Portugal’s government delivered its 2027 budget to Parliament on 8 October, and the housing chapter holds the line rather than breaking new ground. Property transfer tax bands move up with inflation, the exemption for young buyers moves up with them, and VAT on construction drops from 23% to 6%. For an agent advising a foreign buyer, it is the small print that changes a client’s bill.
This document is a proposal, not a law. It is the government’s 2027 budget bill, delivered by the finance minister, Joaquim Miranda Sarmento, and it now goes through parliamentary appraisal, with the final global vote set for 24 November. Everything below is what the proposal before the Assembly of the Republic says, and what it would change for a buyer, an owner or a landlord if it passes as written.
What the New IMT Brackets Mean for a Buyer
IMT is Portugal’s property tax on a home purchase, formally the municipal transfer tax on onerous transfers of property. It is the largest transaction cost after the price itself, and it is banded: the rate steps up as the value rises, so a small move in a threshold changes what a buyer owes.
Every band rises by 2.3%, the inflation estimate the government is using for next year. A permanent home bought for up to 108,792 euros escapes IMT entirely, against 106,346 euros in 2026, which is 2,446 euros of extra headroom. At the other end, the top 7.5% rate starts above 1,177,323 euros, where in 2026 it begins at 1,150,853 euros. ECO published the full tables on the day the document landed. Because the bands are re-based every year, this is an adjustment rather than a reform, but it is the number to quote to anyone completing in 2027.
The Young Buyer Exemption Rises to 338,141
Since 2024 Portugal has exempted buyers under 35 from IMT, Imposto do Selo and most fees on a first permanent home, and the proposal keeps that relief for another year. Because the exemption is pinned to the fourth IMT band, it grows with the brackets: the ceiling rises to 338,141 euros from 330,539 euros, a gain of 7,602 euros.
A government report says the scheme has already helped nearly 120,000 young people, at an average purchase price of 200,000 euros. One caveat sits beside it. A public guarantee that lets a young buyer borrow the full price is written into the budget, but the finance minister said at the press conference that no formal decision had been taken on continuing it, so agents should treat that one as likely rather than certain. Idealista’s guide to the housing measures sets out the rest of the chapter.
Construction VAT Falls From 23% to 6% in 2027
Most expensive of all in the housing chapter is a cut in VAT on construction, from 23% to 6%. It is framed as a supply measure, aimed at a building sector the government says is still marked by the crisis of 2008 to 2014, and it is expected to give up 94 million euros of revenue in 2027. If the lower rate reaches new-build prices, it matters far more to a buyer than the shift in the IMT bands.
Elsewhere the package is smaller. A lower rate of income tax for landlords who keep rents at or below 2,300 euros a month, a rule already written into law in December 2025 and carried forward here, accounts for 209 million euros of the total. Taken together, the housing tax measures cost 303 million euros in 2027, against the 2,003 million euros the budget sets aside for building and renovating affordable homes, as the government’s own budget site records.
What a Buyer Pays in Portugal in 2026 and 2027
Line up the costs of a Portuguese purchase and only one of them moves with this budget:
- IMT, the transfer tax, banded by price
- Imposto do Selo, charged at 0.8% of the price
- Notary and land registry fees, set by tariff
- VAT on a new build, which the buyer carries in the price
- Annual IMI, the municipal property tax, paid by the owner
Below, the thresholds that change sit against the ones that stay put:
| Threshold | 2026 | 2027, proposed |
|---|---|---|
| IMT-exempt ceiling, permanent home | 106,346 euros | 108,792 euros |
| Where the 7.5% IMT rate starts | 1,150,853 euros | 1,177,323 euros |
| Young buyer exemption ceiling | 330,539 euros | 338,141 euros |
| VAT on construction | 23% | 6% |
Against property prices that have climbed for three years, the tax movement is modest. In cash terms the bands shift by thousands of euros, not tens of thousands, and the Imposto do Selo and the notary’s bill are untouched. A client comparing two homes will feel the difference in the asking price long before the difference in the tax.
What Agents Should Tell Clients This Week
Nothing here is law yet, and none of it applies to a deal that completes before 1 January. That is the first thing to say, because a buyer who hears “tax cut” may wait for a saving that will not arrive.
Five things are worth putting in front of a client now:
- Quote the 2027 IMT bands only for completions next year, and the 2026 ones for anything signed before then
- Check the buyer’s age and first-home status, because the young buyer relief is worth far more than the bracket shift
- For a new build, ask the developer whether the 6% VAT rate is passed through in the price
- For foreign buyers, budget the Imposto do Selo and the notary, which this budget does not touch
- Watch the 24 November vote, since the public guarantee for young buyers is still open
What the 2027 Budget Means for Portugal Property
Read as a whole, the housing chapter is continuity with a nudge at the edges: the bands shift, the young buyer ceiling shifts, and the VAT cut is the one measure that could change a new-build price in a way a client will feel. Nothing here rewrites how Portugal taxes a purchase, and for that reason the numbers an agent already knows stay useful.
Everything now rests on the vote of 24 November, where the proposal becomes law, or does not. Until then, the honest answer to a client is that the direction is clear and the arithmetic is not final.
Questions Agents Ask About the 2027 Budget
These come up most often once a client sees a 2027 completion date on a reservation contract.
Does the 2027 budget change IMT for foreign buyers?
No, not by nationality. The brackets rise by 2.3% for anyone buying urban housing, whether the home is a permanent residence or not. Non-residents already pay a higher IMT rate under a separate rule approved in 2026, and this budget leaves that rule alone.
When do the new IMT bands take effect?
They are written for the 2027 tax year, so a purchase completed in 2027 is taxed on the new table. A deed signed in 2026 keeps this year’s bands. Its final vote is set for 24 November, and none of it applies before then.
How much does the young buyer exemption save?
For a first permanent home bought by someone under 35, the relief covers IMT, Imposto do Selo and most fees up to 338,141 euros. The saving is the whole IMT bill plus the stamp duty on a home at that price, which is why the ceiling is worth more to a client than the movement in the bands.
Will the public guarantee for young buyers continue?
Probably, but it is not settled. It lets a buyer under 35 borrow the full price, it is written into the proposal, and yet the finance minister said no formal decision had been taken. Treat it as a measure to confirm before a client relies on it.
Does the budget change tax on rental income?
It carries forward the lower rate for landlords who keep rents moderate, at up to 2,300 euros a month, a rule already in law since December 2025. This budget does not reopen the wider rental law, which the government says it will negotiate separately.
