Politics
Lisbon Cuts Property Tax on Primary Homes Starting 2027
Lisbon residents who own their primary homes will face a lower municipal property tax bill from 2027 under the revised rate set in the 2026 budget update.
How we reported this
The Lisbon City Council approved a reduction in the IMI rate for primary residences from 0.35 percent to 0.30 percent, effective January 2027. The change applies only to properties used as the owner's main home and excludes second homes or investment properties. City records show approximately 185,000 households will qualify for the adjustment.
Local budgets in Lisbon have faced pressure from rising maintenance costs for public services and energy contracts renewed in 2025. The council tied the rate cut to projected revenue from increased tourism levies collected in central districts during the past fiscal year. Policy analysts note the move follows similar adjustments in other Portuguese municipalities that recalibrated rates after the 2024 national housing law changes.
For a typical Lisbon apartment valued at 250,000 euros, the new rate lowers the annual IMI payment by 125 euros. A family in the Benfica parish with a 180,000-euro home will see a reduction of 90 euros. Renters will not receive direct relief, though local advocates note some landlords have passed prior IMI savings into lease negotiations.
Budget Figures and Eligibility Rules
The 2026 Lisbon Municipal Budget document allocates 4.2 million euros to offset the revenue loss from the IMI adjustment. Eligibility requires submission of a primary residence declaration by October 2026 through the city portal or at junta de freguesia offices. Households that fail to file will continue paying at the prior rate until the following year.
Payment deadlines remain unchanged, with the first installment due in April 2027. The legislation states that penalties for late filing will apply at the standard 5 percent surcharge rate already in municipal regulations.
Implementation Timeline
City staff will begin processing declarations in November 2026. Updated tax notices are projected to reach residents by February 2027. The government says the policy will remain in place for at least two years before the next scheduled review during the 2028 budget cycle.