IMI Property Tax: Construction Values Increase in 2026
The IMI property tax applicable to newly built properties, reconstruction projects, alterations and property reassessments will increase in 2026 following an update to the official average construction value used to calculate the taxable property value (*Valor Patrimonial Tributário* – VPT).
Through Ordinance No. 471/2025/1 of 26 December, published in the Portuguese Official Gazette, the Government set the average construction value at €570 per square metre for the purposes of Article 39 of the Municipal Property Tax Code (*Código do Imposto Municipal sobre Imóveis – CIMI*), applicable throughout 2026.
This represents a 7% increase compared with the €532 value that had remained in force since 2023.
For the calculation of the taxable property value (VPT), Portuguese legislation requires an additional 25% legal uplift to be applied to the average construction value. As a result, the base value used in assessments increases from €665 to €712.50 per square metre, representing an increase of €47.50 per square metre.
This update will directly affect the taxable value of properties assessed from 1 January 2026 onwards, including:
- Newly constructed properties;
- Properties subject to extensions, alterations or reconstruction works;
- Property reassessment procedures.
As IMI is calculated by applying the municipal tax rate to the taxable property value (VPT), the increase may result in a higher tax burden for affected property owners.
It should be noted that IMI rates are established annually by each municipality within limits defined by law:
- 0.8% for rural properties;
- Between 0.3% and 0.45% for urban properties.
After three years without any adjustment to this parameter, the newly published revision reflects the continued increase in construction costs.
According to data released by Portugal's National Statistics Institute (INE), the construction cost index for new residential housing recorded a year-on-year increase of 4.5% in October.
Beyond its tax implications, this update may also influence other areas linked to property replacement values, including the adjustment of insured capital amounts and insurance premiums in home insurance policies, depending on the practices adopted by insurance providers.
Source: Observador Newspaper and the Portuguese Official Gazette
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