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A complete guide to taxes

What You Need to Know 2026 Meta Description: Guide to Portuguese taxes for expats. Income tax, property tax, tax residency and what the end of NHR means for you.

Important: I am not a tax professional. This is general information only. Your personal situation requires qualified professional advice.

The different taxes

Many people moving to Portugal are worried about the different taxes they may encounter. Understanding the tax system is crucial for financial planning and compliance.

Some common taxes in Portugal include:

  • Income Tax (IRS)
  • Value Added Tax (IVA)
  • Property Tax (IMI)
  • Inheritance and Gift Tax (Imposto de Selo)

Navigating these different taxes can be complex, but we're here to help you understand them better.

See Below

Social Security

Employees

Employer deducts contributions:

  • Employee: 11%

  • Employer: 23.75%

Self-Employed

Self-employed pay approximately 21.4% of declared income.

Reduced rates apply in first year.

Voluntary Contributions

Possible for those without employment income who want to maintain contributions.

Tax returns

Understanding and filing your tax returns correctly is a vital aspect of living in Portugal. Tax returns ensure that you meet your legal obligations and can also help you claim any eligible deductions or benefits.

For guidance on how to fill out your tax return form, you can visit the official Portuguese Tax Authority website at [[website]]. Alternatively, contact us at [[phonenumber]] or [[email]]

Becoming Tax Resident

You become Portuguese tax resident if either:

  1. You spend more than 183 days per year in Portugal

    • Days do not need to be consecutive

    • Counted within calendar year

  2. You have a permanent home in Portugal as of 31 December

    • Even if you spend less than 183 days

    • Intent to occupy as residence matters

Tax residency triggers obligations to declare worldwide income to Portuguese authorities.

Important Disclaimers

  • Tax rules change frequently

  • This information is general guidance only

  • Your personal situation may differ

  • Always seek professional advice

  • Verify current rules before making decisions

Getting Professional Help

When You Need It

  • Before becoming tax resident

  • Complex international income

  • Business income

  • Property transactions

  • Investment portfolios

  • US citizens (always)

Types of Professionals

Contabilista (Accountant):

  • Handles tax filings

  • General tax advice

  • Business accounting

  • Affordable for straightforward situations

Tax Lawyer (Advogado Fiscal):

  • Complex tax planning

  • Disputes with authorities

  • International structures

  • Higher cost, specialist advice

Finding Professionals

I can connect you with accountants experienced in British and American client situations.

Tax Returns

Tax Year

Calendar year (January - December).

Filing Period

April - June for previous year.

Late filing incurs penalties.

How to File

Online through Portal das Finanças:

  • Need NIF and access credentials

  • Can authorise accountant to file

  • Most information pre-populated

Who Must File

All tax residents with income above thresholds.

Even with no tax to pay, filing may be required.

Income Tax (IRS)

Portuguese income tax (Imposto sobre o Rendimento das Pessoas Singulares) is progressive.

Taxable Income Rate
Up to €7,703 13.25%
€7,703 - €11,623 18%
€11,623 - €16,472 23%
€16,472 - €21,321 26%
€21,321 - €27,146 32.75%
€27,146 - €39,791 37%
€39,791 - €51,997 43.5%
€51,997 - €81,199 45%
Over €81,199 48%

Additional solidarity surcharges apply to very high incomes.

What Is Taxed

As a Portuguese tax resident:

  • Portuguese source income

  • Worldwide income (foreign pensions, investments, rental income, etc.)

Double taxation agreements may provide relief.

Property Taxes

IMI (Imposto Municipal sobre Imóveis)

Annual tax on property ownership.

Rates:

  • Urban properties: 0.3% - 0.45% of taxable value

  • Rural properties: 0.8% of taxable value

Rates vary by municipality. Taxable value (VPT) is often lower than market value.

Payment:

  • Usually April/May

  • Can be split into instalments for higher amounts

  • Paid to local tax office or via Portal das Finanças

AIMI (Adicional ao IMI)

Additional property tax for higher-value portfolios.

Applies when:

  • Individual property value exceeds €600,000

  • Or combined property values exceed €600,000

Rates:

  • €600,000 - €1,000,000: 0.7%

  • Over €1,000,000: 1%

  • Corporate-owned residential: 0.4%

    •  

IMT (Imposto Municipal sobre Transmissões)

Transfer tax paid when purchasing property.

Rates (2026 - residential, permanent residence):

Property Value Rate
Up to €101,917 0%
€101,917 - €139,412 2%
€139,412 - €190,086 5%
€190,086 - €316,772 7%
€316,772 - €633,453 8%
Over €633,453 6% (flat)

Second homes and non-permanent residences have different rates.

Stamp Duty

0.8% of purchase price, paid alongside IMT.

 

Capital Gains Tax

Property

Property capital gains are taxed at 50% of the gain, added to your income and taxed at progressive rates.

Primary Residence Exemption: Gains may be exempt if:

  • Property was your permanent residence

  • Proceeds are reinvested in another permanent residence

  • Within specific timeframes

Investments

Shares, investments and other assets:

  • 28% flat rate on gains

  • Or can elect to include in income (if lower rate applies)

Cryptocurrency

Gains from cryptocurrency held less than 1 year:

  • Taxed as income at progressive rates

Gains from cryptocurrency held over 1 year:

  • Currently exempt (verify current rules)

 

 

Double Taxation Agreements

Portugal has agreements with most major countries including:

  • United Kingdom

  • United States

  • Canada

  • Australia

  • Most EU countries

How They Work

Agreements prevent paying tax twice on the same income:

  • Tax paid in one country credited against tax owed in other

  • Some income types taxed only in one country

  • Rules vary by income type and agreement

Non-Habitual Resident (NHR) Status

Important 2024/2025/2026 Update

The original NHR programme closed to new applicants in 2024.

If you registered before the deadline:

  • Your benefits continue for the full 10-year period

  • Nothing changes for existing NHR holders

If you are a new arrival:

  • You cannot access the original NHR scheme

  • Standard Portuguese tax rates apply to your worldwide income

Replacement Schemes

A limited replacement incentive exists for:

  • Scientific research

  • Innovation and technology roles

  • Specific qualifying professions

This is much more restricted than the original NHR. Most retirees and general expats do not qualify.

What to Do

Seek professional tax advice for your specific situation:

  • Confirm your NHR status if you applied before deadline

  • Understand transitional rules that may apply

  • Plan tax-efficiently within current rules

 

UK Pensions

UK state pension:

  • Taxable in Portugal under most circumstances

  • UK private pensions: typically taxable in Portugal

US Citizens

US citizens must file US taxes regardless of residence:

  • Foreign Earned Income Exclusion may apply

  • Tax credits for Portuguese taxes paid

  • Complex situation requiring specialist advice