Portuguese Tax Authority Clarifies IMT Exemption Rules for Young Homebuyers
The Portuguese Tax and Customs Authority (AT) has issued a formal clarification regarding a key housing regulation, confirming that young homebuyers who benefit from the property transfer tax (IMT) exemption are not required to repay the benefit if they sell the property before a six-year period has elapsed. This government announcement provides significant reassurance to recent and future young buyers.
The specific details of this regulatory interpretation stem from an inquiry made by a taxpayer. The individual had acquired a primary permanent residence in December 2024, utilizing the IMT exemption for buyers aged 35 and under. Subsequently, they sold this property in June 2025—well within the six-year timeframe typically associated with such benefits—and had already signed a promissory agreement to purchase a new home still under construction. The AT's ruling clarified that this action does not trigger the revocation of the initial tax exemption.
The implementation timeline for the original exemption began in July 2024, when the government introduced the measure to support young people entering the property market. The law exempts the first acquisition of a primary residence from IMT on property values up to the first tax bracket (currently affecting properties up to €324,058). The AT's recent clarification is effective immediately and applies to all who have used or will use this benefit. It removes the ambiguity surrounding the six-year holding period mentioned in other articles of the tax code.
This clarification directly affects all homebuyers in Portugal aged 35 and under who are purchasing their first primary residence. This demographic, which includes both Portuguese nationals and foreign residents, is a critical segment of the property market. The ruling provides them with greater flexibility and financial security, acknowledging that life circumstances, such as job relocations or family growth, may necessitate moving within a shorter timeframe than six years. It eliminates a potential tax liability that could have amounted to thousands of euros.
The compliance requirements for the exemption remain the same at the point of purchase: the buyer must be 35 or under, it must be their first property acquisition for a primary and permanent residence, and they cannot be considered a dependent for tax purposes. The new ruling clarifies that the only condition for the benefit not lapsing upon sale is that the sale itself does not automatically trigger a clawback. The purchase of a subsequent property is considered a separate event and does not affect the initial exemption.
There are no penalties or consequences for non-compliance in this specific scenario, as the Tax Authority has deemed the action of selling the property within six years to be compliant with the spirit of the IMT Jovem exemption. The ruling effectively interprets the law in favor of the taxpayer, preventing them from being penalized for selling the property early.
The real estate industry has reacted positively to this clarification. Legal professionals and real estate agents now have a clear and definitive answer for their clients, removing a significant point of uncertainty that may have caused hesitation for some potential buyers. The clarification is expected to maintain the strong momentum seen in the market segment for young buyers, which has been a key driver of property transactions since the exemption was introduced.
Legal professionals interpreting the new rules have noted that the AT's decision focuses on the purpose of the law, which is to facilitate the *first* acquisition of a home. The ruling implies that the benefit is secured at the moment of that first purchase and is not contingent on a lengthy, fixed holding period, provided the property was genuinely intended for use as a primary residence at the time of acquisition.
The government's rationale for the initial exemption was to address the housing affordability crisis for young people. This clarification reinforces that objective by removing a punitive barrier that could trap young owners in a property for six years, regardless of their changing needs. It aligns the tax benefit with the reality of modern career and life paths, which often involve greater mobility.
No related legislation is expected to follow immediately, as this was an administrative interpretation of an existing law rather than a legislative change. However, it sets a clear precedent for how the IMT Jovem benefit will be administered going forward. The Tax Authority has provided a clear and accessible resource for taxpayers to understand their obligations and rights, confirming that the subsequent purchase of another home is irrelevant to the status of the first exemption.
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