Portuguese homeowners will see their Municipal Property Tax (IMI) rise by 4.5% in 2025, following the government’s latest adjustments. This increase, affecting housing as well as plots and certain other property types, comes as part of the Tax Authority’s automatic update of the Taxable Asset Value (VPT). For commercial, industrial, and service buildings, the increase will be even steeper at 6%.
Why is IMI increasing?
The update reflects inflation rates between 2022 and 2024, which were lower than previous years. Last year, IMI rose by as much as 9.75% on homes and 13% for non-residential properties, owing to higher inflation in that period.
What will this mean for your budget?
If you currently pay €500 in IMI, your bill will go up by €22.50, totaling €522.50 in 2025, provided your local municipality does not change its tax rate. For businesses with a €2,000 tax bill, the increase will be €120, raising the total to €2,120.
Can your municipality reduce the impact?
Yes—Portugal’s municipal councils have the power to lower IMI rates. In 2025, a year when municipal elections are scheduled, 44 municipalities have chosen to reduce the tax, and over 200 apply the minimum legal rate of 0.30%. Homeowners are encouraged to check with their local council, as their IMI rate may change.
Key Takeaway
Unless your municipality adjusts your rate, expect a 4.5% hike in your IMI bill next year. Stay informed about local council decisions to understand the specific impact on your property tax.
