Portuguese Tax Authority Confirms Young Homebuyers Keep IMT Exemption After Selling
Portugal’s Tax and Customs Authority (AT) has issued a binding ruling clarifying that young homebuyers who receive the “IMT-Jovem” property transfer tax exemption will not be required to repay the benefit if they sell their home within the first six years of ownership. The clarification, published on the official Portal das Finanças on September 10, addresses a critical ambiguity in the tax code that had created uncertainty for young property owners. The “IMT-Jovem” program provides a full or partial exemption on the IMT tax for first-time homebuyers up to 35 years of age purchasing a primary and permanent residence (HPP). The general rule under Article 11 of the IMT Code stipulates that such tax benefits are subject to caducity—meaning they must be repaid to the State—if the owner gives the property a "different destination" than its intended use as a primary home within a six-year period. This raised concerns that selling the property would trigger a repayment obligation. In its response to a query from a taxpayer, the AT confirmed that while a sale does constitute a "different destination," it is also listed as a specific and explicit exception to the caducity rule. The authority’s legal analysis states that the sale of the property "does not trigger the lapse of the benefit" because the alienation "constitutes an exception to that caducity expressly provided for" in the IMT Code. The ruling further clarified that the subsequent purchase of a new home is also irrelevant to the status of the original exemption. The AT concluded: "Vendido o imóvel adquirido com o benefício IMT-Jovem, a aquisição de novo bem imóvel a destinar a HPP... por si só, não conduz à caducidade do benefício" (Once the property acquired with the IMT-Jovem benefit is sold, the acquisition of a new property to be used as an HPP, by itself, does not lead to the lapse of the benefit). This decision provides significant legal and financial certainty for young homeowners, affirming their ability to sell their property without incurring a retroactive tax penalty. Navigate Portuguese property regulations with expert guidance at realestate-lisbon.com.