Technical article

Portugal and Italy: Buying as a Foreigner, the New Transfer Tax, and the Heirs

Decree-Law 97/2026, dated 20 May 2026, sets a flat 7.5% transfer tax on a non-resident buying a home.

By Neil Solomon · 4 min read

Picture a retired couple from Canada who are choosing between a flat in Portugal and a house in Italy. They have one daughter, who lives in the UK. These are examples, not a forecast. Two questions come first. What does a foreign buyer own, and what would the daughter pay?

Portugal

Portugal has no outright ban on foreign buyers. The limits sit in tax and licensing. Golden visas for property ended in October 2023, according to one property-law guide.

The newer rule is a tax. Decree-Law 97/2026, dated 20 May 2026, sets a flat 7.5% transfer tax on a non-resident buying a home. It is refundable in two cases. The buyer becomes tax resident within two years. Or the buyer lets the home at a rent of up to EUR 2,300 a month (approximately US$2,500), lets it within six months, and keeps it let for 36 months in the first five years. The refund claim is due within six months. The official gazette is the source, and a secondary site gives 25 May 2026 as the start date for the transfer tax.

Other costs are stamp duty of 0.8% of the price and notary and registry fees of roughly EUR 1,000 to 1,500, from the same guide. The same guide (tier U) gives a yearly municipal tax of 0.3% to 0.45% of tax value and a state surcharge of 0.7% that starts above EUR 600,000 per person. A company based in a listed low-tax territory pays 7.5% a year in municipal tax, per the tax portal's statute text, and the rule does not apply to individuals.

Italy

Citizens of the EU, Norway, Iceland, Liechtenstein and Switzerland meet no limits. A non-EU citizen who has lived in Italy under three years needs a valid residence permit, the Italian foreign ministry guide says. Buying a second home from a private seller costs 9% registration tax, plus EUR 50 and EUR 50 in mortgage and cadastral tax. A notary charges 1% to 2.5%. An agent charges 2% to 5% plus 22% value-added tax.

The yearly municipal tax on a home that is not a main home has a basic rate of 0.86%, and towns may raise or lower it. A non-resident owner pays no separate wealth tax on the home. Garbage tax may also apply.

Side by side

The heirs

In Portugal the stamp duty on an inheritance is 10%, plus 0.8% on a gift of property. Spouse, children and parents are exempt, so a child heir pays none on the home, though the exempt must still declare. The head of the family tells the tax office of the death, the heirs and the assets by the end of the third month. PwC states the rates. A Portuguese tax-advice site (tier U) gives the family exemption.

In Italy the tax is 4% on value above EUR 1 million per heir for spouse and children. Siblings pay 6% above EUR 100,000. Other relatives pay 6% and others 8%. Real estate adds a 2% mortgage tax and a 1% cadastral tax, 3% in all, according to one secondary site (tier U). Since 1 January 2025 the heir works out the tax and pays within 90 days of filing the return.

Both countries protect children by law. A parent in either place may not be free to leave the home to anyone.

If an heir sells

One guide (tier U) says a Portuguese heir who wants to sell must first register the home in the heirs' names at the Land Registry. The gain is taxed on 50% of its size at rates from 12.5% (PwC) or 13.25% (another guide) up to 48% in 2026, the rate set by worldwide income. In Italy the tax code leaves out property acquired by succession from the five-year rule, so selling an inherited home is not taxed as a gain. The Italian tax agency said so in a 2018 ruling.