IMT on property exchanges

The IMT Code provides that, in an exchange, the taxable base is the declared difference in value where that exceeds the difference between the two rateable values. There are therefore two differences to work out, and the larger of them applies.

This matters more in Portugal than it might elsewhere. The VPT, the rateable value held on each property's caderneta predial, is frequently out of step with market value, and by no consistent margin. Where the two properties were last assessed at different times, the gap between their rateable values can exceed the gap the parties agreed on, and it is then the rateable gap that the tax is charged on. Both cadernetas are worth having in front of you before values are settled.

The tax is due from the party receiving the more valuable property. The other pays no IMT at all, even though they too are acquiring a home in the transaction.

This is where nearly every general source goes wrong, and it is not a technicality: it moves the tax by thousands of euros. Having worked out the difference, the natural next step would be to look it up in the progressive table and apply the corresponding rate. That is not what the law requires.

For exchanges the IMT Code applies the rule that governs partial transfers: the rate to be applied to the taxable amount is the one corresponding to the full value of the property. In practice, the average rate produced by taxing the property received in its entirety is worked out first, and that rate is then applied to the difference. Because the Portuguese bands are progressive, that average rate is considerably higher than a property worth only the difference would attract.

Stamp duty follows the same base: 0.8% charged on that same difference, and due from the same party.

An exchange saves IMT and stamp duty, and it saves them for both parties at once: instead of two taxes on two whole values, there is one tax on one difference. That is the comparison the simulator puts side by side, and it is usually the most persuasive part of the arithmetic.

What an exchange does not save is income tax. For capital gains purposes a permuta is a disposal like any other, and each party works out their gain in the normal way. The disposal proceeds are the value attributed to the property received, adjusted up or down by any cash balance paid or received. Anyone entering an exchange believing it avoids tax on the gain is counting on a saving that does not exist.

Also outside this simulator is the exchange of an existing property for a property yet to be built, common in dealings with developers, where the future property is only assessed once it acquires the legal character of a building and the tax is adjusted afterwards.

The figures in use are those in force in 2026 and are reviewed annually.