Portugal Property Taxes and Closing Costs for Canadians
← Guide to Portugal for Canadians · Part of our 8-step guide to moving to Portugal from Canada
Before you fall in love with a home in Portugal, it pays to know exactly what you will owe on top of the price. For Canadians, the total usually lands between 9% and 11% of the purchase price in one-time costs, plus a small yearly property tax. This guide breaks down Portugal property taxes and closing costs for Canadians, explains the recent change to IMT for non-residents, and covers what you report back home to the CRA.
New to the process? Start with our 8-step guide to moving to Portugal from Canada, then come back here to budget.
Quick Answer: What Does It Cost to Buy Property in Portugal?
A Canadian who is not yet a Portuguese tax resident should budget roughly:
- IMT (property transfer tax): a flat 7.5% of the price for non-residents buying residential property
- Stamp duty (Imposto do Selo): 0.8% of the price
- Notary and land registry: usually €1,000 to €2,500 combined
- Lawyer: commonly about 1% of the price plus 23% VAT, often with a minimum fee
- Mortgage costs (if you finance): 0.6% stamp duty on the loan amount, plus bank and valuation fees
IMT: The Property Transfer Tax
IMT (Imposto Municipal sobre as Transmissões Onerosas de Imóveis) is the biggest one-time cost, and the buyer pays it before the deed is signed.
The flat 7.5% IMT for non-residents
Under Decree-Law 97/2026, buyers who are not Portuguese tax residents now pay a flat 7.5% IMT on urban residential property, whatever the price. The rule is based on tax residency, not nationality, so a Canadian who already lives in Portugal and is a tax resident there still uses the regular progressive rates.
Non-residents can claim back the difference between 7.5% and the regular rate if they later meet one of these conditions:
- You become a Portuguese tax resident within two years of buying, or
- You rent the home long term at a moderate rent (capped at 2.5 times the national minimum wage per month), with a lease signed within six months and kept in place for at least 36 months in the first five years.
The refund must be requested from the Tax Authority after you qualify, so keep your lawyer involved after closing.
IMT for Portuguese tax residents
If you are already a tax resident, IMT follows a progressive scale. Lower-priced primary homes can be fully exempt, and rates climb to 6% and then 7.5% at the top end. Second homes pay slightly more than primary residences at the same price.
Example: a €400,000 apartment
| Cost | Non-resident buyer |
|---|---|
| IMT at 7.5% | €30,000 |
| Stamp duty at 0.8% | €3,200 |
| Notary and registry (estimate) | €1,500 |
| Lawyer, 1% plus VAT (estimate) | €4,920 |
| Total | about €39,600 (9.9%) |
Stamp Duty (Imposto do Selo)
Stamp duty is 0.8% of the purchase price, paid at the same time as IMT. If you take a Portuguese mortgage, a separate stamp duty of 0.6% applies to the loan amount for terms of five years or more. Read more in Can Canadians Get a Mortgage in Portugal?
Notary, Land Registry and Legal Fees
The deed (escritura) is signed before a notary or at a Casa Pronta office, and the sale is recorded at the land registry. Together these usually cost €1,000 to €2,500. Most Canadians also hire an independent Portuguese lawyer to run due diligence, check for debts on the property, and represent them by power of attorney if they cannot attend. Learn how the full process works in Step 4: The Legal Process of Buying Property in Portugal.
Yearly Property Taxes: IMI and AIMI
IMI (municipal property tax)
Once you own the home, you pay IMI every year. Urban property is taxed at 0.3% to 0.45% of its tax value (VPT), set by each municipality. The VPT is usually well below the market price, so the real bill is often modest. Properties owned through companies in blacklisted tax havens pay much higher rates, so avoid offshore structures.
AIMI (additional property tax)
AIMI only applies to individuals whose combined residential tax values in Portugal exceed €600,000. Most Canadian buyers of a single home never pay it.
Taxes If You Rent Out Your Portugal Property
Non-residents pay Portuguese tax on net rental income, generally at a flat 25%, after allowable expenses such as IMI, condo fees and maintenance. Short-term rentals also need a local licence (Alojamento Local), which some areas now restrict. See Step 6: Investing and Renting Out Property in Portugal.
Capital Gains When You Sell
When a non-resident sells, Portugal taxes the gain (not the full price). Non-residents have historically paid 28% on the gain, but can often elect to be taxed like residents, on 50% of the gain at progressive rates. Your advisor can model which is better. Our sellers guide covers the process.
What Canadians Report to the CRA
Canadian tax residents are taxed on worldwide income, so Portugal is only half the picture:
- Rental income and capital gains from your Portugal property are reported on your Canadian return. The Canada–Portugal tax treaty and foreign tax credits help prevent double taxation.
- Form T1135: if the total cost of your specified foreign property is over CAD $100,000 at any time in the year, you must file it. A home used only personally is generally excluded, but a rental property counts.
- Currency: gains are calculated in Canadian dollars, so exchange rate movements affect your taxable gain.
Fiscal Representative and NIF
You need a Portuguese tax number (NIF) before you can buy, and non-EU non-residents must either appoint a fiscal representative or sign up for electronic notifications on the Finanças portal. Here is how Canadians get a NIF.
FAQs: Portugal Property Taxes for Canadians
How much are closing costs in Portugal for non-residents?
For non-residents, closing costs usually total about 9% to 11% of the price: 7.5% IMT, 0.8% stamp duty, roughly €1,000 to €2,500 for notary and registry, and legal fees.
Do Canadians pay more IMT than Portuguese residents?
Yes, if they are not Portuguese tax residents. Non-residents now pay a flat 7.5% IMT on residential property, while residents use a lower progressive scale. You can claim back the difference if you become a tax resident within two years or rent the home long term at a moderate rent.
How much is annual property tax in Portugal?
IMI is 0.3% to 0.45% of the property’s tax value (VPT) each year, depending on the municipality. The tax value is usually lower than the market price.
Do I have to report my Portugal property to the CRA?
If the property is rented out or held as an investment and your total foreign property cost is over CAD $100,000, you must file Form T1135. Rental income and capital gains are also reported on your Canadian return.
Is there a tax treaty between Canada and Portugal?
Yes. The Canada–Portugal tax treaty and foreign tax credits help ensure you are not taxed twice on the same rental income or capital gain.
Talk to a Portugal Property Specialist
Every purchase is different, and Portugal’s tax rules change often. If you are a Canadian thinking about buying in Portugal, get in touch with Annamarie for a no-pressure conversation, or tell us what you are looking for on our Help Me Find a Property page.
This article is general information, not tax or legal advice. Confirm the numbers for your situation with a Portuguese lawyer and a Canadian tax professional.
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