Buying a house is an extremely exciting decision. But it’s also a process that involves a great deal of bureaucracy and financial burdens, not to mention the price of the property itself. This being the case, using a simulator of the costs of the deed and other taxes is a simple, clear and intuitive way of understanding the additional expenses involved in the deal.
Ultimately, it’s essential to ensure that you have financial capacity before proceeding with the purchase of a house. This is particularly important as the expenses associated with the deed can amount to thousands of euros.
Join us as we explain the taxes included in buying a house and introduce you to our deed cost simulator!
3 Main taxes to take into account when buying a house
When it comes to buying a house, there are three expenses you can’t ignore.
When formalizing the deed, you have to pay the Municipal Property Transfer Tax (IMT) and the Stamp Duty (IS). You will also have to pay Municipal Property Tax (IMI) every year. Find out more about each of these taxes!
1. Municipal Property Transfer Tax (IMT)
IMT is a one-off tax, levied when the deed is signed. This charge is levied on the amount declared in the deed of the house or on the Tax Asset Value (VPT) (between the two, it is levied on the higher value). A rate (ranging from 0% to 8%) and, in some cases, an amount to be deducted are applied to this.
In the deed costs simulator we’ve prepared at DECISÕES E SOLUÇÕES, you can easily input or select the relevant data for calculating IMT (Property Transfer Tax):
– Type of property (own permanent home, secondary home, rural property, other urban property); – Type of deal (purchase, exchange); – Purchase price of the property; – VPT; – Value of the mortgage; – Location (mainland Portugal, autonomous regions).
2. Stamp Duty (IS)
Stamp Duty is not a cost exclusive to the purchase of a house, but it also applies to this transaction. In addition to the moment of deed signing, it may also arise in connection with the granting of housing credit. The deed costs simulator helps you easily discover the expense related to Stamp Duty.
Specifically with regard to the IS of the deed, there is a flat rate of 0.8%, with no portion to be deducted. Therefore, to arrive at the amount to be paid to the notary, simply multiply the higher amount (that declared in the deed or the VPT) by 0.8%.
3. Municipal property tax (IMI)
With the exception of a few cases provided for by law, IMI is levied on all real estate and land. Unlike IMT and IS, which are one-off taxes, IMI is an annual tax paid in a maximum of three installments.
The IMI rate differs depending on the municipality where the property is located, and can involve a contribution of between 0.3% and 0.45% (for urban buildings). The rate applies to the VPT.
In our simulator of the cost of the deed and other taxes, simply enter the IMI rate and the VPT and you’ll quickly know the annual amount of IMI you’ll have to pay.
It’s important to note that there are situations that can lead to exemption from paying IMI (Municipal Property Tax).
– Properties for own permanent residence with a VPT of less than €125,000, owned by a household with a taxable income of less than €153,000 per year – automatic exemption from IMI for three years, starting from the year of purchase; – Properties for own permanent residence with a VPT of less than €67,260.20, owned by a household with a gross income of less than €15,469.85 per year – lifetime exemption from IMI.
Try our deed cost simulator!
You can find out your Municipal Property Transfer Tax, Stamp Duty and Municipal Property Tax charges quickly and easily.
You just need to access the deed and other taxes cost simulator we’ve prepared for your convenience. You’ll see immediately how easy it is to use!
Once you have filled in all the details, a PDF file will be downloaded which you can save, print and consult whenever you want.
I WANT TO CALCULATE THE COST OF THE PROPERTY
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