In Portugal, there is currently a public guarantee from the State to support young people up to 35 in purchasing their first permanent home. This measure was created to facilitate access to homeownership, particularly considering the difficulties in saving for the down payment required by banks.
The scheme works simply: the State acts as a guarantor for part of the mortgage, allowing the bank to finance up to 100% of the home's value, something that would normally not be possible. This way, young people can access credit without having to have such a high level of equity.
To benefit from this public guarantee, several conditions must be met. First, all borrowers must be between 18 and 35 years old and have tax residency in Portugal. Furthermore, they cannot currently own another residential property or have previously benefited from this measure. It is also required that the household's taxable income does not exceed the 8th IRS tax bracket.
Regarding real estate, the maximum transaction value is R$450,000, and the financing to be obtained must correspond to at least 85% of the purchase price. The state guarantee covers up to 15% of the property value, which, in many cases, allows the bank to grant credit for up to 100% of the home's value.
Even with this guarantee, the Bank of Portugal's rules continue to apply, particularly regarding the maximum loan burden: the value of the loan installments, plus other financial charges, cannot exceed 50% of the household's net income. The repayment term also depends on the borrower's age: those under 30 can take out loans for up to 40 years, while those between 30 and 35 have slightly shorter terms.
The guarantee is activated only in the event of default, protecting the bank from part of the principal owed. In addition to this measure, there are other benefits associated with first-time homebuyers under 35, such as exemption from IMT (Property Transfer Tax), Stamp Duty, and some registration fees.
The scheme is in effect and can be used in mortgage loan agreements signed until the end of 2026, subject to the participation of banks offering this product.
The beneficiaries of this measure are young people up to 35 years old who do not own their own home or who have not owned one in the last three years, as long as they are acquiring their first home for permanent residence.
If, for example, they already own a property or a fraction of it, the exemption is no longer valid. In the case of a couple, if only one of the members meets the requirements, the exemption will be granted only on the part of the property corresponding to the eligible beneficiary.
What about income?
To access the benefit, the buyer must have their own income and declare it on their Income Tax, that is, they cannot be a dependent. However, the exemption is not conditional on the value of this income, as the measure does not consider the buyer's financial capacity.
Instead, the Government set limits based on property value. Therefore, only house purchases up to 316,772 euros are completely exempt from IMT, corresponding to the 4th bracket of this tax. For properties between R$316,772 and R$633,453, the exemption is only valid up to the value of R$316,772, with ITBI being charged on the excess value. For properties above R$633,453, there is no exemption.
How to get the benefit?
At the time of purchase, when filling out the IMT Model 1 declaration, simply mark that you meet the requirements for exemption. If there are two buyers, each must complete their own declaration. The computerized system will automatically process the benefit.
In addition to the ITBI exemption, beneficiaries are also exempt from IOF and registration fees, charges paid at the time of the deed and mortgage, if there is real estate financing.
Conditions and exceptions
The exemption remains as long as the property remains the buyer's permanent home for the next six years. Otherwise, the benefit will be revoked and the tax must be paid to the Tax Authorities.
However, there are exceptions. The exemption is not lost in the following cases:
Sale of property.
Changes in the household, such as the birth of a child or a divorce.
Moving the workplace to a distance greater than 100 kilometers.
In these cases, the owner may stop living in the property, but cannot leave it unoccupied. The house must continue to be used for residential purposes, for example through rental.
In Portugal, there is currently a public guarantee from the State to support young people up to 35 in purchasing their first permanent home. This measure was created to facilitate access to homeownership, particularly considering the difficulties in saving for the down payment required by banks.
The scheme works simply: the State acts as a guarantor for part of the mortgage, allowing the bank to finance up to 100% of the home's value, something that would normally not be possible. This way, young people can access credit without having to have such a high level of equity.
To benefit from this public guarantee, several conditions must be met. First, all borrowers must be between 18 and 35 years old and have tax residency in Portugal. Furthermore, they cannot currently own another residential property or have previously benefited from this measure. It is also required that the household's taxable income does not exceed the 8th IRS tax bracket.
Regarding real estate, the maximum transaction value is R$450,000, and the financing to be obtained must correspond to at least 85% of the purchase price. The state guarantee covers up to 15% of the property value, which, in many cases, allows the bank to grant credit for up to 100% of the home's value.
Even with this guarantee, the Bank of Portugal's rules continue to apply, particularly regarding the maximum loan burden: the value of the loan installments, plus other financial charges, cannot exceed 50% of the household's net income. The repayment term also depends on the borrower's age: those under 30 can take out loans for up to 40 years, while those between 30 and 35 have slightly shorter terms.
The guarantee is activated only in the event of default, protecting the bank from part of the principal owed. In addition to this measure, there are other benefits associated with first-time homebuyers under 35, such as exemption from IMT (Property Transfer Tax), Stamp Duty, and some registration fees.
The scheme is in effect and can be used in mortgage loan agreements signed until the end of 2026, subject to the participation of banks offering this product.
May 5, 2025
