IMT Exemption for Young People: Everything You Need to Know

IMT Exemption for Young People: A Complete Guide

Decree-Law 48-A/2024, effective from August 1, 2024, introduced significant tax relief for young property buyers in Portugal. This legislation allows buyers aged up to 35 to benefit from full or partial exemption on both IMT (Municipal Property Transfer Tax) and Stamp Duty when purchasing their first permanent home.

Eligibility Requirements

• Aged 35 or under at the date of the deed
• Tax resident in Portugal
• Must not be registered as a dependent for IRS (income tax) purposes
• Must not have owned any property in Portugal in the past 3 years
• The property must be used as a primary and permanent residence

Exemption Thresholds

The exemption applies on a tiered basis depending on the property value:

• Full exemption: Properties valued up to €316,772 benefit from complete exemption on both IMT and Stamp Duty.
• Partial exemption: For properties valued between €316,772 and €663,453, a partial exemption applies. The buyer pays IMT and Stamp Duty only on the amount exceeding the full exemption threshold.
• No exemption: Properties valued above €663,453 do not qualify for any exemption under this program.

Obligations After Purchase

To maintain the exemption, buyers must:

• Use the property as their primary and permanent residence for a minimum of 6 years from the date of purchase.
• If the property is sold or ceases to be the primary residence within this 6-year period, the buyer must repay the exempted tax amounts.

How to Apply

The exemption is applied automatically through the Portuguese tax portal (Portal das Financas) when generating the IMT payment document. The system verifies the buyer's eligibility based on their tax records. No separate application is required, but you must ensure your tax situation is up to date.

Frequently Asked Questions

Does inherited or donated property disqualify eligibility?

Yes. Ownership of any dwelling within the three years prior to the purchase disqualifies the applicant, regardless of how the property was acquired. Once three years have passed since ceasing ownership, eligibility is restored.

Must the exemption be repaid if the property ceases to be the primary residence?

Potentially yes. If the eligibility conditions are not maintained for 6 years, the State may require repayment of the exempted amount, unless the situation falls under the listed exceptions.

Note on Stamp Duty

Two Stamp Duty taxes apply to property purchases. The exemption only covers the purchase-related Stamp Duty. When the property is financed through a mortgage, the Stamp Duty on the financing remains payable.

Use our mortgage simulator to calculate your monthly payments and discover the best interest rates available. The Portuguese government has also introduced a measure for 100% financing for young buyers.