Tax Exemptions for First-Time Home Buyers Aged 35 or Under in Portugal (2026)

1. What is the purpose?

In order to respond to the housing difficulties and rising costs, the Portuguese government has implemented tax incentives to support young adults in achieving homeownership.

2. Key Eligibility Criteria regarding the buyer

If you’re 35 years old or younger and considering purchasing your first home in Portugal, you may be eligible for substantial tax benefits.

To benefit from these tax exemptions:

• You must be aged 35 or under at the time of acquiring the property. In the year of purchase, you must not be treated as a dependent for IRS purposes.
• You should not have owned any residential property in the past three years.

3. Key Eligibility Criteria regarding the property

Three important conditions apply to the property for it to benefit from the tax exemption.

• Maximum value: In mainland Portugal in 2026, full or partial relief may apply up to a taxable value of €660,982, subject to the scheme’s conditions.
• Date of acquisition : The exemption applies to all acquisitions that occur from August 1, 2024, onwards. Hence, if the property was bought before August 1, 2024, the exemption does not apply.
  
• Primary residence : The property must be intended for your primary residence, thus encouraging homeownership rather than investment or rental purposes.

4. Tax Exemptions (IMT and IS)

In mainland Portugal in 2026, buyers and properties meeting all eligibility conditions benefit from full IMT and purchase stamp duty exemptions up to a taxable value of €330,539.

In mainland Portugal in 2026, eligible buyers purchasing above €330,539 and up to €660,982 benefit from partial relief: IMT and purchase stamp duty are due only on the taxable value exceeding €330,539.

Please, remember that, no exemption applies for properties valued over €660,982.

5. Application Process for Tax Exemptions

To take advantage of these tax benefits, you will need to submit the required documents to the tax authority in order to request exemptions on IMT and IS at the time of issuing the "guias."

To better understand the steps of the acquisition process in Portugal, read this article.

6. Important Considerations

Here are some considerations, based on the frequently asked questions to the Tax Authority ⬇️

• Retroactive Exemptions: The IMT and IS exemptions are not retroactive. They only apply to transactions that occur from August 1, 2024, onwards.
• Ownership Restrictions: If you already own part of a residential property, even inherited, you will not qualify for the exemptions.
• Impact on Couples: If one partner in a couple already owns property, the exemption will only apply to the part being acquired by the eligible partner.

7. Financial impact

The exemption provides significant savings, potentially about 4.5% of the purchase price for eligible buyers.

Conclusion

The new tax exemptions for young adults buying their first home in Portugal aim to make homeownership more accessible.

By reducing taxes such as IMT and stamp duty, the government aims to support eligible buyers aged 35 or under in purchasing a primary residence.

However, this could push prices higher if housing supply doesn’t meet the growing demand. While the measure benefits young buyers, it may favor those with financial support.

To complement this, another initiative offers a public guarantee on mortgages-covering up to 15% of a property’s value for homes up to €450,000, helping buyers with incomes up to €81,199.

If you are considering buying your first home in Portugal, schedul a discovery call to discuss your project. You can also drop me an email.

Mounia Mikou