Property taxation in Portugal is split between upfront transactional taxes paid at acquisition and ongoing annual municipal duties. The primary acquisition cost is the Municipal Property Transfer Tax (Imposto Municipal sobre Transmissões Onerosas de Imóveis - IMT), which is calculated based on the purchase price or the tax-registered value (Valor Patrimonial Tributário - VPT), whichever is higher. Effective September 1, 2026, under Decree-Law no. 97/2026, non-resident buyers of urban residential property are subject to a flat IMT rate of 7.5%. Non-resident buyers can reclaim the difference between the 7.5% flat rate and the progressive resident brackets if they become Portuguese tax residents within two years of purchase, or allocate the property to a qualifying moderate-rent long-term lease. Once acquired, owners are subject to the annual Immovable Property Tax (IMI), which varies by municipality and is calculated on the property's registered tax value.