Tax Inspectors Carry Out 18 Searches in Aveiro and Ílhavo Over Builders Accused of Hiding Part of House Prices With Buyers' Help

The Autoridade Tributária e Aduaneira (AT, the tax and customs authority) says a group of construction companies in Aveiro and Ílhavo hid part of the price of homes they built and sold, with their buyers' agreement. Seven people have been made formal suspects (arguidos) in the case, which the AT has named Operação Valor Oculto (Operation Hidden Value), according to its communiqué (PDF, in Portuguese).

What the tax authority says happened

On Tuesday 10 November, tax inspectors, the GNR and the PSP carried out 18 search warrants in the two municipalities, 13 of them at homes. The investigation is led by the Departamento de Investigação e Ação Penal (DIAP, the public prosecutor's investigation department) in Aveiro, and the suspected crimes are aggravated tax fraud and money laundering.

The AT describes two schemes:

• Hidden sale prices. The companies allegedly left part of the value out of the sale of homes they had built, "in collusion with the respective buyers", to avoid corporate income tax (IRC) and VAT. The prices left out could exceed 1.2 million euros.
• Sham deals inside the group. The AT also suspects simulated transactions between companies in the same group, such as staff "loans" that carry no VAT, used to disguise services that should have paid VAT, or deals that never happened.

The practices date from 2021 to 2025 and involve 2.2 million euros in total, the AT says. The seven are subject only to termo de identidade e residência, the lightest coercive measure in Portuguese criminal procedure, which means giving an address and staying reachable. Documents, phones and computers were seized, and 114 people took part in the operation: 67 tax inspectors, 12 GNR officers and 35 PSP officers. The AT has not named the companies or said whether any of the seven are buyers.

Why a lower price on the deed costs the buyer later

Paying part of a house price "on the side" can look like a saving for the buyer as well as the builder. The tax rules show why it is not.

• Purchase tax. The Imposto Municipal sobre as Transmissões Onerosas de Imóveis (IMT, property transfer tax) is charged on the price in the deed or on the property's tax value (valor patrimonial tributário), whichever is higher. A lower declared price can cut the IMT bill only down to that tax value.
• Tax when you sell. When you later sell the home, your purchase price for capital gains is the value used for IMT. Every euro left off the deed becomes a euro of extra taxable gain on resale.
• Cash. Paying or receiving 3,000 euros or more in cash in any transaction is illegal in Portugal. The limit is 10,000 euros for individuals who are not tax resident and are not acting in business.

The AT's wording, "in collusion with the respective buyers", makes clear it sees the buyers as part of the scheme. It has not said whether buyers will face charges or tax assessments.

If you are buying a new-build

• Make sure the price in the promissory contract (contrato-promessa) and the deed is the full price you pay.
• Pay by bank transfer so every payment can be traced, and keep the records.
• Be wary of a seller who offers a discount in return for part of the price in cash. It is the buyer who is left with the smaller IMT value and the bigger tax bill on resale.

The case comes as building costs climb: construction costs for new homes are up 7.4 percent a year, and Aveiro's council has just backed letting homes rise higher in its master plan. Buyers using the IMT Jovem exemption should also check when it can be lost.