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How Taxes Work in Portugal

A plain map of the taxes you pay living in Portugal, from income tax rates and special regimes to property, investment, and social security.

Last verified: September 2026.

Who this is for

  • You are moving to Portugal, or have just arrived, and want to know which taxes you will pay.
  • You are employed, self-employed, retired, or living on savings, from the EU or elsewhere.
  • You own or plan to buy property here, as a resident or from abroad.

Not for you if: you are ready to file this year's return. Read "Filing Your Annual Income Tax Return (IRS) in Portugal" instead.

Updated September 2026. Income tax rates fell again for 2026, and a new housing law changed rent and property taxes from May 2026.

Once you are tax resident in Portugal, you pay income tax (IRS) on your income from every country. Rates run from 12.5% to 48%, with flat rates for investments and rent. You file one return a year, between 1 April and 30 June. If you work, you also pay Social Security. If you own property, you pay a one-off tax when you buy and a yearly tax after that. Everyday spending carries VAT at up to 23%. This guide explains each tax and links to the detailed guides.

When Portugal starts taxing you

You become tax resident in Portugal if either of these is true in a year:

  • You spend more than 183 days here in any 12 month period that starts or ends in that year. Any day you sleep here counts.
  • You have a home here that you seem to intend to keep as your usual home.

If you arrive part way through the year, you are resident from the day you arrive. Before that, you are non-resident, and Portugal taxes only your Portuguese income.

As a resident, you declare your worldwide income: salary, pensions, rent, interest, dividends, and gains, wherever they arise. Treaties with other countries stop you paying full tax twice on the same income. Read "Becoming a Tax Resident in Portugal" for the tests in detail.

You need a tax number (NIF) for almost everything, including renting, banking, and utilities. Read "Getting a NIF (Tax Number) in Portugal".

Income tax (IRS) and the 2026 rates

IRS is Portugal's personal income tax. It groups income into categories: salary (A), self-employment (B), investment income (E), rent (F), gains (G), and pensions (H). Salary, pensions, and self-employed income are added together and taxed on a sliding scale. Each rate applies only to the slice of income inside its band.

These are the rates for income earned in 2026:

Taxable incomeRate on that slice
Up to €8,34212.5%
€8,342 to €12,58715.7%
€12,587 to €17,83821.2%
€17,838 to €23,08924.1%
€23,089 to €29,39731.1%
€29,397 to €43,09034.9%
€43,090 to €46,56643.1%
€46,566 to €86,63444.6%
Over €86,63448%

A solidarity surcharge adds 2.5% on taxable income between €80,000 and €250,000, and 5% above that. If your tax address is in the Azores or Madeira, lower regional rates apply.

Before the rates apply, salary and pensions get a fixed allowance of €4,587.09 per person for 2026, or your actual Social Security contributions if higher. Very low incomes pay no IRS at all.

Example. You are single and earn a €35,000 salary in 2026. Your Social Security is €3,850, which is less than the allowance, so your taxable income is €30,412.91. The scale gives about €6,404 of tax. Deductions such as the €250 for general family expenses then reduce it. You pay roughly 18% of your gross pay.

Married couples and registered partners can choose to file jointly. Your incomes are added, halved, taxed, and the tax doubled. It usually helps when one partner earns much more.

Your tax bill is then reduced by deductions for health, education, rent, and everyday spending. They come from invoices issued with your NIF. "Filing Your Annual Income Tax Return (IRS) in Portugal" lists each one and its limit.

Special regimes: IRS Jovem, IFICI, and NHR

IRS Jovem. If you are 35 or under, part of your salary or self-employed income is tax free for up to 10 years. It is 100% in the first year, falling to 25% in years 8 to 10, up to a yearly cap (€29,542.15 for 2026). New arrivals can use it, but not together with NHR or IFICI. Read "Claiming the Young Worker Tax Relief (IRS Jovem) in Portugal".

IFICI. This regime replaced NHR for people who became resident from 2024. If you qualify, your salary or self-employed income from certain jobs is taxed at a flat 20% for 10 years. Some foreign income, such as dividends, interest, and rent, can also be exempt. Foreign pensions are not covered.

The qualifying jobs are mainly in research, higher education, startups, and highly skilled roles in companies that export or invest. You must not have been resident in Portugal in the previous five years, and you must register by a deadline. You cannot use it if you ever had NHR, and you can use it only once. Read "Qualifying for Portugal's IFICI Tax Regime (the NHR Replacement)".

NHR (non-habitual resident). The old regime closed to new people. A transition let some people register until the end of 2024. If you are already in it, you keep it until your 10 years end. Foreign pensions are taxed at 10% for most people who joined after March 2020.

On 21 April 2026, the Constitutional Court ruled, in one case, that the government could not set the list of high-value jobs for the NHR 20% rate by ministerial order. The ruling binds only that case for now. If you use the NHR 20% rate, ask an adviser whether it affects you.

If you are retiring here, plan on your foreign pension being taxed at the normal rates above, unless you already hold NHR. Read "Retiring in Portugal".

Filing and paying income tax

You file one return a year for the year before, online on the Portal das Finanças, between 1 April and 30 June. Many employees and pensioners can simply confirm a pre-filled return (IRS Automático). Tax due is paid by 31 August. Refunds usually arrive within a few weeks.

Your employer or pension payer withholds tax from each payment during the year. The return squares the account. If you are self-employed, you may also have to make advance payments in July, September, and December.

Read "Filing Your Annual Income Tax Return (IRS) in Portugal" for who must file, the steps, the forms, deductions, refunds, and late filing.

Tax on investments, gains, and crypto

These flat rates apply unless you choose to add the income to your other income and pay the scale rates:

  • Interest and dividends: 28%, usually taken at source by Portuguese banks. Foreign interest and dividends go on your return.
  • Gains on shares and funds: 28% on the gain. If you held the shares for less than a year and your income is in the top band, the gain must be taxed on the scale instead.
  • Crypto: gains on crypto held for less than a year are taxed at 28%. Gains on crypto held for a year or more are usually tax free. Crypto received for work is taxed as income.
  • Property you sell in Portugal: half of the gain is added to your other income and taxed on the scale. This applies to non-residents too. If you sell your permanent home and reinvest in another permanent home, the gain can be tax free. From 2026 to 2029, a gain reinvested in homes let at moderate rents can also be tax free.

Payments from investments in listed tax havens are taxed at 35%.

Tax on rent you receive

If you let a home, the rent is taxed at a flat 25% after allowable costs. Long leases pay less: 15% for leases of 5 to 10 years, 10% for 10 to 20 years, and 5% for 20 years or more.

From 1 January 2026 to the end of 2029, rent of €2,300 a month or less on a home is taxed at 10%, unless a lower rate applies. Other rent, such as on shops, is taxed at 28%. You can instead choose to add rent to your other income. Read "Declaring Rental Income as a Landlord in Portugal".

Property taxes

You pay three kinds of tax on property. "Property Taxes in Portugal for Residents and Foreign Owners" covers them in full.

  • When you buy: property transfer tax (IMT) and stamp duty. Stamp duty is 0.8% of the price or tax value, whichever is higher. IMT depends on the price and use. For a permanent home in 2026, the first €106,346 is free, and rates rise to 8%, with flat rates of 6% and 7.5% at the top. Second homes pay more.
  • If you buy from abroad: since May 2026, a non-resident buying a home pays a flat 7.5% IMT with no reductions. The exceptions are if you become resident within two years or let the home at a moderate rent.
  • If you are 35 or under: buying your first permanent home can be free of IMT and stamp duty up to €330,539. Read "Claiming the Under-35 IMT and Stamp Duty Exemption in Portugal".
  • Every year you own it: municipal property tax (IMI). Councils set 0.3% to 0.45% of the property's tax value for urban property. Rural land pays 0.8%. Read "Paying IMI Property Tax in Portugal".
  • If your property is worth a lot: an additional tax (AIMI) applies to individuals whose homes and building land together have a tax value over €600,000. The rate is 0.7%, rising to 1% above €1 million and 1.5% above €2 million.

Selling property can create a gain taxed as shown above. Gifts and inheritances do not pay a separate inheritance tax. They pay 10% stamp duty, unless they pass to a spouse, partner, child, grandchild, parent, or grandparent. Read "Making a Will and Handling an Inheritance in Portugal".

Social Security contributions

If you work in Portugal, you pay into Social Security (Segurança Social) as well as income tax.

  • Employees pay 11% of gross salary. Your employer pays 23.75% on top.
  • Self-employed people pay 21.4% on 70% of their income from services. You declare your income every three months. Your first 12 months of activity are usually exempt.

EU rules and agreements with some other countries decide where you pay if you work across borders. Read "Understanding Portugal's Social Security System" and "Registering as Self-Employed (Recibos Verdes) in Portugal".

VAT and other everyday taxes

  • VAT (IVA): 23% on most goods and services, 13% on some food and restaurant meals, and 6% on essentials such as basic food, books, and medicines. Rates are lower in the Azores and Madeira. If you are self-employed, you may have to charge VAT once your turnover passes the exemption limit.
  • Cars: a one-off vehicle tax (ISV) when a car is first registered in Portugal, and a yearly road tax (IUC). Read "Importing a Car to Portugal" and "Paying Road Tax (IUC) and Passing Vehicle Inspection in Portugal".
  • Companies: corporate tax (IRC) is 19% for 2026, with 15% on the first €50,000 of profit for small and medium firms. Local and state surcharges can add more. The rate is due to fall to 18% in 2027 and 17% in 2028. Read "Starting a Company in Portugal".

Avoiding double tax

Portugal has tax treaties with most countries its residents come from, including the UK, the US, Canada, Brazil, and most of Europe. A treaty decides which country may tax each type of income. Where both may, Portugal usually gives a credit for the foreign tax, up to the Portuguese tax on the same income. You claim it on your return.

A new UK and Portugal treaty came into force at the end of 2025. If you have UK income, check how it now applies. US citizens stay taxable in the US wherever they live. Read "Avoiding Double Taxation in Portugal".

The tax year at a glance

  • 1 January to 31 December: the tax year.
  • By the end of February: check invoices on e-Fatura and update your household on the Portal das Finanças.
  • 1 April to 30 June: file your IRS return for last year.
  • May, and August or November if the bill is larger: pay IMI.
  • July, September, and December: advance tax payments, if you are self-employed and they apply to you.
  • By 31 August: pay any IRS due.
  • September: pay AIMI, if it applies.

Mistakes new residents make

  • Assuming NHR still exists. It is closed. IFICI is narrower and does not cover pensions.
  • Leaving out foreign income. Portugal receives data from other countries' tax authorities. Missing income leads to back tax, interest, and fines.
  • Not asking for invoices with your NIF. You lose deductions.
  • Ignoring the pre-filled return. If you do nothing, IRS Automático becomes final on 30 June, even if it is wrong.
  • Counting days wrongly. The 183 day test uses any 12 month period, and a home here can make you resident sooner.
  • Missing the IFICI or NHR registration deadline. Late registration can cost you years of the regime.

When to get help

You can handle a salary or a single pension yourself. Consider a certified accountant (contabilista certificado) if you have income from several countries, self-employed income, rental property, a property sale, or IFICI or NHR status. Fees vary with the work. Ask for a written quote. The Portal das Finanças is mostly in Portuguese, but Finanças offices and the phone line can help.

This guide is general information, not tax advice.

Sources

Last verified September 2026. Rules and fees change; check the official source before acting.

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