First home purchase exempt from IMT property tax and stamp duty for young people

The government has approved IMT property tax exemption and stamp duty for young people for the purchase of their first home.

The approval was announced after a Council of Ministers meeting on Thursday by the Prime Minister, Luís Montenegro.

The exemptions apply to young people up to the age of 35 on transactions up to €316,772, while purchases up to €633,435 will also be exempt up to €316,772.

Houses that cost over €633,453 will not be exempt from any reduction in IMT.

It means that for a purchase of a house for €200,000, young persons can save €5,578 on IMT and stamp duty that they will not have to pay.

For a house of €350,000 the saving would be €15,000 including savings on fees that will also be exempt.

The government estimates that the tax exemption could come into force on August 1 with an annual impact on the Sate Budget of €100 million.

The government is also proposing to create a compensation mechanism for municipal councils that would see a reduction in revenues given that IMT tax revenues go directly to local councils.

The government has also advanced with public credit backing for houses up to €450,000, and will broaden the Porta 65 programme by eliminating a maximum rent ceiling as a factor for exclusion.

The Porta 65, as it currently stands, is a reasonable rents incentive programme for young people aged between 18-35 whereby the government pays a percentage of the monthly rent based on a number of factors such as income and rental value of the property.