Are you under 35? Lucky you! Read why...

If you’re 35 or younger and dreaming of owning your first home in Portugal, there’s good news. The Portuguese government recently introduced a generous tax exemption designed to make it easier for young residents to buy their first property.

What the exemption covers

When you buy a home in Portugal, you normally pay two taxes at the time of purchase:

1. IMT (Imposto Municipal sobre as Transmissões Onerosas de Imóveis) – a property transfer tax based on the purchase price, and

2. Stamp Duty (Imposto do Selo) – a smaller tax applied to the transaction value.

Under the new measure, buyers aged 35 or younger can qualify for a full exemption from both IMT and Stamp Duty if the property price is up to €316,772.For properties priced between €316,772 and €633,453, the exemption applies only to the portion up to the threshold and you pay tax only on the remainder.

Example 1: Property at €350,000

Without exemption: IMT = (350,000 × 8%) − 14,887.44 = €13,112.56Stamp Duty = 350,000 × 0.8% = €2,800Total = €15,912.56

With under-35 exemption: The exemption applies up to €316,772.So, you pay IMT only on €33,228 (350,000 − 316,772).That portion is taxed at 8% → €2,658.24 IMTStamp Duty also applies only above €316,772 → €266Total = ~€2,924

Savings: about €12,988

Example 2: Property at €550,000

Without exemption: IMT = (550,000 × 8%) − 14,887.44 = €29,112.56Stamp Duty = 550,000 × 0.8% = €4,400Total = €33,512.56

With under-35 exemption: IMT and Stamp Duty apply only above €316,772.Taxable portion = €233,228IMT = 233,228 × 8% = €18,658.24Stamp Duty = 233,228 × 0.8% = €1,866Total = ~€20,524

Savings: about €12,988 again (same exempt base amount)

Who qualifies

To be eligible, you must meet the following conditions:

• You are 35 years old or younger on the date of the deed.

• You are a tax resident in Portugal (you have a Portuguese NIF and declare Portugal as your fiscal residence).

• You are buying your first home in Portugal and have not owned a residential property in the country in the past three years.

• The property will be your main and permanent residence, not a second home or investment.

Foreign nationals can benefit too, as long as they are legally residing in Portugal and registered as tax residents.

Additional advantages

In addition to the tax exemption, buyers under 35 may also apply for a state-backed mortgage guarantee covering up to 15% of the loan value for homes priced up to €450,000. This can make financing easier, particularly for those with smaller down payments.

Important to know

The exemption applies to each individual buyer, not to the property itself. If the home stops being your primary residence within six years. For example, if you sell it or move abroad,

the tax authority can revoke the exemption and claim the unpaid taxes retroactively.

Why it matters

With rising housing prices, this measure offers a meaningful incentive for younger residents to enter the property market sooner. For many buyers, it can save tens of thousands of euros on the day they receive their keys.

How to claim the exemption

To apply, you’ll need to:

1. Obtain a Portuguese NIF (tax number) and register as a tax resident.

2. Provide proof that the property will be used as your permanent residence.

3. Submit these documents when your lawyer or notary prepares the deed of purchase.

If you’re under 35 and considering buying your first home in Portugal, make sure to explore this opportunity before you sign. As always, verify your eligibility with your lawyer or tax advisor before completion.

Your Portugal Home helps clients navigate the entire buying process. From finding the right property to ensuring a smooth and compliant transaction.