Who Is Entitled to a Refund?
The taxpayers concerned are primarily landlords who own residential properties subject to tenancy agreements signed before the entry into force of the New Urban Lease Regime (NRAU), commonly referred to as “old-rent contracts”.
Since 1 January 2024, these contracts have benefited from an exemption from IMI, provided that the legal requirements were met and the corresponding application for recognition of the tax benefit was duly submitted.
Despite this, many property owners received IMI assessments in 2026 relating to the 2025 tax year, as though the exemption no longer applied. The Portuguese Tax Authority subsequently acknowledged that these assessments had been issued in error.
Is a New Exemption Application Required?
One of the main concerns raised by taxpayers was whether they were required to renew the exemption every year.
The clarification issued by the Portuguese Tax Authority is unequivocal:
- Taxpayers whose exemption was recognised in 2024 are not required to submit a new application each year.
- The exemption remains valid automatically, provided that the legal conditions applicable to the tenancy agreement continue to be met.
- There is no legal requirement to renew the exemption annually.
This clarification removes the uncertainty that led many property owners to believe they had lost their entitlement to the tax benefit.
How Will the Refund Be Made?
The method of reimbursement will depend on each taxpayer’s individual circumstances.
If the IMI has already been paid in full, the Portuguese Tax Authority will issue the corresponding refund.
Where the tax is being paid in instalments, any overpaid amount will automatically be deducted from the remaining instalments.
What Should Property Owners Do?
Although the Portuguese Tax Authority has announced that these cases will be corrected, taxpayers are advised to:
- Confirm that their property is indeed eligible for the exemption.
- Review the IMI tax assessments received.
- Monitor the refund process or any adjustments made to future instalments.
- If the issue is not resolved automatically, contact the Portuguese Tax Authority or seek professional tax advice to assess the situation.
A timely review may prevent unnecessary payments and help recover any amounts incorrectly charged.
Why Did This Happen?
Everything indicates that this was the result of an error in the processing of the IMI assessments relating to the 2025 tax year, affecting a specific group of taxpayers whose tax exemption had already been formally recognised.
Although the Portuguese Tax Authority has acknowledged the problem and undertaken to correct it, this situation highlights the importance of carefully reviewing all tax notifications, even where tax exemptions have already been granted.
While automation has significantly reduced administrative errors, it cannot entirely eliminate the possibility of exceptional processing mistakes.
Conclusion
The decision by the Portuguese Tax Authority to refund IMI that was incorrectly charged is welcome news for property owners benefiting from the tax relief applicable to old residential tenancy agreements.
Nevertheless, this case serves as a reminder that taxpayers should not assume every tax assessment is accurate. Reviewing tax notices and ensuring that recognised tax benefits have been correctly applied remains essential to avoid unnecessary payments and to safeguard taxpayers’ rights.
How Can Nominaurea Help?
At Nominaurea, we continuously monitor developments in Portuguese tax legislation and provide specialist support in reviewing IMI assessments and other tax liabilities, ensuring that all applicable tax benefits have been correctly applied.
We can help you to:
- Review your IMI tax assessments.
- Confirm whether you qualify for tax exemptions or other tax incentives.
- Identify potential errors made by the Portuguese Tax Authority.
- Assist with complaints, appeals or requests for correction where necessary.
- Provide tailored tax advice for both individuals and businesses.
Our mission is to ensure that you pay only the taxes legally due while benefiting from every tax relief available under Portuguese law.
