Real Estate

Real Estate Transfer Tax (IMT)

Uniformization of taxation for all legal types of companies

The previous distinction between Private Limited Liability Companies (“Sociedades por Quotas” or “Lda.)) and joint stock companies (“Sociedades Anónimas” or “SA”) ceases to exist. Real Estate Transfer Tax applies at 6.5% in the following cases:

• acquisition of shares in non-listed companies whose assets consist of more than 50% of real estate located in Portugal;

• when such real estate is not directly allocated to a commercial, industrial or agricultural activity (except resale), and

• by virtue of such acquisition, redemption of shares of any other facts, one of the shareholders owns at least 75% of the sharecapital (or the number of shareholders is reduced to two married persons or in a non marital partnership).
  
  

Allocation to shareholders of own shares held by a company

In case of ownership of a participation of at least 75% of the sharecapital (by means of acquisition, redemption or in other situations) as well as in case the number of shareholders is reduced to two married persons or in a non marital partnership, own shares held by the company should be allocated to the shareholders in proportion of their respective participation.

Taxable value of real estate acquired by shareholders

A new rule is introduced for quota holders, shareholders or other unitholders that have paid IMT upon the acquisition of shares or participating units, and that become owners of real estate as a result of a subsequent transaction (by means of dissolution of the company or any other transaction for a consideration). The amount of IMT payable by the quota holder, shareholder or other unitholder shall correspond to the difference between the IMT due and the amount previously paid.

IMT/ IMI – Indirect ownership by offshore entities

Entities held directly or indirectly by offshore entities are not entitled to the suspension of IMI applicable in case of resale.

Aggravated IMI and IMT rates (7.5% respectively 10%) also apply in case of indirect ownership by offshore entities. I.e., in case of real estate owned by a company under the direct or indirect domain or control (within the meaning of the Company’s Code) of an entity resident in an offshore territory.

Amendment to the Tax Benefits Code – National fund for the restoration of building

Extension of the tax regime applicable to a national fund for the restoration of buildings (“Fundo Nacional de Reabilitação do Edificado”)

This tax regime is extended until 31 December 2025. It was formerly currently established under the tax regime applicable to Real Estate Investment Funds for Residential Letting (“Fundos de Investimento Imobiliário para Arrendamento Habitacional”), having ended in 31 December 2020.