IMI: Portugal’s municipal property tax (what you pay and how to check)

The essentials

What IMI is and who pays

1. 01
   Annual municipal tax

   It applies to the valor patrimonial tributário (VPT — taxable property value) of rural and urban properties in Portugal. Revenue goes to the municipality where the property sits.

2. 02
   Who is liable

   As a rule, owners, usufructuaries or surface-right holders listed in the property matrix on 31 December of the tax year. If you complete a purchase in November 2026 and are registered by year-end, you are typically the taxpayer for 2026 IMI — paid in 2027.

3. 03
   Not the purchase tax

   IMI is not what you pay at the escritura. That role belongs mainly to IMT and Stamp Duty. IMI follows ownership year after year.

Tax base

VPT is the base: read the caderneta predial

1. 01
   IMI ≈ VPT × municipal rate

   The Tax Authority (AT) calculates the bill from the property’s VPT (or the apartment unit’s VPT). Without a current VPT, any estimate is incomplete.

2. 02
   Where to see the VPT

   It appears on the caderneta predial, available free on the Portal das Finanças (consult property assets). Check parish, matrix article, unit, use and owners.

3. 03
   Caderneta ≠ land-registry certificate

   The caderneta is the fiscal document. The permanent land-registry certificate covers owners, encumbrances and registrations. Cross-check both in your pre-purchase documents.

Rates

Legal bands and your municipality’s rate

1. 01
   Bands in the IMI Code (art. 112)

   • Urban properties: between 0.3% and 0.45% of VPT (in exceptional cases allowed by law, up to 0.5%).
   • Rural properties: 0.8%.
   • Entities tax-resident in listed preferential regimes: 7.5% (this uplift does not apply to properties owned by individuals).
2. 02
   Who sets the yearly rate

   Each municipal assembly sets the rate within those bands and notifies AT. Late or missing notification triggers the legal minimum for urban property. Some councils differentiate by parish or apply uplifts/reductions (vacant buildings, urban-pressure zones, regeneration, etc.) — always check your municipality’s decision.

3. 03
   Family IMI (dependants)

   If the municipality so decides, a fixed deduction may apply to permanent residence: €30 (1 dependant), €70 (2) or €140 (3 or more), under CIMI art. 112-A. AT applies it automatically when the conditions are met.

4. 04
   Do not invent Algarve rates

   Faro, Loulé, Albufeira, Lagos, Portimão, Tavira and the other Faro-district councils publish their own rates every year. Use the official IMI/CA rates by municipality and year tool (select year and Faro district) or the council website — not outdated secondary tables.

Payment

When and how to pay

1. 01
   Notice

   AT issues the collection note by 30 April, by post or electronic notification. You can also find the payment reference under IMI > Consultar Notas de Cobrança or A Minha Área > Pagamentos a decorrer.

2. 02
   Instalments by amount

   (AT / gov.pt)

   • Up to €100: one payment in May.
   • Over €100 and up to €500: May and November.
   • Over €500: May, August and November.
     You may pay the full amount at once (the May notice includes the reference for the total).
3. 03
   Late payment

   Missing a deadline can mean default interest and, in some cases, a fine. Treat IMI as a predictable annual holding cost.

Practical checks

How to confirm IMI, VPT and the caderneta

1. 01

   Sign in to the Portal das Finanças (password, Citizen Card or Digital Mobile Key).

2. 02

   Download the caderneta predial and note the VPT.

3. 03

   Look up the municipal rate on the official IMI rates service (correct year, Faro district).

4. 04

   Open collection notices / ongoing payments and keep receipts.

5. 05

   In the property area, check whether an exemption is active and for which period.

Buying and selling

Checklist for Algarve buyers and sellers

Buyers

• Ask the seller for a recent caderneta predial and IMI payment proofs for recent years.
• Estimate annual IMI as VPT × municipal rate (allow a buffer if VPT may be reassessed).
• Check whether a temporary exemption is ending, or whether vacant-property uplifts apply.
• Include IMI in holding costs alongside condo fees, insurance and any AIMI.

Sellers

• Clear overdue IMI before completion — tax debts delay deals.
• Put the caderneta and recent receipts in the document pack.
• After sale, confirm the matrix update and that you stop being the taxpayer for later years.

Exemptions

Exemptions and reductions (high level)

Rules change and depend on income, VPT, use and municipal decisions. The examples below follow published gov.pt / AT information — always validate your case on the Portal das Finanças or with a tax professional.

1. 01
   Permanent exemption (low-income households)

   Public 2026 summary: household gross annual income up to about 2.3 × annual IAS (gov.pt cites €17,295.59 for 2026), permanent residence, and VPT ≤ €66,500. Confirm exact conditions and how to apply with AT.

2. 02
   Temporary exemption (new home / permanent residence)

   In outline: VPT up to €125,000, household income up to €153,000, maximum 3 years (with a possible further 2 years by municipal decision under Law 56/2023), and a lifetime limit of twice per taxpayer/household. State debts can block this request.

3. 03
   Other situations

   Municipal reductions or uplifts may apply (dependants, vacant stock, urban-pressure zones, regeneration, listed heritage, etc.). Do not assume they apply in your council without checking the decision and your bill.

Compare taxes

IMI vs IMT vs AIMI

AIMI (AT summary): due by those on the matrix on 1 January; deduction of €600,000 (individual / undivided estate) or €1,200,000 for joint taxation of spouses/civil partners; bracket rates between 0.7% and 1.5% (undivided estates: single 0.7% rate in defined cases). AT assesses in June; payment is usually a single September instalment. Many buyers of one holiday home in the Algarve stay below the threshold — check the sum of your Portuguese VPTs.

Algarve

Practical Algarve tip

IMI rates vary by municipality (Faro, Loulé, Albufeira, Lagoa, Lagos, Portimão, Silves, Tavira, Olhão, Vila Real de Santo António, and others). Before you lock a price or a holding budget:

1. 01

   Read the VPT on the caderneta.

2. 02

   Check the official rate for the year on Portal das Finanças (Faro district) or the council site.

3. 03

   Multiply and compare with what the seller recently paid.

4. 04

   For a second home or investment, also ask whether AIMI could apply to your overall Portuguese portfolio.

Where to verify

Official sources to confirm

• Annual tax — IMI and AIMI — Tax Authority.
• Pay IMI — gov.pt (deadlines, instalments, exemptions).
• IMI rates by municipality — Portal das Finanças.
• IMI Code (CIMI) — arts. 8 (taxpayer), 112 (rates), 112-A (dependants), 120 (payment) and the AIMI chapter.
• Caderneta and collection notices in your authenticated Portal das Finanças area.
• The municipal council website for local resolutions.

Informational content, reviewed against official sources available on 23 September 2026. It does not replace legal or tax advice for your case. Municipal rates, exemption thresholds and IAS values can change — confirm with AT before you pay or commit to a purchase.