Property owners and prospective buyers in Portugal, take note—2026 will see a significant change in property taxation. The reference price per square meter for Municipal Property Tax (IMI) assessments will rise to €712.50, according to new regulations published in the Official Gazette. This change ends a three-year run of stability and reflects the evolving conditions in the country’s property market.
What Does the New IMI Value Mean?
Every year, Portugal sets an official average construction cost per square meter. This figure is used to help determine the taxable patrimonial value (VPT) of urban properties—a key figure on which the IMI rate is charged.
For 2026, the new ordinance sets the construction value per square meter at €570. But, according to IMI legislation, an extra 25% is added to account for the value of the land itself. So, for tax purposes, the base calculation becomes €712.50 per square meter.
Who Will This Affect?
- New Properties: The updated valuation is immediately relevant for new buildings.
- Properties with Major Modifications: Renovated or rebuilt properties, or those undergoing a new assessment, will also be taxed based on this higher value.
- Existing Properties: For most existing homes, the new rate won’t apply unless there’s significant work done or a new evaluation takes place.
Why the Increase?
The construction price per square meter reflects factors like rising labor, material, and administrative costs. As these costs climb, so does the assessed value used for taxation. This mechanism ensures the tax base remains aligned with real market trends.
Historically, this value has fluctuated with the market. For example, it rose from €600 in 2003 to €615 in 2006 (holding steady until 2008), dropped back during the global financial crisis, then gradually increased again, with the last change in 2023 setting the value at €665. The jump to €712.50 for 2026 is therefore the largest in several years, signaling continued strength and activity in Portugal’s real estate market.
Impact on Homeowners and Buyers
A higher per-square-meter value means that, when new properties are assessed or when existing ones are significantly changed and reassessed, they may face a higher IMI bill. The change doesn’t affect everyone immediately but is particularly relevant for those buying newly built properties or planning substantial renovations.
Portugal’s Real Estate Outlook for 2026
This increase also reflects a broader trend: despite some global market uncertainty, Portugal’s real estate sector remains robust. As construction and material costs rise and international demand stays strong, government policies adjust to keep property taxes in line with true market values.
In Summary
- The IMI assessment price per square meter will rise to €712.50 in 2026.
- This affects property tax calculations for new and updated properties.
- The move responds to higher construction costs and ongoing market demand.
- Most existing homeowners won’t see an immediate increase unless their properties are reevaluated.
Stay informed:
For continuous updates on Portugal’s property market and practical advice on taxes and real estate, follow our Real Estate section. 2026 is shaping up to be another important year for buyers, sellers, and investors alike!
