Portugal’s Housing Tax Set to Rise 4.5% in 2025
The Municipal Property Tax (IMI) in Portugal is set to rise again in 2025, with residential buildings facing a 4.5% increase and commercial, industrial, and service properties seeing a 6% adjustment. These changes result from the automatic triennial update of the Taxable Asset Value (VPT) carried out by the country’s Tax Authority. Even so, the actual impact on taxpayers may vary, as municipalities still have the option to lower their IMI rates.
With municipal elections taking place next year, many councils appear prepared to ease the pressure: according to data compiled by ECO, 44 municipalities have already chosen to reduce their rates, and more than two hundred will apply the minimum rate of 0.30%. Compared with last year, when IMI rose 9.75% for homes and 13% for non-residential buildings, the increase for 2025 will be considerably milder. Leading tax experts explain that the difference is tied to inflation.
Lower inflation softens the IMI increase, but property owners will still feel the impact in 2025.
The price variation between 2022 and 2024 was less severe than the 2021–2023 period, which leads to smaller correction coefficients. The decree sets a monetary correction factor of 1.06 for 2022, corresponding to a 6% update for commercial, industrial, and service buildings, while residential properties, building plots, and similar categories will be updated by 1.045, or 4.5%.
For many families, particularly those with mortgages who do not benefit from exemptions, this increase represents yet another strain on household finances. A homeowner currently paying €500 in IMI will see their bill rise by 4.5%, adding €22.50 and bringing the total to €522.50 if their municipal rate remains unchanged. Non-residential property owners face a larger adjustment, for instance a business paying €2,000 in IMI today will see their tax rise by 6%, or €120, increasing the bill to €2,120 next year.
Even with a smaller update, the new rates signal another year of rising property costs for households and businesses alike.
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