Owning vs Renting in Portugal: What the Tax Bill Really Says

Moving to Portugal or expanding a business here often comes with a big question: is it smarter to rent or to buy property?

The decision isn’t just about lifestyle or cash flow — taxes play a huge role. From IMI to AIMI, stamp duty, and rental income obligations, understanding the tax impact of each option can help avoid surprises and make the right call for your situation.

Renting: Flexibility With Fewer Tax Headaches

For individuals and companies, renting means lower upfront costs and fewer ongoing tax obligations.

Main points:

• No IMI (Imposto Municipal sobre Imóveis): This property tax applies only to owners. Renters don’t deal with it.
• Deductible costs: In some cases, rental payments can be deducted for personal IRS (housing expenses) or business accounting.
• Less bureaucracy: No stamp duty, no notary fees, no registration costs.

Downside: rent doesn’t build equity, and rental prices in Lisbon, Porto, and coastal areas have been rising sharply.

Owning: Building Assets, With Added Tax Layers

Buying property in Portugal can be a solid long-term investment — but it comes with tax obligations.

Main points:

• IMI: Annual property tax ranging from 0.3% to 0.45% of property value (lower in some rural municipalities).
• AIMI: An additional property tax for high-value real estate (applies above €600,000).
• Stamp Duty (IMT + IS): Paid upfront on purchase — varies by property type, use, and value.
• Capital Gains Tax: If selling the property, residents are taxed progressively and non-residents at a flat 28%.
• Rental income: If the property is rented out, income must be declared and taxed.

Owning has advantages — appreciation, stability, rental income opportunities — but the tax bill can’t be ignored.

For Expats and Businesses: Key Takeaways

• Expats: Renting may make more sense in the first years, while understanding the market and residency status. Buying is often better long-term, especially with stable plans.
• Businesses: Renting offices or warehouses keeps cash free for operations. Buying can secure assets but ties up capital and triggers higher tax compliance.

Final Word

In Portugal, the choice between renting and owning isn’t just financial — it’s fiscal. Renting keeps things simple, while owning builds assets but brings extra tax layers. The “right” answer depends on goals, timeline, and resources.

At OnCorporate, we help individuals and businesses make the decision with clarity — weighing both lifestyle and fiscal efficiency.

👉 Thinking about property in Portugal? Let’s talk. oncorporate.com/contact