The Cascais Letter · Buyer notes

Portugal's 2027 budget and your house purchase: what changes, what waits, and what was never in it.

Filed under: Buying in Portugal

If you are planning to buy in Portugal next year, the 2027 budget touches your tax bill in two places, and both are still only proposals. The honest summary is short: the savings are real but modest, the vote that decides them falls on 24 November, and two of the measures most often credited to this budget were already law before it was written.

Where the budget stands, and why nothing here is law yet

The government delivered its proposed 2027 State Budget (Orçamento do Estado para 2027, bill 110/XVII/2.ª) to parliament on 8 October 2026. Parliament debated it on 27 and 28 October and approved it in principle, na generalidade, on the evening of 28 October. That vote opens the detailed stage rather than closing anything: parties can table amendments until 6 November, the committee votes run from 18 to 23 November, and the final overall vote is set for 24 November 2026. After that come presidential promulgation and publication in the Diário da República. Only then, if it passes, would the new numbers take effect on 1 January 2027.

So every figure below that comes from the bill is a proposed figure. I will mark it as such each time it matters, because on a purchase the difference between a proposed limit and a legal one is measured in thousands of euros and in completion dates.

What the proposal changes for a buyer: the IMT tables move up 2.3%

IMT, the property transfer tax paid at completion, is where the bill actually touches a purchase. Article 65 of the proposal lifts every IMT bracket by 2.3%. For a home bought as your permanent residence, the slice of the price that pays no IMT at all rises from €106,346 to a proposed €108,792, and each band above it shifts up by the same proportion.

Be clear about the size of this. A 2.3% lift in the brackets trims the tax on an ordinary purchase by a modest amount, hundreds rather than thousands of euros on a mid-range home. It is welcome, it is not a reason to move a completion date, and it is not a reason to pay more for a house. If a seller or an agent presents the budget as a coming tax windfall for buyers, that is sales talk.

Under 35 and buying your first home: the exemption limit rises to a proposed €338,141

The one change with real weight sits inside the young buyer regime. Buyers aged up to 35 purchasing their first permanent home are exempt from IMT and from stamp duty, up to a price limit. That limit is €330,539 today. The bill's updated IMT tables would raise it to a proposed €338,141.

The limit is a cliff edge, not a band: above it, the exemption falls away and the purchase is taxed in the ordinary way. So the proposed rise matters most to the buyer sitting just above today's line. A 34-year-old buying at €335,000 is outside the exemption as the law stands; at the proposed €338,141 limit, the same purchase would fall inside it, and the saving would be the whole IMT bill on that price, several thousand euros, not a 2.3% trim. If that sounds like your purchase, the timing question below is worth a proper conversation with your lawyer.

The budget report also confirms that the public guarantee behind young buyers' mortgages continues: the state guarantee that helps first-time buyers under 35 borrow up to the full purchase price, where the bank agrees. That scheme is already running and is not one of the things waiting on the November vote.

What was never in this budget: the 6% construction VAT and the 10% rent tax

Two housing measures dominate the commentary around this budget, and neither of them depends on it. Both were set in May 2026 by Decree-Law 97/2026, are already in force, and stand whatever happens on 24 November.

The first is VAT at 6%, rather than 23%, on eligible construction and rehabilitation: building or renovating a home to live in permanently, and building homes for the moderate-rent rental market, under conditions that include sale prices up to €648,000 in the scheme. If you are pricing an off-plan purchase or a renovation, this is part of today's arithmetic, not a 2027 hope, and our off-plan guide covers where it fits in a new-build purchase.

The second is the tax on rental income. Landlords letting homes at moderate rents, up to €2,300 a month on residential leases, pay IRS at 10% instead of the standard 25%, on income received from 1 January 2026 to 31 December 2029. For anyone buying to let, that rate belongs in the yield calculation now, alongside the 2027 rent update of 2.56% covered in our rent update guide. Neither figure moves with the budget vote.

The €2 billion headline, and what it does not do

The proposal puts serious money behind housing: about €2 billion in total, with some €1.5 billion of it directed to public housing construction and rehabilitation programmes. The finance minister told parliament the government's structural reforms will shortly stabilise Lisbon prices. Treat both statements the way a buyer should. Public housing money spends over years, through programmes and building sites, and whatever it eventually does to supply, it does nothing to the price of the home you are negotiating this winter. Underwrite the house in front of you, at today's numbers.

Two things the proposal pointedly does not touch. IMI, the annual municipal property tax, is unchanged in the bill; a temporary IMI exemption was being discussed between parties in October, with no published text, so file it under things that could appear by 24 November and plan as if it will not. And the purchase process itself, the reservation, the CPCV, the escritura, the due diligence that sits around them, is exactly as it was. Our buying costs guide remains the arithmetic to work from until the final law says otherwise.

What to do now, and what to wait for

Buy on today's law. Run every budget, offer and completion plan on the figures in force now: the €106,346 zero band, the €330,539 young buyer limit, the current IMT tables. If the proposals pass, the improvement lands as a small bonus. A plan that only works at proposed numbers is not a plan.

If you are under 35 and near the limit, model both lines. Price your target purchase against €330,539 and against the proposed €338,141, and talk to your lawyer about completion timing. IMT is charged at the escritura, and whether a completion in late December or early January is better for you depends on the final text and its transitional rules, which nobody can read until the law is published. This is the one place where a few weeks either way could be worth real money.

Do not delay a sound purchase for the brackets alone. Outside the young buyer cliff edge, the proposed saving on a typical purchase is small next to the cost of losing the right house, or of a price agreed today drifting while you wait. Houses do not hold still for budgets.

Wait for 24 November before treating any proposed number as yours. Amendments can move limits, drop measures or add new ones. After the final vote, the promulgation and the published law are what count. We will update this article when the law is published.

Sources

General information checked in October 2026. The budget figures in this article are from a bill still before parliament and can change before the final vote on 24 November 2026; nothing proposed here is law until the approved text is published in the Diário da República. Your own position depends on the property, the price and how you hold it; a Portuguese lawyer should confirm the figures before you complete. This article is general information, not legal or tax advice.
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