In Portugal, buyers under 35 have access to a housing package often informally called the "preferential mortgage for the young." That’s not quite accurate. In reality, the program reduces taxes on a first home purchase and allows buying an apartment without the usual down payment, since the state takes on part of the bank’s risk.
Portuguese citizenship isn’t required. If you live in Portugal, have a local tax address, meet the program’s conditions, and a bank is willing to lend to you, you can qualify for the same benefits as citizens.
The key date is December 31, 2026. By then, the mortgage agreement with the state guarantee must be signed. Given the time needed to choose an apartment, go through bank checks, get a property valuation, and gather documents, starting this a couple of months before the deadline likely won’t be enough.
What is this program?
The program has two parts.
The first is IMT Jovem (a preferential regime for young buyers that exempts them from the property transfer tax and stamp duty on the purchase of a first permanent home). It reduces or fully removes two payments at purchase: IMT (Imposto Municipal sobre as Transmissões Onerosas de Imóveis, Portugal’s municipal property transfer tax) and Imposto do Selo (stamp duty charged on real estate transactions).
The second is garantia pública do Estado (a public state mortgage guarantee, where the state guarantees the bank a portion of the loan risk). This guarantee can cover up to 15% of the original loan amount and allows the bank to finance up to 100% of the purchase price.
In short: IMT Jovem saves money on taxes, while garantia pública do Estado helps close the deal without tens of thousands of euros for a down payment.
What do I get out of it?
If you meet the conditions, there are two kinds of benefit.
The first is tax-related. On a purchase up to €330,539 (the 2026 threshold), IMT Jovem can fully eliminate IMT and Imposto do Selo. If the apartment costs more but stays within the preferential range, taxes are charged only on the portion above that threshold.
In practice, once you’re above that threshold, the tax savings become nearly fixed: for apartments priced at €350,000, €400,000, or €450,000, the savings are roughly the same order of magnitude — around €15,300. Beyond that, the apartment price and the tax on the excess grow, but the savings on the first portion of the value barely increase further.
The second benefit is deal entry. A typical buyer often has to bring 10–15% of the apartment’s price to the bank in cash. For a €350,000 apartment, that could be €35,000–52,500 before taxes, fees, furniture, and moving costs. With garantia pública do Estado, the bank can lend the full price of the apartment if the client passes underwriting and the bank participates in the program.
The guarantee doesn’t reduce the apartment’s price. That 10–15% doesn’t disappear — it becomes part of the mortgage debt. For someone with a stable income but no large starting sum, the difference is still significant: they can buy a home sooner instead of waiting years to save up a down payment.
How much can you save?
Consider a 32-year-old buyer. They are a Portuguese tax resident, buying a first apartment for permanent residence at €350,000, haven’t owned property in the last three years, and passed the bank’s underwriting.
Without IMT Jovem, they would pay roughly €14,237 in IMT and €2,800 in Imposto do Selo. Total — about €17,037 in taxes. With IMT Jovem, tax is calculated only on the amount above €330,539. The excess is €19,461, which comes out to about €1,557 in IMT and about €156 in Imposto do Selo. Total — about €1,713.
The guarantee works separately. If the bank approves financiamento a 100% (100% financing of the purchase price), the buyer may not need to put down €52,500 at closing. But they later repay the bank not €297,500, but the full €350,000 plus interest.
How much might the monthly payment be?
The payment depends on the rate, term, insurance, and bank conditions. Banco de Portugal (Portugal’s central bank) explains that a mortgage can have a variable, fixed, or mixed rate, and the total cost of the loan includes not just interest but also fees, insurance, and other expenses.
As a reference point, take an apartment at €350,000 with a loan for the full amount. If the buyer is 32, the maximum mortgage term under solvabilidade rules is 37 years.
For a €350,000 loan over 37 years, the approximate payment covering principal and interest only would be:
at 3% annual rate — about €1,306/month;
at 3.5% annual rate — about €1,407/month;
at 4% annual rate — about €1,512/month.
This is an estimate, not a bank offer. In an actual deal, life insurance, home insurance, bank fees, and possible account charges would be added. An exact simulation needs to be based on the FINE (Ficha de Informação Normalizada Europeia, the European standardized information form with loan terms) that the bank must provide for a specific offer.
If you’re already paying, say, €1,300–1,500/month in rent, a mortgage payment on a €350,000 apartment could be roughly comparable.
What income is needed for the bank to approve a mortgage?
The state program doesn’t eliminate the bank’s underwriting — if anything, the opposite: with a loan covering 100% of the apartment’s price, the bank will scrutinize even more closely whether the borrower can repay the full amount.
Banco de Portugal also requires banks to assess a client’s solvency before issuing a loan. This takes into account age, employment, regular income and expenses, existing loans, data from the Central de Responsabilidades de Crédito (Banco de Portugal’s credit registry), and possible future risks.
The key figure is taxa de esforço (the share of net monthly income spent on loan payments). As a general rule, total loan payments, including the new mortgage, should not exceed 50% of net income. This is an upper limit, not a guarantee of approval. Many banks would be more comfortable with a client whose mortgage takes up noticeably less — say, 30–40% of net income.
For our example, this means: if the mortgage payment is about €1,400/month, the formal upper reference of 50% would require a net income of roughly €2,800/month or more. A more conservative bank scenario would be closer to €3,500–4,500 in net household income, especially with children, other loans, non-standard income, or a short history in Portugal.
A Portuguese salary helps but isn’t the only option. Banco de Portugal states that banks should rely primarily on regular income, including salary, service payments, and social benefits. So a freelancer, remote employee of a foreign company, or someone with income from abroad could theoretically qualify, but the bank will ask for proof of regularity and may treat such income more cautiously.
Typically, the bank requests a tax return, payslips or recibos verdes (electronic receipts for self-employed individuals), an employment or service contract, bank statements, documents on other loans, and confirmation of no outstanding debts to the Autoridade Tributária (Portugal’s tax authority) and Segurança Social (the social security system). If income comes from another country, translated documents and a longer income history may be needed.
Do I qualify for the program?
For IMT Jovem, the main conditions are:
you are 35 or younger on the date of purchase;
this is your first purchase of a home for your own permanent residence;
you don’t currently own residential property and haven’t owned any in the previous three years;
in the year of purchase, you are not considered a dependente para efeitos de IRS (a dependent family member on someone else’s tax return);
the apartment must become your habitação própria e permanente (your own permanent home).
Dependente para efeitos de IRS is a person whom parents or another taxpayer list as a dependent family member on their tax return. For IMT Jovem, the buyer must not be such a dependent in the year of purchase.
For garantia pública do Estado, the conditions are similar but with additional filters. You must be between 18 and 35, have a morada fiscal (tax address) in Portugal, not own other housing, be buying a first permanent home, have no debts to the tax authority or Segurança Social, and the property price must not exceed €450,000. Income must not exceed the 8th escalão de IRS (bracket of Portugal’s income tax scale): for 2026 that’s roughly €86,600 in taxable annual income, with the exact figure checked by the bank against the current IRS scale.
Another important difference: if multiple people are buying an apartment together, all buyers must be co-borrowers on the loan, and all must meet the conditions of the state guarantee.
The logic for the tax break is more lenient. If a couple buys an apartment and only one person meets the IMT Jovem conditions, the benefit usually applies only to their share. For example, in a 50/50 purchase, the qualifying buyer gets the benefit on their 50%, while the other buyer pays tax under standard rules on their portion.
What does "the apartment must become a permanent home" mean?
This is one of the most important points. Habitação própria e permanente means the apartment is purchased as your primary home, not as an investment property, a vacation home, a "for later" property, or a rental unit.
In practice, this means that after the purchase you must actually live in the apartment and transfer your morada fiscal there. The tax address is the main visible marker for the state: if you bought an apartment under the preferential program but kept your tax address elsewhere, it may look as though the property never became your permanent home.
For IMT Jovem there’s a specific deadline. The home must become your permanent residence within 6 months of purchase. If this doesn’t happen, the benefit may be revoked.
For 6 years, you cannot change the apartment’s designated use. You can’t buy it under the program as a primary residence but actually use it as an investment property: renting it out entirely under a long-term lease, running alojamento local (short-term tourist rental), leaving it empty while living elsewhere, or registering the property for business use instead of residential use.
You can sell the apartment. Selling is explicitly listed as an exception: if you lived in the apartment as your primary home and later sold it, the sale itself doesn’t necessarily cancel the tax benefit. The law also allows exceptions for changes in family situation — marriage, divorce, having children — and for a job change requiring relocation more than 100 km from the home, as long as the property remains designated for residential use only.
Renting out a single room is a grayer area. If you genuinely live in the apartment yourself and rent out a room, that’s not the same as renting out the whole property as an investment unit. Before purchasing and before signing the loan, it’s best to clarify this scenario with the bank, a solicitador (a legal specialist who often handles real estate transactions), or a tax advisor. Informal renting without a contract is not a solution — it’s a separate tax and legal risk.
Checks can be based on various signals: morada fiscal, tax returns, lease agreements, alojamento local registration, bank data, transaction documents, and possible communication between government agencies. The law explicitly requires public bodies to report to the tax authority any facts that could affect the benefit’s continuation.
Why the rush?
Because of garantia pública do Estado. Loan agreements with the state guarantee must be formalized by December 31, 2026. Once the loan is signed, the guarantee itself lasts 10 years.
IMT Jovem currently has no separate deadline like "by the end of 2026." The benefit is built into tax rules and remains in effect until the law changes. However, thresholds may be updated along with tax tables, which is why the amounts in 2026 differ from those in 2024 and 2025.
You’ll need to gather documents, get a preliminary assessment, find a property, wait for the bank’s property valuation, go through legal review, arrange insurance, and reach the escritura (the notarized deed of sale). So anyone who specifically wants to buy without a large down payment should start the process early.
Where do I go and what do I do?
First step — check your eligibility against the conditions. Age, tax address, no other residential property, IRS status, income limit, and the property’s intended use all need to line up.
Second step — understand your budget. For the state guarantee, the property price can’t exceed €450,000; for the full tax benefit, €330,539 — above that, the benefit becomes partial.
Third step — contact several banks and ask directly about crédito habitação jovem (mortgage loan for young buyers) with garantia pública do Estado. Not all banks view non-standard income, a foreign employer, freelance work, or a short history in Portugal the same way.
Fourth step — request pré-aprovação (mortgage pre-approval). This isn’t a final loan guarantee, but it shows what budget the bank is willing to consider. This is especially important for expats: it’s better to know the bank’s real position before you put down a sinal (deposit under a preliminary purchase agreement).
Fifth step — look for a property that fits the program. The apartment must be suitable for permanent residence, the price must stay within the limits, and the bank’s valuation shouldn’t fall significantly short of the sale price. For the loan, the bank calculates the loan-to-value ratio using the lower of the two figures: the purchase price or the bank’s valuation.
Sixth step — apply for the tax benefit. Before the transaction, you file Modelo 1 do IMT (the declaration for calculating IMT) through the Portal das Finanças. The portal has a dedicated service for requesting exemption from IMT and Imposto do Selo. This is usually handled with help from a solicitador, notary, lawyer, or the bank as part of the transaction.
Seventh step — after purchase, actually move in and change your morada fiscal.
If I have money for a down payment, do I need the state guarantee?
Not always.
Suppose you have €150,000 and want to buy an apartment for €350,000. In that case, you could pay that amount upfront and take a mortgage for only €200,000. At a 3.5% rate over 37 years, the payment would be about €804/month, excluding insurance and fees. The debt is smaller from day one, total interest over the term is lower, and the bank may view the deal more favorably.
The IMT Jovem tax benefit still applies if you meet its conditions. The state guarantee is aimed primarily at people who have enough income for a mortgage but lack a large sum for a down payment.
