Annual maintenance costs consist of two categories:  

• Municipal / communal expenses
• Municipal property tax

Municipal / communal expenses

There are centralized electricity, water supply and sewage systems in Portugal.  The central gas supply exists mainly in the new buildings. If you prefer an older construction you will have to buy gas bottles (gas bottle supply is very well organized – you just have to call the nearest station and order a bottle delivery).

A 250 m² villa maintenance costs approximately 250 € / month, and a 70 m² apartment – 70 - 100 € / month, where:

• 25 € / month – satellite TV,
• 40-60 € / month – electricity (depends on air conditioning, heating device, etc. intensity of use),
• 10-20 € / month – water,
• 10-20 € / month – sewage,
• 20 € / month – telephone and Internet
• 50 € – 1 big gas bottle (enough for 2 month use by a family of four).

Both fixed costs for the connection (for example, a telephone line service will represent a fixed fee of 12 €, a satellite TV will cost 25 € / month), and real usege cost (water).

Please note that electricity supply and telephone contracts demand a Portuguese VATIN of the property owner.  

You can also make a real estate damage insurance which will add a certain value to the total property maintenance costs sum.

A contract with a property Maintenance Company is possible which will ensure cleaning, gardening, pool cleaning, building and its engineer systems maintenance in a proper state, as well as annual and monthly bills payment control.

Villas and apartments joining into condominiums allows to join the efforts for road, water system, sewage, gas and electricity systems repairs, fire safety provision, swimming pools and garden maintenance, 24-hour guard and video surveillance, garbage removal, cleaning, painting, insurance, post service, additional services (dry-cleaning, laundry) etc.  

In this case a villa annual maintenance is of 2500 - 5500 €, an apartment or a small semi-detached house -1000 - 2500 €.

Annual Municipal Tax - IMI

On becoming a property owner in Portugal, you will have to pay annually the Municipal Property Tax (Imposto municipal sobre os imóveis – IMI), applied to any kind of real estate property.

In March of every year the Tax service sends notifications about the necessity to pay the tax, which should be done during the month of April. If the tax value exceeds 250 €, it can be paid in two parts: one payment in April, and another in September. But you can get a tax exemption for a certain period of time. For this you need to show up in the local Finance Office during 30 days after the purchase and register a IMI exemption.  A necessary condition for the positive decision is a proof that a purchased property is destined for permanent residence. And this means that in all the documents you need to mention an address of this very property as a residence (in VATIN, in Social Security papers, in driving license, etc).

It is important to note that a tax exemption after a new property purchase can be given to any citizen (or any family) only two times during his / her life. The exemption period depends on the property price and can vary from 3 to 6 years.
The tax value depends on the property type and price. Generally every apartment’s cost is mentioned in the special registration books kept in the Property Register Office.    

Please pay attention that if you have bought a used apartment, you will need to register all the service contracts on your name (pay attention to the dates of the first bills to avoid paying previous owners’ debts). If the apartment is new you need to make new contracts for water, gas and electricity supply.

If you are not a EC citizen, please also remember that after a property purchase and during 2 months you need to inform SEF about your residence alteration, and if you have a residence permit, you will have to replace it with a new one referring a new address. Not performing these actions is punished with a fine.  

The IMI rate is 0,4% - 0,8% of the official property evaluation cost.
Each of 308 municipal units of Portugal (united in 18 bigger districts) is independent in choosing a tax rate.

Below follows an example of the tax rate in Algarve:

A bank account opening is recommended for all the above described expenses payment.