The terms that come up when you buy in Portugal

Each term has a short definition, the article of the Code it comes from, a link to the official text and the date it was checked.

• IMT (municipal property transfer tax)

  IMT is the municipal tax on transfers of ownership of real estate in Portugal made for consideration. The buyer owes it, and it is charged on whichever is higher: the value in the contract or the property's taxable value (VPT). There is no single rate — the table is banded, and it changes with what the property will be used for and where it is.

• IMI (municipal property tax)

  IMI is Portugal's annual tax on the taxable value (VPT) of rural and urban property, and the revenue belongs to the municipality where the property is. It is owed by whoever owns the property on the last day of the year the tax relates to. Each municipal assembly sets its own rate for urban property every year, within the band the IMI Code allows.

• AIMI (additional municipal property tax)

  AIMI is an annual tax on the combined taxable value (VPT) of the urban properties in Portugal that a person or company owns, or holds usufruct or surface rights over. Properties classified as commercial, industrial or services, and those classified as «other», are among the exclusions. A fixed amount is deducted from the taxable base for an individual or for an undivided estate.

• Imposto do Selo (stamp duty on a purchase)

  Stamp duty is charged on the acts, contracts, documents and other events listed in the General Stamp Duty Table (Tabela Geral do Imposto do Selo). Acquiring ownership of real estate for consideration falls under item 1.1 of that table and is charged on the value, in addition to IMT. The rate applied is 0,8 %.

• IMT Jovem (IMT exemption for young buyers)

  «IMT Jovem» is the common name for the IMT exemption on a first purchase of an urban property or unit used exclusively as the buyer's own permanent home, by someone aged up to 35 on the date of transfer. The exemption runs up to the top of the first band of the table for these buyers, which is 330 539 €. Buyers who own a residential urban property on the date of transfer, or owned one in the three years before, are excluded.

• Habitação própria e permanente (own permanent home)

  An own permanent home is the property where the owner and their household habitually live — it is where their tax domicile is registered. The IMT Code does not define the phrase in a provision of its own: it uses it as a condition for the exemption and for the more favourable table, and this first sentence is our reading of that use. The use declared at purchase decides which IMT table applies.

• VPT (valor patrimonial tributário, taxable property value)

  The taxable property value is a property's value for tax purposes, set under the IMI Code. For urban property used for housing, commerce, industry or services it comes from a formula combining a base value for built property, the area and coefficients for use, location, quality and comfort, and age. It is the base for IMI and for AIMI.

• Coeficiente de localização (location coefficient, zoning)

  The location coefficient is one of the factors in the formula for the taxable value of urban property. Setting it takes account of access, nearby social facilities, public transport services and location in areas of high property market value. It is applied by homogeneous zones within each municipality, fixed by the zoning, and the permitted range is set in the IMI Code.

• Prédio urbano (urban property)

  For tax purposes a «prédio» is a piece of land together with the water, plantations, buildings and structures permanently attached to it, belonging to someone's estate and having economic value. Urban properties are all those that should not be classified as rural. They divide into residential, commercial, industrial or services, building land, and «other».

• Prédio rústico (rural property)

  Rural properties are, as a rule, land outside an urban area that should not be classified as building land and whose normal use generates agricultural, forestry or livestock income. Certain land inside an urban area also counts as rural where that is the only use allowed and the use is actually made of it. The classification decides how the taxable value is calculated and which taxation applies.

• Sujeito passivo (the person liable for the tax)

  The «sujeito passivo» is the individual or company liable to pay a tax and to meet the obligations that come with it. For IMT that is, as a rule, the buyer. For IMI it is whoever owns the property on the last day of the year the tax relates to, or the usufructuary or surface-right holder where such rights exist.

• Caderneta predial (property tax record)

  The caderneta predial is the document holding a property's details as recorded in the tax register (matriz predial): one caderneta in the approved form is drawn up and given to the taxpayer for each registered property. It is obtained from the Portal das Finanças. It shows the property's tax position, not its legal position.

• Certidão permanente (online land registry certificate)

  Registration is proved by certificates, valid for a set period and renewable. The certidão permanente makes the content of such a certificate available on a website through an access code. It is valid proof for all legal purposes, on the same terms as the paper certificate.

• Registo predial (land registry)

  The land registry exists to make the legal position of properties public, so that property transactions are secure. Among the facts that must be registered are those that create, recognise, acquire or change ownership. Submitting those facts for registration is, as a rule, mandatory.

• CPCV (contrato-promessa de compra e venda, promissory contract)

  The CPCV is the agreement by which the parties commit to sign the purchase of a property later. Where it concerns a building or unit already built, under construction or to be built, it must be a document signed by the parties, with the signatures witnessed in person and the building licence certified. Money paid by the promissory buyer is presumed to be a deposit («sinal»).

• Escritura pública (public deed)

  A public deed is an authentic document drawn up by a notary that formalises a legal transaction. A contract for the sale of real estate is only valid if made by public deed or by an authenticated private document, unless special legislation provides otherwise. It is the moment ownership passes.

• DPA (documento particular autenticado, authenticated private document)

  An authenticated private document is a document written and signed by the parties whose content is confirmed before a body authorised to authenticate it. For the sale of real estate it is an alternative to a public deed, with the same validity of form. The authentication is only valid if the document and everything filed with it are deposited electronically.

• IMI familiar (IMI deduction for dependants)

  IMI familiar is a fixed deduction from the IMI on the urban property used as the owner's or the household's own permanent home, set by the number of dependants. It exists only in municipalities whose assembly has voted for it. The amount rises with the number of dependants, on the table in the IMI Code.

• Cláusula de salvaguarda (IMI safeguard clause)

  The safeguard clause caps the yearly rise in the IMI charged on urban property, or part of it, used as the owner's own permanent home. Each year's charge cannot exceed the previous year's plus the greater of two amounts: a fixed sum, or one third of the difference between the tax on the taxable value set at the current valuation and the tax that the previous valuation would have produced.