Understanding AIMI (Portuguese Property Surtax)

Portugal’s property market continues to attract global attention, thanks to its Mediterranean climate, rich culture, and favorable residency options. But for property owners — both residents and non-residents — there’s a specific tax that often surprises newcomers: the Adicional ao Imposto Municipal sobre Imóveis, or AIMI.

Introduced in 2017, AIMI is an additional annual tax on high-value residential real estate in Portugal. Unlike the standard Imposto Municipal sobre Imóveis (IMI), which all property owners pay, AIMI targets properties — or portfolios of properties — that exceed specific taxable value thresholds. It applies to individuals and companies alike and is part of Portugal’s broader effort to ensure that wealthier property owners contribute more to public revenue.

Who Pays AIMI?

AIMI applies to residential property owners and land designated for residential development. It is not limited to residents of Portugal — anyone who owns qualifying property in the country may be subject to it, regardless of their tax residency status.

Here’s how liability is determined:

• Individuals are granted a €600,000 exemption on the total Valor Patrimonial Tributário (VPT) — the tax-assessed value — of their residential property holdings.
• Married couples or de facto unions who opt for joint taxation enjoy a doubled exemption of €1.2 million.
• Companies and other legal entities receive no exemption at all. AIMI applies to the total VPT of all residential properties they own in Portugal.

Commercial, industrial, and tourist properties are excluded from AIMI. This ensures the tax targets wealth held in private, high-value residential real estate, rather than penalizing business or investment activity.

AIMI Rates for 2025

The AIMI tax is progressive, meaning the rate increases as the total taxable value increases. The current rates are:

For Individuals:

• Up to €600,000: 0% (exempt)
• €600,001 — €1,000,000: 0.7%
• €1,000,001 — €2,000,000: 1%
• Over €2,000,000: 1.5%

For Married Couples (joint ownership):

• Up to €1,200,000: 0% (exempt)
• €1,200,001 — €2,000,000: 0.7%
• €2,000,001 — €4,000,000: 1%
• Over €4,000,000: 1.5%

For Companies and Legal Entities:

• Flat rate of 0.4% on the total VPT of residential properties
• Entities based in jurisdictions deemed tax havens by Portugal are taxed at a punitive rate of 7.5%

A Practical Example

Suppose an individual owns residential properties in Portugal with a combined VPT of €1.5 million. Here’s how their AIMI would be calculated:

• First, subtract the €600,000 exemption: €1.5 million — €600,000 = €900,000
• Next, apply the progressive tax rates:
• €400,000 at 0.7% = €2,800
• €500,000 at 1% = €5,000
• Total AIMI due: €7,800

If the same property were held through a company, the calculation would be simpler: €1.5 million × 0.4% = €6,000, with no exemptions.

Important Deadlines

AIMI liability is determined based on property ownership as of January 1st of each year. The Portuguese Tax Authority issues the assessment in June, and payment is due by the end of September. Missing the payment deadline can result in interest charges and penalties.

Deductions and Offsets

There are some opportunities to offset AIMI liability:

• Individuals who rent out their residential properties may be able to deduct the AIMI paid against their personal income tax (IRS), proportional to the rental income earned.
• Companies may deduct AIMI from corporate income tax (IRC) if the properties are generating taxable income.

Still, AIMI is generally not a tax that can be entirely avoided once applicable. Tax planning strategies such as structuring ownership across multiple individuals or legal entities may reduce exposure, but they come with their own complexities and should be approached with professional advice.

Final Thoughts

AIMI is an important part of Portugal’s property tax framework. While not universally applicable, it can significantly impact the cost of owning high-value real estate in Portugal. With growing interest in luxury property and second homes, especially from international buyers, awareness of AIMI is critical.

If you own or plan to acquire property in Portugal, especially for personal use or as an investment, make sure to factor AIMI into your financial planning. Consulting with a Portuguese tax advisor will help you understand how AIMI interacts with your overall tax position and explore ways to structure your ownership efficiently.

Tax is one of GFDL Advogados’ core practices. The firm is also available to assist with any real estate transaction.

Disclaimer

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