Does Portugal have a wealth tax?
The short answer is no, but property owners must watch out for AIMI.
In this 2025 guide, we explain why your pensions and crypto are exempt, how the “Mansion Tax” actually works, and the critical difference between Market Value and Taxable Value (VPT) that could save you thousands. Includes a real-world case study of a British family in the Algarve.
Does Portugal have a wealth tax?
For high-net-worth individuals (HNWIs) considering a move to the Algarve, Lisbon, or Madeira, this is often the very first question we are asked. The anxiety is understandable, especially if you are familiar with the aggressive wealth taxation models in neighbouring Spain or France.
The short answer is no. Portugal does not impose a general annual wealth tax on your worldwide assets.
However, the longer answer requires a strategic understanding of the Adicional ao IMI (AIMI), a targeted levy on high-value Portuguese real estate.
While it is not a “wealth tax” in the traditional sense, it acts as a “luxury property tax” that you must plan for.
In this guide, we will clarify exactly how Portugal taxes wealth, how it compares to its European neighbours, and the specific strategies you can use to optimise your position.
Let us start with the good news.
Unlike Spain, which imposes a Solidarity Tax on net wealth, or France’s Impôt sur la Fortune Immobilière (IFI), Portugal’s system does not tax financial assets or worldwide holdings.
If you become a tax resident in Portugal, the tax authorities generally do not levy an annual charge on:
Only owners of Portuguese real estate are subject to AIMI. Overseas holdings, pensions, bank accounts, or shares located outside Portugal are not taxed.
This simplicity benefits international investors and expats with diversified portfolios, avoiding the complexity of global wealth reporting. This makes it an attractive destination for high-net-worth individuals and those planning long-term stays.
While your financial assets are safe, your Portuguese real estate portfolio requires attention.
In 2017, the government introduced the Adicional ao Imposto Municipal sobre Imóveis (AIMI).
While technically a surcharge on municipal property tax, it effectively functions as a narrow wealth tax on high-value residential property.
AIMI applies to both residents and non-residents.
It targets the cumulative value of residential property and building plots owned in Portugal.
Note: Commercial, industrial, and agricultural properties are strictly exempt from AIMI.
The tax is progressive for individuals. It is levied on the sum of the Taxable Value (VPT) of all eligible properties you own.
Total Property Value (VPT) | Tax Rate (Individuals) |
Up to €600,000 | 0% (Exempt) |
€600,000 to €1,000,000 | 0.7% |
€1,000,000 to €2,000,000 | 1.0% |
Above €2,000,000 | 1.5% |
This is where the expertise of a Wealth Manager becomes vital.
Many clients panic when they purchase a villa for €1.5 million, assuming they will immediately be hit by the 1% AIMI tax rate. This is rarely the case.
AIMI is calculated on the Valor Patrimonial Tributário (VPT) the official taxable value registered with the Tax Authority not the market price you paid.
Questions about Wealth Tax in Portugal?
If your Portuguese property portfolio does exceed the thresholds, there are simple, legitimate ways to manage this liability.
Portugal offers a generous exemption for married couples or those in a civil partnership. By opting for joint taxation (tributação conjunta), you can combine your allowances.
Real World Example: The British Family in the Algarve
In my experience advising international families relocating to Portugal, the absence of a broad wealth tax provides clarity and flexibility in cross-border planning, especially compared with the challenges faced in Spain or France.
For example, a British family considering a base in the Algarve was relieved to find that their UK pensions, share portfolios, and offshore savings were fully exempt from wealth taxation in Portugal. Their only exposure was an AIMI surcharge on a villa valued above €1.2 million, which was easily managed using the married-couple exemption.
If you hold property through a company (a simple nominee structure or a proprietary company), the progressive rates do not apply. Instead, companies pay a flat rate of 0.4% on the total VPT.
A common question from our French clients is: “Can I deduct my mortgage from the property value to reduce the wealth tax?”
To truly appreciate Portugal’s tax efficiency, we must view it in context.
Feature | Portugal (AIMI) | Spain (Patrimonio) | France (IFI) |
Taxable Base | Portuguese Real Estate Only | Worldwide Assets* | Worldwide Real Estate |
Financial Assets? | No (Stocks/Cash Exempt) | Yes (Taxed) | No (Exempt) |
Top Rate | 1.5% (only on RE > €2m) | Up to 3.5% (varies by region) | 1.5% |
Debt Deductible? | No | Yes | Yes (Limited) |
Exemption Limit | €600k (€1.2m per couple) | €700k (plus €300k main home) | €1.3 million |
*Note: Some regions in Spain (like Madrid) offer exemptions, but the new national “Solidarity Tax” has complicated this landscape.
A holistic wealth management strategy looks beyond the annual levy.
No.
There is no annual tax on crypto holdings. F
urthermore, under current 2025 rules, capital gains from crypto are exempt from tax if you have held the asset for more than 365 days (provided it is not your professional business activity).
No.
NHR status grants you privileges regarding income tax, but it does not exempt you from property taxes like IMI or AIMI.
However, because AIMI has a high threshold (€600k/€1.2m VPT), many NHR holders never pay it.
The tax is assessed in June of each year based on ownership as of January 1st.
Payment is due in a single instalment in September.
Portugal’s lack of a general wealth tax makes it exceptionally attractive for expats and investors seeking a tax-efficient and stable jurisdiction. Targeted property levies (AIMI) and favourable succession rules further enhance its appeal, particularly for those prioritising legacy preservation and international mobility.
While the AIMI applies to high-value real estate, the generous €1.2 million allowance for couples and the use of Taxable Value (VPT) rather than market value means that, for most investors, it is a manageable or non-existent liability.
Are you structuring a move to Portugal?
Navigating cross-border taxation requires more than just reading the rules; it requires understanding how they interact with your specific assets.
We’ve Moved Offices on 1st August 2025!
Private Client Consultancy is excited to announce that we have moved to a brand-new office space, designed to better serve our clients and reflect our continued growth.
Effective Date: Friday, 1st August 2025
New Address: Urb Jazmin De Miraflores, C. Jazmín, 2, Mijas Costa 29649, Malaga, Spain
Our phone numbers and email addresses remain unchanged.
All in-person meetings scheduled from 1st August onwards will take place at our new location. Please update your records accordingly.
We look forward to welcoming you to our new space!
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