Financing Property Portugal — How It Works

Where Spain and Portugal follow similar financing logic

In both countries, banks apply a lower maximum loan-to-value to non-residents than to residents (see LTV para no residentes for Spain) — but the exact percentages and assessment criteria differ between the two markets and between individual banks. Anyone weighing up both markets should not mistake these structural parallels for identical conditions — each market calls for its own, current assessment.

Stamp duty comes on top of the IMT

Portugal charges Imposto do Selo in addition to the IMT, and it applies twice over in a financed purchase: once on the transfer itself and once on the mortgage deed, calculated on the loan amount. Neither is included in the IMT tables, and neither is financed by the lender. Budgeting from the IMT alone therefore understates the cash required at completion. A further point catches buyers out: both are due before or at the deed, not afterwards, and the notary will not proceed without evidence of payment. Portugal's purchase costs are lower than Spain's overall, but the sequence in which they fall due is tighter.

AIMI — Portugal's additional tax on higher property values

Alongside the annual IMI, Portugal levies AIMI on the taxable value of property holdings above an allowance. It applies to non-residents expressly, and it is calculated on the combined value of all Portuguese properties held by one person rather than property by property — so two modest flats can bring someone into AIMI although neither reaches the threshold alone. Where spouses own jointly, the allowance can be doubled, but that has to be applied for. The second point: the base is the VPT, the official taxable value, not the purchase price — and the VPT can under certain conditions be reassessed, which is worth checking on an older property before assuming the figure is fixed.

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