Barbara Queiróz Updated: September 29, 2025
The Portuguese government will increase taxes on house purchases made by non-residents. This is part of a series of measures aimed at boosting the supply of affordable homes in Portugal.
Portugal’s Prime Minister, Luis Montenegro, introduced the plan to raise IMT (Property Purchase Tax) after participating in a cabinet meeting in Lisbon. Other measures were also confirmed that would alleviate pressure on the country’s housing market.
Development Signals Commitment to Address Housing Pressures
While this tax increase for non-residents may be a blow to foreign buyers, on a broader scale, this development for property taxes in Portugal shows the Portuguese government’s commitment to addressing housing problems in the country.
Bárbara Queirós, Managing Director of Goldcrest, mentioned that the primary signal of this new measure is that is it highlights the government’s commitment to addressing housing pressures, a trend that we can see has been mirrored in other mature property markets, including the UK, the Netherlands, Australia, and Singapore, while Spain, Portugal’s neighbor, is also considering implementing similar measures, although they are let to be implemented.
Queirós also mentions that, historically, these policies may “cause short-term recalibration in buyer behaviour” but that following this, there is a “return to stability as international investors adapt to the new framework”.
Benefits to the Broader Real Estate Market
This new revenue stream will provide the Portuguese government with enhanced resources to invest directly in affordable housing initiatives.
This will create a positive cycle that will benefit the broader market, boosting supply, and continue to place Portugal on the map as a top investment hub in the long-term.
As Queirós neatly sums it up, “International buyers who recognize Portugal’s long-term value proposition will adjust their investment approach accordingly”.
The Future of Portugal’s Property Market
Portugal and it’s thriving property market have long attracted foreign residents, thanks to its high quality of life, affordable living costs, mild climate, strong investment returns, and attractive tax incentives.
According to a National Statistics Institute (INE) report in June, non-EU buyers are purchasing homes in Portugal for double the value of domestic buyers.
Alongside the initiative to increase IMT for non-residents, the Portuguese government has already announced that it aims to combat issues of demand outpacing supply by committing to building more homes and providing more affordable rents. The government is also speeding up the process to obtain construction permits and has offered tax incentives for young first-time homebuyers in Portugal.
This development is the latest move to address housing issues in the country, and it is intended to ensure the health and dynamism of Portugal’s property market over a longer-term horizon.
