Introduction
Portugal’s property tax landscape is evolving again in 2026, especially regarding vacant or unused properties. With ongoing housing policy reforms and growing emphasis on activating unused housing stock, owners of properties that have been empty for extended periods may face significant tax changes.
Firstly, What is IMI?
The Imposto Municipal sobre Imóveis (IMI) is an annual property tax applied to all Portuguese real estate based on the property’s Valor Patrimonial Tributário (VPT). Rates typically range from 0.3% to 0.45% for urban properties, with specific exemptions and deductions possible.
New Focus on Vacant Properties
While a nationwide flat tax hike of 100%–300% hasn’t been implemented, municipalities have the authority to increase IMI on properties that:
- Have been vacant for over a year
- Are in ruins
- Are located in urban pressure zones
These higher rates are meant to discourage long-term vacancy and help improve housing supply.
How Lagos Is Applying IMI Rules in 2026
In Lagos, the municipality has already confirmed its IMI framework for 2026, which includes specific measures targeting vacant and under-used properties.
While the standard IMI rate for urban properties remains at the minimum legal level (0.3%), the municipality has the authority to apply a significantly higher IMI rate to properties classified as vacant (“devolutos”) or in a state of ruin.
For properties that have been unoccupied for more than one year, Lagos may apply up to three times the normal IMI rate, depending on the property’s classification and duration of vacancy. This effectively means that owners of long-term vacant properties could face IMI increases of up to 200–300% compared to the standard rate.
At the same time, Lagos is also encouraging active use of housing stock by offering IMI reductions for properties placed on the long-term rental market and other incentives for permanent occupation. The policy direction is clear: unused properties are becoming more expensive to hold, while occupied or rented properties are being actively supported.
What This Means for Property Owners
If you own property that could be classed as vacant:
- You might face significantly higher annual tax bills in some municipalities.
- It’s now more important than ever to review your property’s usage and tax status.
- Options such as leasing, rehabilitation, registration with local authorities, or selling could help avoid or reduce penalties.
Our Tips for Owners
- Confirm whether your property is officially declared as vacant with the local tax office.
- Consider putting the property on the rental market or enrolling it in a long-term lease to avoid higher tax brackets.
- Consult a tax professional to evaluate your IMI liabilities and optimisation strategies.
Conclusion
Portugal’s housing and tax reforms aim to make better use of existing residential stock, meaning property owners need to be proactive. With key changes rolling out in 2026, now is the time to check your IMI status and act accordingly.
