European property tax comparison for buyers

Where Portugal wins on tax, and where it doesn’t

Buying property in Europe triggers four separate tax events, and they move independently of one another.

What it costs to buy. What it costs to hold, every year, for as long as you own it. What it costs on the income it generates, or on your income if you relocate. And what it costs to pass on.

Most comparisons published in this market cover the first one and stop. It is the most visible, the most quoted, and — over any holding period longer than about five years — frequently the smallest of the four.

Portugal’s position across the four is unusual, and stating it plainly is more useful than arguing a case:

Middling to buy. Cheapest in Europe to hold. Expensive on income. Free to pass on.

That one line contains the entire decision. What follows sets out the evidence for it, jurisdiction by jurisdiction, including the cases where Portugal is the wrong answer.

The comparison

Rates are indicative and subject to conditions, thresholds, regional variation, and exemptions not captured in a table. The detail below matters more than the summary.

Cost to buy

Portugal raised this axis against itself. From 1 September 2026, under Decree-Law No. 97/2026, buyers who are not Portuguese tax residents pay a flat 7.5% IMT on residential property with no exemptions or reductions, plus 0.8% stamp duty — roughly 9% to 10% all in with notary, registration, and legal fees. A partial refund is available where the buyer becomes tax resident within two years or lets the property under moderate-rent conditions.

The United Kingdom is the most expensive in Europe for a non-resident. Stamp duty stacks a 5% additional dwelling surcharge and a 2% non-resident surcharge onto standard rates, reaching 19% above £1.5 million. Corporate and trust purchases are charged at a flat 17%, or 19% where the entity is non-resident. On a £4 million purchase that produces roughly £674,000 — an effective rate near 17%, payable at completion.

Italy is the cheapest and the most misread. Registration tax is 2% for a qualifying main residence and 9% otherwise — but where an individual buys from a private seller, it is calculated on cadastral value rather than purchase price, which frequently produces a far lower effective cost than the headline suggests. New-build purchases from developers attract VAT instead, and the mechanism does not apply to every transaction type.

France runs notaire fees and transfer duties at roughly 7% to 8% on existing property. Spain applies regional ITP of roughly 6% to 10% on resale, with Andalusia at 7%, or 10% VAT plus stamp duty on new build. Greece is lowest at around 3%, with VAT on certain new builds.

Cost to hold

This is where the gap opens, and where Portugal wins decisively.

Portugal has no general wealth tax. AIMI applies only to Portuguese residential property and building land above €600,000 per person, or €1.2 million for a married couple filing jointly, at 0.7% to 1.5%. Critically, it is assessed on VPT — the tax-assessed value — rather than market value, which for prime property is frequently a fraction of what was paid. IMI adds 0.3% to 0.45% of VPT, set municipally.

Investment portfolios, business holdings, art, precious metals, and vehicles fall entirely outside Portuguese wealth taxation.

France taxes real estate specifically, and nothing else. The IFI applies where net taxable real estate exceeds €1.3 million per fiscal household, at 0.5% to 1.5%, with the scale applying from €800,000 once the threshold is crossed. On €5 million of net French property that is roughly €35,700 every year — around €357,000 over a decade, before taxe foncière and taxe d’habitation on second homes.

The structural point: a €5 million bond portfolio attracts no French wealth tax while a €5 million Paris apartment does. The charge is on the form your wealth takes, not on the wealth.

Spain applies two layers. A regional wealth tax on worldwide assets for residents and Spanish assets for non-residents, above a €700,000 allowance, at 0.2% to 3.5% — with Madrid granting full relief and Andalusia having abolished it. Then the national Solidarity Tax on Large Fortunes above €3 million, at 1.7% to 3.5%, which regional relief cannot eliminate. A resident in Madrid or Andalusia paying no regional wealth tax pays the Solidarity Tax in full.

Switzerland levies cantonal and communal wealth tax on worldwide net assets, with Geneva among the higher-taxing cantons, and applies imputed rental value — owner-occupiers are taxed on notional rent they never received. There is no equivalent in any other jurisdiction here.

The United Kingdom is comparatively light annually — council tax, with empty-property premiums in many authorities — unless residential property is held through a company above £500,000, when the Annual Tax on Enveloped Dwellings applies.

Italy taxes residents’ foreign real estate and financial assets through IVIE and IVAFE unless the flat tax regime applies. Greece levies ENFIA.

Over a ten-year hold on a substantial position, the difference between Portugal and France, Spain, or Switzerland on carrying cost alone runs to seven figures. That is not a rounding error against expected appreciation; it compounds against you every January.

Cost on income

Portugal’s weakest axis, and it should be stated without softening.

Portuguese tax residents pay progressive rates from roughly 13.25% to 48%, with a solidarity surcharge above €80,000. Non-resident rental income is taxed at a flat 25% on net residential lettings, 28% on non-residential. Non-residents disposing of property are taxed on 50% of the gain at progressive rates, with mandatory aggregation of worldwide income to establish the applicable band — the former flat 28% rate was revoked in 2023 and much published guidance is still wrong about this.

IFICI, which replaced NHR, will not help most buyers. It offers a flat 20% on qualifying Portuguese employment and self-employment income and an exemption on most foreign income for ten years, but it requires a qualifying degree at EQF level 6 or above and a designated high-skilled activity performed in Portugal each year. Pension income is excluded entirely.

Against that:

Italy’s flat tax replaces ordinary taxation on all foreign income with a single annual payment, raised to €300,000 from 1 January 2026, for up to fifteen years, with an additional annual charge per included family member. No minimum investment, no work requirement, and eligibility requires only not having been Italian tax resident for nine of the previous ten years. At an Italian top rate near 43%, it breaks even at roughly €1 million of annual foreign passive income — below that it costs more than ordinary taxation, and well above it, it is extraordinarily efficient. Those who opted in before January 2026 retain their earlier rate.

Greece runs a €100,000 annual flat charge on foreign income for up to fifteen years, conditional on investing €500,000 in Greece within three years — and separately a flat 7% on all foreign-source income for foreign pensioners transferring tax residence, which Portugal explicitly does not match.

Spain’s Beckham regime applies a flat 24% to Spanish employment income up to €600,000 for six years, with foreign income largely outside the Spanish net and wealth tax limited to Spanish assets. Its eligibility is considerably broader than IFICI’s, and it was amended years ago to exclude professional sportspeople.

Switzerland offers lump-sum taxation in most cantons to qualifying non-working foreign residents.

For a relocating individual with substantial income, Portugal is the least competitive jurisdiction in this comparison. That is a straightforward fact and no amount of framing changes it.

Cost to pass on

Portugal’s strongest axis, and the one most often left out of comparisons entirely.

Portugal has no inheritance tax. Gratuitous transfers attract stamp duty at 10% plus 0.8% on real estate, and transfers to a spouse, descendants, and ascendants are exempt. For a family passing property to children, the Portuguese succession cost in the direct line is effectively nil.

The United Kingdom is the opposite. UK-situs assets remain within the scope of inheritance tax at 40% permanently, regardless of where the owner lives. A £4 million London property carries roughly £1.6 million of exposure before reliefs, on an asset that confers no residence rights. Since April 2025, inheritance tax also reaches non-UK assets once an individual has been UK resident for ten of the last twenty tax years, with a tail of up to ten years after departure.

Italy taxes at 4% to 8% by relationship with substantial thresholds for close family — and during the flat tax regime, foreign-situs assets fall outside Italian inheritance and gift tax entirely, which is the regime’s least-discussed and often most valuable feature.

Spain’s inheritance tax is regional, ranging from near-total relief for direct-line heirs in Andalusia and Madrid to materially expensive elsewhere. France applies succession duties by relationship band.

One provision applies across the EU jurisdictions and is chronically underused. Portugal, France, Spain, Italy, and Greece all apply forced heirship in domestic law, and all sit within the EU Succession Regulation, which permits an individual to elect the law of their nationality to govern their entire estate — and that choice is not limited to EU law. The election must be made expressly in a valid disposition; a standard notarial will does not achieve it.

Where Portugal wins

A family holding real estate long-term and passing it to children. Low carry plus nil succession in the direct line is the best combination available in Western Europe.

Wealth that is predominantly financial rather than property. Portugal taxes neither. France taxes only real estate, which for a property-heavy family is worse; Spain and Switzerland tax both.

Buyers who want genuine access. Portugal places no restriction whatever on foreign ownership — no nationality test, quota, or permission. Switzerland’s Lex Koller framework largely prevents non-resident foreigners from acquiring residential property in Zurich or Geneva, meaning Europe’s two most expensive markets are, for most international buyers, not markets at all.

Buyers who want optionality on residency without relocating. Portugal’s investment residence permit requires an average of seven days a year, the lowest in Europe. Spain closed its program entirely in April 2025.

Where Portugal loses

A relocating individual with large earned or offshore income. Italy’s flat tax, Spain’s Beckham regime, and Switzerland’s lump-sum arrangements all beat Portugal’s progressive rates. IFICI is narrower than its marketing suggests.

A retiree. Greece’s 7% on foreign pension income has no Portuguese equivalent, and IFICI excludes pensions outright.

Anyone whose acquisition cost matters most. Italy’s cadastral mechanism and Greece’s ~3% transfer tax both beat Portugal’s 7.5% flat rate for non-residents.

Buyers seeking residency through property. Greece is the only jurisdiction here still offering it. Portugal closed that route in October 2023.

Anyone needing regulatory stability. Portugal has changed rules affecting foreign buyers four times in three years — the Golden Visa property closure, the NHR replacement, the citizenship period doubling to ten years in May 2026, and the September 2026 IMT change. The current position is genuinely favorable and should not be underwritten as permanent.

How to use this

Establish your holding period first. Under five years, acquisition cost dominates and Italy or Greece look better. Over ten, carrying cost and succession dominate and Portugal moves well ahead.

Establish what your wealth consists of. Property-heavy positions are penalized in France. Diversified positions are penalized in Spain and Switzerland. Neither is penalized in Portugal.

Establish whether you will relocate. If you will remain non-resident, income taxation barely matters and the comparison reduces to acquisition, carry, and succession. If you will relocate, income taxation may override everything else.

Establish your succession objective. If the property is intended to pass to children, Portugal’s nil direct-line position and the EU Succession Regulation election together produce an outcome most alternatives cannot match.

Then take advice in both jurisdictions. Everything above is a framework for asking better questions, not a substitute for modeling an actual position. Treaty provisions, reliefs, thresholds, and individual circumstances change every one of these outcomes.

How Luznur Capital works

Luznur Capital, a trading name of Lusomena Investments, Unipessoal Lda., is a real estate brokerage and advisory firm licensed by IMPIC under AMI 22354 and a registered member of APEMIP.

Modeling all four costs, not the headline one. What a property costs to acquire is one of four numbers, and over a realistic holding period usually the smallest. The comparison becomes useful when carry, income, and succession are modeled against a client’s own jurisdiction.

Sequencing the residency question before the property one. Whether a client will be Portuguese tax resident changes the acquisition rate, the income position, and sometimes the region. That is settled with legal and tax partners before viewings.

Coordination rather than replacement. Portuguese legal and tax partners work alongside a client’s existing advisors elsewhere, so the Portuguese position is designed around the home one rather than proposed in isolation.

Saying when Portugal is the wrong answer. For a client optimizing purely for income taxation or acquisition cost, other jurisdictions are better, and this article names which. Where the honest answer is elsewhere, that is the answer.

FAQ

Which European country has the lowest property taxes?
It depends which of four tax events you mean. Greece and Italy are cheapest to buy, Portugal is cheapest to hold annually, the Gulf states and Italy’s flat tax regime are most efficient on income for large offshore portfolios, and Portugal has no inheritance tax in the direct line. No jurisdiction wins on all four.

Does Portugal have a wealth tax?
No general wealth tax. AIMI applies only to Portuguese residential property and building land above €600,000 per person, or €1.2 million for a married couple, at 0.7% to 1.5%, and is assessed on the tax-assessed value rather than market value. Financial assets, investments, and business holdings fall outside it entirely.

How much does France’s wealth tax cost?
The IFI applies where net taxable real estate exceeds €1.3 million per household, at 0.5% to 1.5%, with the scale applying from €800,000 once the threshold is crossed. On €5 million of French property that is roughly €35,700 annually. It reaches real estate only — an equivalent financial portfolio attracts nothing.

What does it cost to buy property in Portugal as a non-resident?
From 1 September 2026, a flat 7.5% IMT with no exemptions or reductions, plus 0.8% stamp duty, with notary, registration, and legal fees bringing the total to roughly 9% to 10% of price. A partial refund is available if the buyer becomes Portuguese tax resident within two years.

Why is the UK expensive for non-resident property buyers?
Stamp duty stacks a 5% additional dwelling surcharge and a 2% non-resident surcharge onto standard rates, reaching 19% above £1.5 million. Corporate purchases are charged at 17%, or 19% for non-resident entities. Separately, UK-situs assets remain within the 40% inheritance tax net permanently regardless of where the owner lives.

Does Portugal have inheritance tax?
No. Gratuitous transfers attract stamp duty at 10% plus 0.8% on real estate, and transfers to a spouse, descendants, and ascendants are exempt. For a family passing property to children the succession cost in the direct line is effectively nil, which is the strongest single feature of the Portuguese position.

Is Italy’s flat tax better than Portugal’s IFICI?
For large offshore income, considerably. Italy’s regime replaces ordinary taxation on all foreign income with €300,000 annually for up to fifteen years, with no minimum investment or work requirement, and exempts foreign assets from Italian wealth and inheritance tax while it applies. It breaks even around €1 million of annual foreign passive income. IFICI requires a qualifying degree and a designated high-skilled activity in Portugal and excludes pension income entirely.

Which country is best for retirees on tax?
Greece applies a flat 7% to all foreign-source income for foreign pensioners transferring tax residence, for up to fifteen years. Portugal has no equivalent since NHR closed, and IFICI excludes pension income. Treaty provisions vary, particularly for government and civil service pensions, and require specific advice.

Can I choose which country’s inheritance law applies to my property?
Within the EU, generally yes. The EU Succession Regulation permits an individual to elect the law of their nationality to govern their entire estate, displacing default forced heirship rules, and that choice is not limited to EU law. The election must be made expressly in a valid disposition — a standard notarial will does not achieve it.

Which tax matters most when buying property abroad?
It depends on holding period. Under about five years, acquisition cost dominates. Over ten years, annual carrying cost and succession usually exceed it by a wide margin. Most published comparisons cover acquisition only, which is why buyers frequently optimize for the smallest of the four numbers.

Is this article tax advice?
No. It presents general information as of September 2026 across multiple jurisdictions, summarized at a level that necessarily omits conditions, thresholds, reliefs, and regional variation. Outcomes depend on individual circumstances and require qualified advice in every relevant jurisdiction.

DISCLAIMER

Important information

This article is provided for general information only and reflects publicly available regulatory and tax information as of September 2026. It does not constitute tax, legal, investment, or financial advice in any jurisdiction, and is not a recommendation regarding any property, jurisdiction, structure, or transaction.

Tax regimes in every jurisdiction referenced are summarized at a general level and necessarily omit conditions, thresholds, exemptions, reliefs, regional and cantonal variation, treaty provisions, and transitional rules. Rates shown in the comparison table are indicative only and will not apply to many transactions. Outcomes depend on individual circumstances including residence, domicile, nationality, income composition, marital status, asset structure, and holding period.

Spanish tax treatment varies significantly by autonomous community; Swiss treatment varies by canton and depends on residence permit category; Italian registration tax depends on the parties and the property type; and United Kingdom treatment changed materially in April 2025. Provisions referenced, including Decree-Law No. 97/2026, Organic Law No. 1/2026, the IFICI regime, Article 24-bis of the Italian Income Tax Code, and Regulation (EU) No 650/2012, are subject to amendment. Portugal has revised rules affecting foreign buyers and residents repeatedly since 2023.

Illustrative figures are calculated on stated assumptions and do not account for reliefs, allowances, deductions, treaty relief, or the composition of an individual’s holdings. They are not a substitute for modeling an actual position.

Luznur Capital is a trading name of Lusomena Investments, Unipessoal Lda., a real estate brokerage and advisory firm licensed by IMPIC under AMI 22354 and a registered member of APEMIP. It is not a law firm or tax practice, and does not advise on the law of any jurisdiction other than through its qualified Portuguese partners. Independent professional advice must be obtained in each relevant jurisdiction before any acquisition, structuring, or relocation decision.

General information as of September 2026, summarized across multiple jurisdictions and necessarily omitting conditions, thresholds, reliefs, and regional variation. Rates shown are indicative and will not apply to many transactions. Not tax or legal advice — obtain qualified advice in each relevant jurisdiction. Luznur Capital (Lusomena Investments, Unipessoal Lda., AMI 22354).

Modeling the four numbers

Acquisition cost is the one most buyers compare and, over a realistic holding period, usually the smallest. Carry and succession are where the difference between jurisdictions compounds.

Luznur Capital, a trading name of Lusomena Investments, Unipessoal Lda. (AMI 22354), advises international buyers and investors across Lisbon, Cascais, Sintra, the Setúbal peninsula, Comporta and the Alentejo, the Algarve including Quinta do Lago and Tavira, the Silver Coast, Porto and Braga, the Douro and the Minho, and Madeira, including off-market opportunities, with coordinated legal, tax, and immigration partners — and on mandates of any size in any region of mainland Portugal and the islands.

To discuss a specific mandate, contact info@luznurcapital.com.