Inheritance tax in Portugal: exemptions, 10% rate, non-residents

In short: no inheritance tax, but a 10% stamp duty for anyone outside the close family

Portugal abolished inheritance and gift tax in 2004. In its place, a 10% stamp duty (Imposto do Selo, item 1.2 of the stamp duty table) is charged on assets located in Portugal that pass on death. The spouse, civil partner, children, grandchildren, parents and grandparents pay nothing. Siblings, nephews, friends and unmarried partners pay a flat 10%. Residence and nationality of the heir make no difference in Portugal, but they matter a great deal for the tax you may owe in your own country.

Who is exempt and who pays

Exempt (0%)

Article 6(1)(e) of the Stamp Duty Code (Código do Imposto do Selo) exempts transfers on death to:

→ the spouse or registered civil partner (união de facto)
→ descendants: children, grandchildren, adopted children
→ ascendants: parents, grandparents

The exemption covers every asset, real estate included, with no upper limit. It applies whether the heir lives in Porto, Manchester or Toronto.

Taxed at 10% (item 1.2)

Everyone else pays 10% on the value of the Portuguese assets they receive:

→ brothers and sisters, nephews and nieces, uncles, cousins
→ stepchildren and sons- or daughters-in-law
→ an unmarried partner whose união de facto was never registered
→ friends, carers, charities and any other legatee

There is no tax-free allowance and no progressive scale: 10% from the first euro, except for household items worth under 500 EUR.

The 0.8% myth

Many English-language websites state that heirs pay "0.8% stamp duty on property" on top of the 10%, or that exempt heirs still pay 0.8% on real estate. This is wrong. The 0.8% rate (item 1.1 of the stamp duty table) is charged on lifetime gifts and purchases of real estate. In an inheritance, property is only subject to item 1.2 (10%) and is fully exempt for the spouse, descendants and ascendants.

What is taxed, what is excluded and how assets are valued

Taxable assets and their value

→ Real estate in Portugal, at its VPT (valor patrimonial tributário), the tax value printed on the caderneta predial. The VPT is typically 30% to 60% of market value, which keeps the 10% bill low
→ Bank accounts and deposits held with Portuguese banks, at the balance on the date of death
→ Shares, bonds and fund units of Portuguese issuers, at market price or book value
→ Vehicles registered in Portugal, at a fixed tax value by age
→ Businesses, intellectual property, debts owed to the deceased

Excluded from stamp duty

→ Life insurance paid to named beneficiaries
→ PPR retirement savings plans and pension funds
→ Personal and household items worth less than 500 EUR
→ Anything located outside Portugal (see territorial scope below)

The deceased's debts (mortgage, unpaid taxes, funeral costs) are deducted from the declared estate.

Territorial scope: only assets located in Portugal

Where the asset is, not where the people are

Portuguese stamp duty is strictly territorial (article 4 of the Stamp Duty Code). It applies to assets situated in Portugal, whoever the deceased was and wherever the heirs live. It does not apply to assets situated abroad, even if the deceased was Portuguese and resident in Portugal.

→ A British retiree in the Algarve leaves a villa in Lagos and an ISA in London to a nephew: Portugal taxes the villa (10% of VPT) and ignores the ISA
→ A Portuguese emigrant in Luxembourg leaves a flat in Braga to her daughter: 0 in Portugal (child), and nothing in Portugal on her Luxembourg savings
→ A US citizen with no Portuguese assets dies in Portugal: no Portuguese stamp duty at all

Portugal grants no credit for foreign inheritance tax and has no inheritance tax treaties with the UK, the US or any other country. Relief from double taxation, where it exists, comes from the other country's rules.

How the tax is assessed: Modelo 1 within 3 months

The death declaration (participação do óbito)

→ Who files: the cabeça de casal, the head of the estate (usually the surviving spouse, otherwise the eldest child or the executor named in the will)
→ What: form Modelo 1 of the stamp duty with the list of assets and debts (relação de bens) and the identification and NIF of every heir
→ When: by the end of the third month after the death (article 26 of the Stamp Duty Code). Death on 10 March: file by 30 June
→ Where: online on the Portal das Finanças or at any tax office; a representative with a power of attorney can file it
→ Mandatory even when everyone is exempt: the declaration is what allows banks and the land registry to release the assets

Penalties, payment and who pays

→ Late filing: fine of 150 to 3,750 EUR, plus interest on any tax due
→ Assessment: the tax office calculates the duty and notifies each taxable heir; it can be paid in instalments above a certain amount
→ Who pays: each heir on their own share. In practice the estate settles the bill before the partition, and property cannot be registered in the heirs' names until the duty is paid or the exemption confirmed
→ Statute of limitations: the tax office can assess stamp duty for 8 years from the date of death, so an undeclared inheritance is a problem that does not go away

Worked examples

Spouse inherits everything

Ana's husband dies leaving their Lisbon flat (VPT 180,000 EUR), 40,000 EUR in the bank and a car.

Stamp duty: 0 EUR

Spouse exempt. Ana must still file Modelo 1 within 3 months and register the flat in her name (375 EUR at the Balcão das Heranças).

Sibling inherits 200,000 EUR VPT

Carlos leaves his sister a house in Coimbra with a VPT of 200,000 EUR (market value about 350,000 EUR).

Stamp duty: 20,000 EUR

10% of the VPT, not of the market value. No 0.8%. The sister must pay before the house can be registered in her name.

UK-resident child

James, living in Leeds, inherits his mother's flat in Faro (VPT 95,000 EUR). His mother lived in Portugal for 25 years.

Portugal: 0 EUR

Child exempt. UK inheritance tax depends on the mother's status, not on James's: as she was no longer a long-term UK resident, the Faro flat is outside UK IHT.

Estimate your own case with the Portugal inheritance tax calculator.

UK heirs and UK-connected estates

UK inheritance tax is charged on the estate, not on the heir

Unlike Portugal, the UK taxes the deceased's estate, at 40% on everything above the 325,000 GBP nil-rate band (frozen until at least April 2030), with an extra residence nil-rate band of up to 175,000 GBP when a home passes to children or grandchildren, and a full exemption for the spouse or civil partner. Whether Portuguese assets fall into the UK net depends on the deceased's residence history, not on where the heir lives.

→ Since 6 April 2025 the old domicile test has been replaced by a residence test. A long-term UK resident is someone who was UK tax resident in at least 10 of the previous 20 tax years. Their worldwide assets, Portuguese property included, are within UK IHT
→ Someone who is not a long-term UK resident is taxed only on UK-situated assets. Their Portuguese villa or bank account is outside UK IHT
→ The tail: a person who leaves the UK stays a long-term resident for 3 to 10 further tax years depending on how long they lived there (3 years after 10 to 13 years of residence, rising by one year for each extra year, up to 10). A British retiree who moved to the Algarve in 2024 after a lifetime in the UK remains within worldwide IHT until around 2034
→ Double taxation: there is no UK-Portugal inheritance tax treaty. HMRC grants unilateral relief: Portuguese stamp duty paid on Portuguese assets is credited against the UK IHT attributable to those assets. For exempt heirs there is nothing to credit, and the UK charge stands in full

Example: a widower who lived in the UK until 2023 and now lives in Cascais dies in 2026 leaving a 600,000 EUR estate (Cascais flat plus UK pension savings) to his daughter. Portugal: 0. UK: he is still a long-term resident under the tail rule, so the whole estate is assessed; roughly 40% on the value above the available nil-rate bands is payable to HMRC, with no Portuguese tax to credit.

US, French and other foreign heirs

United States

The US federal estate tax is charged on the worldwide estate of US citizens and US-domiciled persons, but only above a basic exclusion of 15,000,000 USD per person in 2026 (made permanent by the 2025 One Big Beautiful Bill Act and indexed for inflation). Few estates with Portuguese assets reach that level. There is no US-Portugal estate tax treaty; the 1994 income tax convention does not cover estates. Portuguese stamp duty paid can generally be claimed as a foreign death tax credit on Form 706. A US heir receiving a Portuguese inheritance has no US income tax to pay on it, but must report foreign gifts and bequests above 100,000 USD on Form 3520 and any Portuguese bank accounts on the FBAR.

France, Germany, Spain and other EU heirs

Most EU countries tax the heir according to their own residence. France taxes an heir who lived there 6 of the last 10 years on everything received, Portuguese assets included, after an allowance of 100,000 EUR per child, with a credit for tax paid in Portugal. Germany and Spain follow similar residence-based rules with their own allowances. Portugal has no inheritance tax treaty with any of them; the accord with France of 3 June 1994 only concerns bequests to the two States and their public bodies. Our French-language guide covers the Franco-Portuguese case in detail.

Which law applies: EU Succession Regulation 650/2012

Civil law follows habitual residence

Since 17 August 2015 the EU Succession Regulation ("Brussels IV") makes the law of the deceased's last habitual residence govern the whole estate, wherever the assets are. A British or American expat living in Portugal is therefore subject by default to Portuguese forced heirship: the spouse, children and parents are entitled to a reserved share (legítima) of one half or two thirds of the estate that a will cannot override.

The Regulation decides who inherits. It has no effect on tax, which each country charges under its own rules.

Choice of national law and its tax consequences

Article 22 of the Regulation lets you choose the law of your nationality in your will. A UK or US national resident in Portugal can restore full testamentary freedom this way. The UK and Ireland are not bound by the Regulation, but Portuguese authorities will still apply the choice to Portuguese assets. Two tax points to keep in mind:

→ Choosing English or New York law does not change Portuguese stamp duty: a bequest to a friend is still taxed at 10%
→ Leaving more to a non-exempt beneficiary (partner, stepchild, charity) than Portuguese forced heirship would have allowed increases the Portuguese tax bill

See Portuguese wills for foreigners for the wording of the clause.

Selling inherited property later: capital gains

The VPT at death becomes your acquisition cost

Stamp duty is not the end of the story. When an heir sells inherited Portuguese real estate, the gain is subject to Portuguese IRS (income tax). The acquisition value is the value used for stamp duty purposes, that is the VPT at the date of death (article 45 of the IRS Code), not the market value. Because the VPT is low, the taxable gain on sale can be large.

→ Example: flat inherited with a VPT of 95,000 EUR, sold two years later for 250,000 EUR. Gain: 155,000 EUR less selling costs and documented improvements
→ Residents and, since 2023, non-residents alike include 50% of the gain in their taxable income at progressive rates
→ UK and US heirs may also owe capital gains tax at home on the same sale, with a credit for Portuguese tax under the respective income tax treaties
→ Requesting a VPT revaluation before the death, or accepting a higher declared value, is sometimes used to raise the acquisition cost; take advice, as it can increase IMI and, for non-exempt heirs, the stamp duty

Can you avoid inheritance tax in Portugal?

What works

→ Leave assets to exempt relatives. Spouse, children, grandchildren and parents pay nothing, so most Portuguese estates are already tax-free
→ Register a união de facto. An unmarried partner becomes exempt once the partnership is formally recognised (after two years of cohabitation, with a declaration at the parish council); without it, the partner pays 10%
→ Life insurance and PPR pass to named beneficiaries outside the taxable estate, whoever they are
→ Marry. Blunt, but a spouse is exempt and a long-term partner is not

What does not work

→ Lifetime gifts to non-relatives are taxed at the same 10%, plus 0.8% on real estate, so gifting early saves nothing in Portugal
→ Moving to Portugal does not shake off UK IHT for up to 10 years (tail rule), nor French, German or US taxation based on the heir's residence or the deceased's citizenship
→ Choosing your national law in a will changes who inherits, not what Portugal taxes
→ Not declaring: banks and the land registry will not release assets without the Modelo 1, and the tax office has 8 years to assess

Practical steps for non-resident heirs

1. Get a Portuguese tax number (NIF) for every heir

At any tax office, at a Portuguese consulate, or through a lawyer or fiscal representative
Heirs resident outside the EU and EEA (UK, US, Canada, Australia) must appoint a fiscal representative in Portugal or opt in to electronic notifications on the Portal das Finanças

2. Gather and legalise documents

Portuguese death certificate (certidão de óbito, 10 EUR on Civil Online) or transcription of a foreign death certificate at the consulate
Birth and marriage certificates: foreign documents need an apostille (Hague Convention) and a certified Portuguese translation
Certificate from the Central Registry of Wills (Registo Central de Testamentos) confirming whether a Portuguese will exists; foreign wills must be apostilled and translated

3. Sign a power of attorney if you cannot travel

Signed at a Portuguese consulate, or before a local notary and apostilled, in favour of a Portuguese lawyer or a trusted relative
It should expressly cover the death declaration, the deed of heirs, the partition, registrations and bank matters

4. File Modelo 1 by the end of the third month

Filed by the cabeça de casal with the full list of Portuguese assets and debts
Keep the stamped copy: banks, the land registry and foreign tax authorities will ask for it

5. Deed of heirs, partition and registration

Balcão das Heranças (civil registry one-stop desk): 150 EUR for the deed of heirs alone, 375 EUR with property registration, 425 EUR with the partition included
Pay any stamp duty assessed, then register property, transfer vehicles and release bank accounts
Full procedure in our Portuguese inheritance law guide; bank and tax follow-ups in finances of the deceased

6. Declare at home

Check whether your own country taxes the inheritance (UK: deceased's long-term residence; France, Germany, Spain: heir's residence; US: citizenship and Form 3520 reporting)
Keep proof of Portuguese stamp duty paid to claim any credit

Frequently asked questions

Do you pay tax on inheritance in Portugal?

Portugal abolished inheritance tax in 2004. What remains is a 10% stamp duty (Imposto do Selo) on assets located in Portugal. The spouse or civil partner, children, grandchildren, parents and grandparents are fully exempt. Siblings, nephews, unmarried partners not registered as união de facto and unrelated beneficiaries pay 10%.

Is there inheritance tax between spouses in Portugal?

No. A surviving spouse or registered civil partner (união de facto) pays no stamp duty on anything inherited in Portugal, including real estate. The death must still be declared to the tax office (Modelo 1) within three months.

Do non-residents pay inheritance tax in Portugal?

Non-residents are treated exactly like residents. Stamp duty depends only on where the asset is located and on the family relationship: a child living in London or New York inherits a Lisbon flat tax-free in Portugal, while a sibling pays 10% wherever they live. The heir may still owe inheritance or estate tax in their own country under that country's rules.

Can I move to Portugal to avoid inheritance tax?

Moving to Portugal removes Portuguese tax only for assets left to close family, who are exempt anyway. It does not automatically remove your home country's tax: the UK keeps taxing worldwide assets of former long-term residents for up to 10 years after they leave, France taxes heirs who lived there 6 of the last 10 years, and the US taxes its citizens on their worldwide estate regardless of residence.

How is property valued for inheritance tax in Portugal?

Real estate is valued at its VPT (valor patrimonial tributário), the tax value shown on the caderneta predial, which is usually well below market value. Bank balances count at the date of death, listed shares at market price and vehicles at a fixed tax value by age. Debts of the deceased are deducted.

Is there a 0.8% stamp duty on inherited property in Portugal?

No. The 0.8% rate (item 1.1 of the stamp duty table) applies to lifetime gifts and purchases of real estate, not to inheritances. In an inheritance, property is only subject to the 10% rate of item 1.2, and not at all when the heir is the spouse, a descendant or an ascendant. Many English-language sites get this wrong.

What is the deadline to declare an inheritance in Portugal?

The head of the estate (cabeça de casal) must file the death declaration and asset list (Modelo 1 of the stamp duty) with the Portuguese tax office by the end of the third month after the death (article 26 of the Stamp Duty Code), even if every heir is exempt. Late filing carries a fine of 150 to 3,750 EUR.

Will I pay UK inheritance tax on property in Portugal?

UK inheritance tax is charged on the deceased's estate, not on the heir. Since 6 April 2025 it depends on whether the deceased was a long-term UK resident (resident in 10 of the last 20 tax years): if so, worldwide assets including Portuguese property fall within UK IHT at 40% above the 325,000 GBP nil-rate band; if not, only UK-situated assets are taxed. Portuguese stamp duty paid on the same assets can be credited under unilateral relief.

Official sources

Where to check this information

Information checked in September 2026. Foreign thresholds and Portuguese fees change; always confirm with the official source. For an estate with assets in two countries, advice from a lawyer or tax adviser familiar with both systems is strongly recommended.

Inheritance tax in Portugal: the 10% stamp duty, exemptions and rules for non-residents