In an effort to make housing more affordable to the young adult population, the Portuguese government put into effect fiscal exemptions for first-time buyers who are 35 years of age or less. With a significant number of foreigners applying for the incentive, this public guarantee is at risk of ending sooner than expected, which is a clear sign that those who are eligible for this benefit must act fast.
Why is this Government Incentive so Popular Among Expats and Overseas Buyers?
In August 2024, the Portuguese government implemented a strategic initiative to make homeownership more accessible for young adults under the age of 35. This has been achieved through the exemption of two taxes: IMT (Imposto Municipal sobre Transmissões or Municipal Property Transfer Tax) and IS (Imposto de Selo, equivalent to stamp duty). With IMT rates ranging from 0% to 8% of a property’s value, it’s easy to see how this exemption can lead to significant savings. For instance, on a property costing €450,000—the maximum eligible for the incentive—savings on IMT alone can reach €36,000.
Although this cost reduction is highly attractive to any young adult looking to purchase their first home (another government-imposed criterion), foreigners under 35 have an additional advantage that older non-nationals don’t: the possibility of securing 100% mortgage financing from a bank. While this practice is already available to Portuguese citizens, expats and overseas buyers who don’t qualify for this new incentive can typically only borrow up to 85% of the property’s value.
Given the substantial savings and the ability to secure higher mortgage financing, it’s no surprise that, according to Portuguese newspaper Público, over 11,500 young buyers have applied for property loans under this initiative. Many of these applicants are non-Portuguese, with a significant proportion hailing from Brazil, various African countries, and the United States—making up the majority of foreign buyers benefiting from the IMT and Stamp Duty exemption.
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High Demand Might End Resources Sooner Than Expected
Given that €1 billion of the €1.2 billion originally allocated by the Portuguese government as a public guarantee to support this initiative has already been utilised, several major banks in Portugal have acknowledged that the incentive may soon come to an end—unless the government increases the funding available for first-time home buyers under 35.
With such significant benefits, the success of this initiative is expected to continue gaining momentum. That is why, if you’re looking to purchase a property under these favourable conditions, it would be wise to accelerate your search and act quickly.
To make the process easier for you, here are some fantastic properties under €450,000—a perfect opportunity to take advantage of this opportunity before it ends sooner than anticipated.
Unique Penthouse 1 Bedroom | Graça
1 Bedroom | 1 Bathroom | Amenities | Heating | A/C | Equipped Kitchen | Furnished | Video Intercom
Taipas Apartment | Avenida da Liberdade
2 Bedrooms | 1 Bathroom | Amenities | Heating | A/C | Equipped Kitchen | Furnished | Metro Proximity
River Tagus Apartment | Cais do Sodré
1 Bedroom | 1 Bathroom | Heating | Concierge Service | Garden
Gorgeous Lisbon | Arroios
1 Bedroom | 1 Bathroom | Heating | Garden | Fireplace
Colorful Studio | Baixa
Studio | 1 Bathroom | Ocean View | Centrally located | Heating | Metro Proximity
Ask for a Viewing And Secure Your Benefit
House hunting can be a daunting process, especially if you have urgency in finding the perfect place fast enough to secure a great benefit such as the IMT and Stamp Duty exemption. Portugal Homes turns your search into a much easier and smoother process, with local experts that can curate a list of properties that not only fit your taste but also meet the criteria of eligibility of the Portuguese incentive programme aimed at young homebuyers. Let us know what you're looking for so you can line up viewings - in person or online - and get things started as soon as possible so you don't lose this opportunity.
