The municipal council of Portimão has announced it is reducing local taxes in 2026, delivering an estimated €1.8 million in savings for families and business.
Among the key measures is a cut in the IMI property tax rate for assessed urban buildings, which will fall from 0.38% to 0.37%. Tax relief for primary residences will be “maintained and strengthened”, with increased benefits linked to the number of dependants in each household.
The council will also extend IMI exemptions for a further two years on homes used as permanent residences with a taxable value of up to €125,000.
With the new measures, residents will benefit from a lower municipal surcharge on income tax (IRS), set at 3.5%, increasing the amount of tax returned to taxpayers. This reduction will be reflected in 2027 tax returns.
For businesses, Portimão will grant a full exemption from the Derrama corporate tax to companies based in the municipality with an annual turnover of up to €150,000 covering the majority of local businesses. Larger companies will pay a 0.9% Derrama rate.
The municipality says the package is aimed at supporting families, strengthening local businesses and encouraging economic growth, while maintaining financial stability and continued public investment.
The measures come after years of hardship and tight financial management in Portimão, which met its legal debt limits in 2023 and formally exited its Plano de Ajustamento Municipal (Municipal Adjustment Plan) in October 2024, regaining full financial autonomy.
According to the council, this new financial position allows for a more favourable local tax policy, without compromising Portimão’s “budgetary responsibility”.
