Tax benefits in IMT under portuguese tax law: tax justice, youth housing and corporate restructuring

Abstract

The Municipal Tax on Onerous Transfers of Real Estate (IMT) plays a central role in Portuguese real estate taxation, simultaneously constituting a significant source of public revenue and an instrument for regulating the market.

The exemption regime under IMT – particularly those applicable to young buyers of primary and permanent housing, acquisitions for resale, and business restructuring operations under Article 60 of the Tax Benefits Statute – highlights the tension between the principles of legality and ability to pay, on the one hand, and the pursuit of extra-fiscal economic and social objectives, on the other.

Starting from the dogmatic framework of IMT and the concept of tax exemption, the main special regimes are analyzed, articulating legislation, doctrine, and administrative and judicial case law, with a special focus on the decisions of the Tax Authority, the Supreme Administrative Court, and the Administrative Arbitration Center. It is concluded that, although IMT exemptions play a relevant role in promoting access to housing, boosting the real estate market and ensuring the neutrality of corporate restructurings, risks of inequality and abusive tax planning remain, justifying a careful application and continuous reflection on their regulatory configuration.