According to data released on 28 October 2026, revenue from the Municipal Property Transfer Tax (IMT) has more than tripled over the past ten years, reaching a record €1.8 billion in 2025. The surge reflects sustained real estate price appreciation and transaction volumes, driven by foreign investment, tourism-related purchases, and limited housing supply. Consequently, municipalities have become increasingly dependent on this volatile revenue source, with IMT now accounting for over 35% of own-source revenues for major cities like Lisbon and Porto, up from 12% a decade ago. The Court of Auditors has warned of fiscal risks should the property market correct.
Key Takeaways
- Revenue Concentration: Top 10 municipalities collect 60% of national IMT, creating regional disparities in fiscal capacity.
- Procyclicality Risk: IMT revenue falls sharply during downturns, exposing local budgets to property cycles; 2012-2014 saw a 40% drop.
- Policy Response: Government is studying diversification of municipal funding, including a share of national VAT, to reduce reliance on transaction taxes.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement