It has been confirmed that young people up to the age of 35 will be able to benefit from exemption from IMI and Stamp Tax when purchasing a first home up to 316,772 euros – regardless of their income –, as well as the public guarantee of up to 15% of the acquisition value, with the limit of 450,000 euros.

The measures were presented by the Prime Minister, Luís Montenegro, at the end of a Council of Ministers held in Braga and dedicated to youth. The Government's objective is for them to come into force from August 1st.

Exemption from IMT and Stamp Tax

A total exemption from IMT and Stamp Tax is foreseen for houses up to the 4th IMT bracket, that is, up to 316,772 euros. For houses of higher value, explained Luís Montenegro, there will be an exemption on the portion up to 316,772 euros, with taxes due on the portion between 316,772 euros and 633,453 euros being paid.

The Government will financially compensate municipalities for this loss of revenue, according to the Minister of Youth and Modernization, Margarida Balseiro Lopes.

The minister added that the measure will still have to be legislated in Parliament, but should begin on August 1st. Initially, the exemption request will have to be made in person at the Finance services.

The value on which IMT is levied is the highest between what appears in the property register (i.e. the tax asset value of the house being transacted) and the carrying value (i.e. the sale value).

Public guarantee of up to 15% of the acquisition value

A public guarantee mechanism of up to 15% of the property acquisition value was also approved, with an acquisition limit of 450 thousand euros.

The public guarantee is aimed at young people between 18 and 35 years old, with income up to the 8th income bracket of the IRS, that is, 81,199 euros of annual taxable income.

To benefit from the measure, young people cannot be property owners and cannot have already benefited from public guarantees.

In addition to the limits associated with age, transaction value, and income bracket, access to this public guarantee also requires young people to have a tax domicile in Portugal.

Another condition is that the State guarantee is intended to enable the bank to finance the entire transaction price of the house. Remember that the rules currently in force determine that credit cannot exceed 90% of the value of the house (being, for this purpose, considered the lowest value between the acquisition value and the appraisal value).