Under 35? Portugal’s New Scheme Could Help You Purchase Your First Property

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Last updated on June 26, 2024 | Est. Reading Time: 2 minutes

Portugal has introduced a new scheme aimed at helping young people purchase their first home. Unlike many countries that offer programs specifically for first-time buyers, Portugal’s initiative focuses on buyers under the age of 35.

Traditionally, borrowers in Portugal need at least a 10% deposit, as credit institutions can finance a maximum of 90% of the property’s value for a primary residence. However, many young people struggle to save this initial deposit, hindering their ability to enter the property market.

The new government scheme addresses this challenge by providing up to 15% of the property value as a guarantee. This allows eligible buyers to purchase a property without the need for a substantial upfront deposit.

Sound good? Take a look at these properties for sale in Portugal

Naturally, there are some rules regarding this scheme.

Key eligibility criteria and benefits include:

  1. Age requirement: Borrowers must be between 18 and 35 years old.
  2. Income limit: Borrowers’ income must not exceed the 8th income tax bracket.
  3. First-time ownership: Applicants must not own any other residential property.
  4. Property value cap: The transaction value cannot exceed €450,000.
  5. One-time use: Borrowers can only use this scheme once.

Does this apply to both non-residents and residents? According to Doutor Finanças, the scheme is for those that have their tax domicile in Portugal.

Additional Tax Incentives

Additionally, young buyers can benefit from tax incentives:

  • IMT (property transfer tax) exemption for properties up to €316,722.
  • Partial IMT exemption for properties valued between €316,722 and €633,453.
  • Stamp Duty exemption under the same conditions as the IMT exemption.
  • Exemption from certain fees associated with the purchase.

This initiative aims to make homeownership more accessible for young Portuguese residents, addressing the common hurdle of saving for a deposit while also providing tax benefits to further support first-time buyers.

The scheme is expected to come into effect on August 1st, potentially opening up new opportunities for young people in Portugal’s property market.