Portugal’s booming property market is paying off for town halls across the country. From January to August, revenue from the Municipal Property Transfer Tax – known as IMT – jumped by €320 million compared with the same period in 2024, reaching a total of €1.43 billion, according to figures from Portugal’s Budget Authority (Entidade Orçamental). That’s a 28.8% increase in just one year, driven by rising property prices and sales.
The IMT has now become the single biggest local tax, accounting for 52.5% of all municipal tax income up to August.
In total, municipalities collected over €2.72 billion in tax revenue during the first eight months of 2025, with the IMT alone representing more than half of it. Other local taxes, such as the Municipal Property Tax (IMI), the Vehicle Tax (IUC) and the local corporate surcharge, made up the rest.
The Budget Authority said the rise in IMT reflects “the strong momentum in Portugal’s real estate market, with more transactions and higher property values.”
The IMT surge marks a sharp turnaround from the previous two years. Between January and August, revenue from the tax had fallen 2.9% in 2024 and 1.3% in 2023. The last big rise was in 2022, when collections climbed 38.3%. This year’s growth is smaller but still significant, and welcome news for local budgets.
The IMT applies to property sales across Portugal and is collected by the municipality where the property is located. For main residences, rates are progressive, depending on the purchase price – reaching up to 7.5% for homes worth more than €1.1 million. For other urban properties, the rate is 6.5%, and for rural land, 5%.
Government eyes new rules for foreign buyers
The property sale boom has also caught the government’s attention. In a Council of Ministers meeting last week, the cabinet approved a housing package that includes a proposal to increase IMT rates for non-resident property buyers, excluding Portuguese emigrants.
The measure, which still needs parliamentary approval, aims to temper demand from foreign investors in an overheated housing market.
