to 6% of annual base pay for companies raising salaries by 4.5%. The draft budget also updates the threshold for the high-earner solidarity surcharge (taxa de solidariedade), linking it to the ninth tax bracket.

Update: Budget Expands IRS Relief and Cuts Corporate Tax Rate

Finance Minister Joaquim Miranda Sarmento detailed additional tax measures in the draft budget, proposing a 3.88% update to IRS brackets and rate cuts across the first six brackets. The proposal also reduces the corporate income tax (Imposto sobre o Rendimento das Pessoas Coletivas or IRC) rate by one percentage point, raises the annual subsistence threshold to €13,580, and provides a €50 monthly pension increase.

Euribor rates for three, six, and 12 months increased today, with the 12-month rate reaching a two-year high. The rise is expected to significantly increase monthly repayments for homeowners with variable-rate mortgages, with some estimates suggesting an increase of up to 118 euros on a 250,000-euro loan.

The legal deadline for paying personal income tax (Imposto sobre o Rendimento das Pessoas Singulares or IRS) and the second installment of the municipal property tax (Imposto Municipal sobre Imóveis or IMI) ends this Monday. The Tax and Customs Authority (Autoridade Tributária or AT) allows for installment payments on amounts up to 5,000 euros without requiring a guarantee.

Homeowners with variable-rate mortgage contracts scheduled for re-evaluation in September will see their monthly repayments rise. This adjustment reflects the ongoing impact of interest rate fluctuations on housing loans in Portugal.

Housing costs are expected to increase next year, with rents projected to rise by 2.5%. Homeowners with mortgage loans tied to six-month rates will also face higher monthly payments, with an average increase of 42 euros.

The Tax and Customs Authority (Autoridade Tributária e Aduaneira or AT) has issued a binding ruling stating that taxpayers who use their primary residence as a workplace may lose eligibility for capital gains tax exemptions. This applies even if the proceeds from a home sale are reinvested into the purchase of another primary and permanent residence.

Starting August 1, the Bank of Portugal (Banco de Portugal or BdP) will implement new macroprudential rules for mortgage and consumer credit. The central bank is lowering the maximum debt-to-income ratio from 50% to 45% to mitigate financial risks for households. Additionally, the new regulations simplify loan duration requirements based on borrower age and prohibit credit intermediaries from accepting funds directly from consumers.

Despite signs that Euribor rates have peaked and are stabilizing, mortgage holders in Portugal will face higher monthly repayments for contracts reviewed in July. While the pace of rate increases slowed in June, the impact remains a financial concern for many families.

The Tax Authority (Autoridade Tributária e Aduaneira or AT) has clarified that homeowners who rent out their primary residence before selling it may lose their exemption from personal income tax (Imposto sobre o Rendimento das Pessoas Singulares or IRS) on capital gains. Even if the property remains the owner's registered tax address, the act of placing it on the rental market can disqualify the tax benefit.

International investors are increasingly looking toward Portugal as a stable destination for luxury real estate amid ongoing conflicts in the Middle East. Agencies report a rise in inquiries for move-in-ready properties and medium-term rentals as families re-evaluate their relocation plans.

The BdP has reduced the maximum debt-to-income ratio (DSTI) for home loans from 50% to 45% to curb high-risk lending. Industry analysts estimate this change could lead to the rejection of 10% to 15% of mortgage applications that would have previously been approved. The government has introduced a public guarantee (Garantia Pública) to help mitigate these impacts for younger buyers.

Homeowners with variable-rate mortgages in Portugal will see monthly payments increase by up to 60 euros starting in June. The rise reflects ongoing adjustments in interest rate benchmarks affecting housing credit costs.

Housing loan contracts reviewed in June will see their largest payment increases since December 2023, with some monthly costs rising by up to 70 euros. Analysts attribute this pressure on household budgets to indirect economic effects stemming from the ongoing conflict in Iran.

Property owners in Portugal have one week remaining to pay the first installment of the Municipal Property Tax (Imposto Municipal sobre Imóveis or IMI). Taxpayers are encouraged to check their notices via mail or through the official tax portal to ensure compliance before the deadline at the end of May.

The government has implemented a new tax package for housing, including a reduction in the value-added tax (Imposto sobre o Valor Acrescentado or IVA) on construction from 23% to 6% and a decrease in the personal income tax (Imposto sobre o Rendimento das Pessoas Singulares or IRS) on rental income to 10%. These measures, which aim to increase housing supply and support tenants, apply retroactively to the beginning of the year. Additionally, the annual deduction limit for rent paid under the IRS has increased from 700 to 900 euros.

The Bank of Portugal is consulting with financial institutions on a proposal to reduce the maximum debt-to-income ratio for new home loans from 50% to 45%. This macroprudential measure aims to curb excessive household debt and ensure long-term financial stability in the housing market.

Property owners are reminded that the Municipal Property Tax (Imposto Municipal sobre Imóveis or IMI) is due for payment throughout May. Unlike in previous years, the tax authority will not send physical payment notices by post, though the payment deadlines remain unchanged.

The Bank of Portugal (Banco de Portugal or BdP) is advising customers to contact their banks if they face difficulties resuming home loan payments. The moratorium, which allowed for a temporary suspension of payments for families affected by severe weather, officially ends on April 28.

Homeowners with variable-rate mortgages will see monthly payments increase by up to 18 euros this month as Euribor rates react to geopolitical tensions. Data from the National Statistics Institute (Instituto Nacional de Estatística or INE) shows inflation rose to 2.7% in March, largely driven by higher fuel costs. These market shifts are affecting both existing contracts and new loans, including those with mixed-rate options.

A new analysis indicates that Portugal is among the Eurozone countries most affected by European Central Bank (Banco Central Europeu) interest rate increases. Because a high proportion of Portuguese mortgages (crédito habitação) have variable rates, rising costs lead to a sharper contraction in household spending compared to other European nations. Economists also warn that the national economy is showing signs of slowing down due to broader European trends and geopolitical tensions. Those with variable-rate mortgages should monitor ECB policy shifts closely for impacts on their monthly budgets.

The Tax and Customs Authority (Autoridade Tributária e Aduaneira) has clarified that the capital gains tax (mais-valias) exemption for reinvesting in a primary residence is limited when a property owned by one person is sold to buy a home jointly. In such cases, the tax benefit only applies to the share of the new property corresponding to the original owner, typically 50%. Homeowners planning to sell a property they purchased while single to buy a new home with a partner should be aware of these potential tax liabilities.

Euribor movements were mixed on Thursday: the three‑month rate rose, the six‑month rate fell (to about 2.137%) and the 12‑month rate stayed unchanged, ECO reports. Separately, RTP says the average mortgage interest rate for new loans fell to 3.111% in January. Homeowners with variable or recently indexed mortgages should check which Euribor term their loan follows, since short‑term swings can change monthly payments.