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Taxes
Taxes in Portugal when you buy a Second Home in Portugal
If you buy or own Second Home in Portugal, you will have to pay several Portuguese taxes. You are considered to be a non-resident if you do not reside in Portugal for more that 183 days per year. This means that you are not fully taxable in Portugal.
A couple of taxes you will have to pay if you buy a Second Home in Portugal:
- Transfer tax. This tax is 6% of the value of the property in Portugal as stipulated in the final contract of sale.
- Yearly rates
- Income tax of 15% on your Portuguese income, for example from renting out your second home.
- Capital gains tax when you sell your property in Portugal.
As a non-resident you are actually required to appoint a local legal representative who can take care of all communications between you and the Tax Office.
NIF, your fiscal identity number
If you have plans to buy a second home in Portugal you have to apply for a tax card (cartão de contribuinte) and a fiscal identity number (número de indentificação fiscal/NIF) at the local tax office. You will need both documents when you buy your property in Portugal and after you have bought your Second Home in Portugal you will use them in all matters concerning the Tax Office and the Portuguese bank.
