Many first-time buyers in Portugal are caught off guard by the transaction costs that come on top of the property price. Budgeting only for the purchase price can leave you thousands short on closing day. Here's a comprehensive breakdown of what to expect.
IMT — Property Transfer Tax
IMT (Imposto Municipal sobre as Transmissões Onerosas de Imóveis) is the primary purchase tax in Portugal. It's calculated on a sliding scale based on the purchase price and the type/use of the property. For urban properties used as a primary residence, rates range from 0% (for lower-value properties) up to around 8% for high-value properties. Investment properties and secondary homes face higher rates, with no exemptions at the lower end.
IS — Stamp Duty
Imposto do Selo (IS) is applied at 0.8% on the purchase price and at 0.6% on the mortgage amount. Both are payable at the time of deed signing.
Notary & Land Registry Fees
The escritura (deed signing) must take place before a notary and the property must be registered at the Conservatória. Combined notary and registration costs typically range from €500 to €1,500 depending on the transaction complexity and property value.
Legal Fees
Engaging a Portuguese lawyer (advogado) is strongly recommended, particularly for foreign buyers. Legal fees typically range from 1% to 1.5% of the purchase price, though minimum flat fees often apply for lower-value properties.
Bank & Mortgage Fees
Banks charge for property valuation (typically €200–€400) and may charge a dossier or processing fee. Home insurance (multirisco) and life insurance are usually mandatory conditions of the mortgage.
Rule of Thumb
Budget an additional 6–9% of the purchase price for transaction costs. On a €350,000 property, that means having €21,000–€31,500 in cash set aside beyond your down payment.
Being prepared for these costs means no surprises — and a smoother, more confident path to ownership in Portugal.