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Decree Law No. 287/2003

Publication: Republic Diary No. 262/2003, Series I of 2003-11-12
  • Issuer: Ministry of Finance
  • Diploma Type: Decree Law
  • Number: 287/2003
  • Pages: 7568 - 7647

Summary in plain english

What is it?

This decree-law creates the municipal taxes on properties and on the real estate transfer.

Municipal Property Tax (IMI) Effect

The IMI is applied to the taxable patrimonial value (VPT) of rustic and urban buildings, located within the Portuguese territory.

The taxable patrimonial value (VPT) is the value of the building for tax payment purposes. It is determined by the Tax and Customs Authority (AT). It is calculated through an assessment, based on the type of building and market value.

Building - the entire portion of land, permanent, including the waters, plantations and buildings, which belong to individuals or entities and have economic value.

Rustic building - the land outside of the urban centres, which is not aimed for construction, used for the agricultural activity.

Urban building - a building which may not be considered rustic (for instance: houses for housing purposes, for commercial purposes; land for construction).

Mixed building - a building with a rustic and urban part (to an equal extent).

Who must pay the tax?

The building’s owner.

As the building’s owner is deemed the individual who owns the property or land on 31 December of the year of the tax.

The IMI is a direct funding source of the city councils.


From the IMI payments are exempt, namely:

    • The State, autonomous regions, local autarchies and public institutes;
    • The families with a low annual income (up to 15.295€) and which VPT is not higher than 66.500€;
    • The individuals who purchase a property for permanent owner-occupied housing. This exemption is valid for a maximum of three years. In such cases, the VPT cannot be higher than 125.000€ and the family’s annual income must be lower than 153.000€.
How is the tax calculated?

The building’s VPT is multiplied by the tax, to obtain the tax to be paid.

The tax is annually determined by the municipality in which the building is located, within the following values:

    • Urban buildings - between 0.3% and 0.45% (triple if the buildings have vacant for more than a year);
    • Rustic buildings - 0.8%.
How is it paid?

It is paid after the submission, by AT, of the collection document to the taxable entity.

It may be paid in one go or in instalments, according to the value:

    • Paid in one go, in May, if the amount is lower than 100 euros;
    • Paid in two instalments, May and November, if the value is between 100 and 500 euros;
    • Paid in three instalments, May, August and November, if the value is equal or higher than 500 euros.

If the payment is carried out outside the legal term, the owner will be subject to default interest and fines.

Real Estate Transfer Tax (IMT) Effect

It is the tax paid to the State whenever the ownership of a property is transferred, through a negotiation which implies expenses (for instance: purchase and sale), within the Portuguese territory. Namely:

    • Purchase and sale of a residence, either new or used;
    • House swapping;
    • Transfer of the purchaser’s contractual position;
    • Concession for the property’s use;
    • Assignment of the rights on the house, by its owner, to third parties.

Such transfer may also be subject to the Stamp Duty.

The obligation to pay the tax occurs on the moment of the property’s transfer.


Some situations are exempt from the IMT. Namely:

    • Acquisition of buildings for resale by real estate companies;
    • Acquisition of urban buildings aimed for urbanistic rehabilitation;
    • Acquisition of buildings or autonomous fractions aimed for the installation of qualified touristic utility enterprises;
    • Acquisition of real estate by Real Estate Investment Funds for Rental Housing;
    • Acquisition of buildings classified with public interest;

From the IMT are also exempt the State, autonomous regions, local autarchies and public institutes and the private social solidarity institutions, for instance.

How is the tax calculated?

The IMT is applied to the VPT or to the value stated upon the property’s registry. From these two, the greatest value is chosen. On the IMT’s calculation is considered:

    • The type of house (urban or rustic);
    • The location (mainland or autonomous regions);
    • The purpose (main or secondary residence).

The finances services promote the tax’s settlement and the taxable subjects must submit, at any finances service or electronically, the filled-in statement.

The IMT’s settlement is carried out by the AT services, based on the statement submitted by the taxable entity.

The settlement occurs immediately before the transfer of the asset.

How is it paid?

As a rule, the IMT must be paid on the date of its settlement or on the first following business day.

It is paid at the finances’ treasury, through the collection document.

What advantages does it bring?

This decree-law:

    • Increases the fight against fraud and tax evasion;
    • Reinforces the municipalities’ tax powers.
When does it enter into force?

The Property Tax Code entered into force on 1 december 2003.

The Real Estate Transfer Code entered into force on 1 january 2004.

Original Version


  • Legal translator is the translation of texts within the field of law


Legislative consolidation integrates the various amendments and rectifications made into an original legal diploma in order to make its consultation more accessible to the citizen.