IMT and IS Exemption - Young people up to the age of 35

In brief

Decree-Law 48-A/2024, of July 25, 2024, published in the Official Gazette, approves exemption from the Real Estate Property Tax (IMT) and Stamp Duty (IS) for the purchase of primary residences by young people up to 35 years old.

This Decree-Law comes into force on August 1, 2024.

In detail

The first purchase of an urban building or an autonomous fraction of an urban building intended exclusively for own and permanent habitation is exempt from IMT and IS, provided that it is the first purchase of a property for this purpose up to 316,272 euros, by taxable persons up to 35 years of age who are not considered dependents for Personal Income Tax purposes in the year of the transaction.

For properties whose taxable value is higher than 316,772.00 Euros and up to 633,453.00 Euros, a marginal IMT rate of 8% applies. Regarding IS, a deduction is applied, limited to the application of 0.8% to the upper limit of the first IMT bracket (316,772.00 Euros).

It should be noted that, in the case of a property becoming jointly owned by a couple, the conditions for the exemption will be verified individually and equally for each spouse, with each required to submit the IMT return (Form 1).

However, taxpayers who own, or have partial ownership rights over, a residential urban property at the time of the transaction or at any time in the previous three years are excluded from this exemption.

This exemption ceases to apply in the following situations:

• If the property is used for a different purpose than the one for which the benefit was granted within 6 years from the date of acquisition, except in certain cases (e.g., sale, change in household composition, or change in workplace);

• If the property is not used as a primary residence within 6 months from the date of acquisition;

• If the acquiring taxpayer is considered a dependent for Personal Income Tax purposes at any time within 6 years from the date of acquisition.

^{© 2024 PwC. This communication is of an informative nature and intended for general purposes only. It does not address any particular person or entity nor does it relate to any specific situation or circumstance. PricewaterhouseCoopers Tax Services TLS, Lda. We will not accept any responsibility arising from reliance on information hereby transmitted, which is not intended to be a substitute for specific professional business advice.}