IMI tax on some houses in Portugal will increase by 3 percent in 2027: Not every homeowner is covered

The new valuation update affecting the property tax IMI in Portugal will cause some real estate owners to pay higher taxes in 2027. In 2026, there will be a 3% increase in the taxation value of residences subject to a three-year automatic update, and a 4% increase in the taxation value of real estate for commercial, service and industrial purposes. However, the change does not mean that the IMI tax on all homes will increase at the same rate.

What is changing in IMI tax?

In Portugal, Imposto Municipal sobre Imóveis (IMI) is a municipal tax calculated on the taxable value of real estate.

This value is called Valor Patrimonial Tributário (VPT).

The tax administration automatically updates the VPT amounts of certain real estate every three years.

In 2026, a 3% value increase will be applied to the houses that enter this update.

The update rate for commercial, service and industrial properties is 4%.

Which homeowners will be affected?

The main condition for the new increase is that the property be subject to an automatic three-year VPT update in 2026.

Especially properties whose last automatic update was made in 2023 are evaluated in this context.

Therefore, not all homeowners in Portugal will be affected by this change at the same time.

The last valuation date of the real estate and its status in tax records are decisive.

How much can taxes increase?

For example, if nothing changes except the VPT update and the current annual IMI tax is 500 euros, 3% As a result of the increase in value, the payment may increase to approximately 515 euros.

This means an additional tax of 15 euros per year.

However, this example assumes that the municipality's tax rate remains the same and there are no exemptions or rebates changes.

The actual amount may vary depending on the characteristics of the real estate and the IMI rate applied by the municipality to which it is affiliated.

Has the council tax rate also increased?

No. Increasing the VPT by 3% is not the same as the municipality increasing the IMI rate.

VPT is the real estate value used in calculating the tax.

The IMI rate determined by the municipality is the tax percentage applied to this value.

Therefore, even if a municipality does not change the IMI rate, the tax payable may increase when the VPT increases.

Conversely, changes to the municipal rate or exemptions may also affect the final tax.

Why is the tax payable in 2027 based on 2026 values?

In IMI tax, there is a time difference between the taxation year and the year in which the payment is made.

IMI, which is calculated based on real estate values ​​and conditions for 2026, is generally collected in 2027.

Therefore, the payment impact of the VPT update in 2026 occurs in 2027.

This distinction is important in understanding which year the tax belongs to.

Will tenants be affected too?

IMI is essentially the tax liability of the owner of the property.

Being a tenant of a house does not automatically make the tenant an IMI taxpayer.

With this Property owners' tax and other property costs may be an economic consideration in future lease negotiations.

However, the IMI increase does not automatically give the landlord the right to increase the price in the existing lease by the same amount.

Separate legal rules apply for rent increases.

Is there a different application for foreign homeowners?

Foreigners who own real estate in Portugal may also have an IMI obligation.

The basis for calculating the tax is generally the nature of the real estate, VPT value, municipality rate and relevant exemptions.

Mere foreign nationality does not automatically grant exemption from this three-year update.

What should homeowners check?

It may be useful to check the registered VPT value of the property, its last update date and, if any, exemption status through the Portal das Finanças.

Additionally, the IMI rate applied by the municipality for the relevant year should also be taken into account.

The new update should not be interpreted as introducing a new general property tax rate for all residences.