Good news on the Portuguese side: Portugal abolished classic inheritance tax in 2004, and close family is exempt from the stamp duty that replaced it. But between Portuguese filings and your home country's rules, the tax landscape deserves a clear map.
In Portugal: stamp duty (imposto do selo)
Transfers on death bear a 10% stamp duty, except for the spouse/partner, descendants and ascendants — who are exempt. Exempt or not, every estate must be declared to the Portuguese tax office within 3 months of the death (late filings can be regularised, with possible penalties).
At home: your own reporting
US persons: a foreign inheritance is generally not taxed as income, but large ones may need IRS reporting (Form 3520), and any Portuguese bank account holding proceeds can trigger FBAR/FATCA duties. UK residents: check inheritance-tax exposure based on domicile. Tax treaties prevent double taxation — not double paperwork.
While undivided: the IMI property tax
Portugal's annual property tax (IMI) remains due by the undivided estate, which carries its own tax number. Whoever advances IMI, insurance or repairs should keep receipts: they are credits to settle at the division.
On resale: capital gains
The difference between the sale price and the property's official value at the date of death is generally a taxable capital gain in Portugal (specific regime for non-residents) — to be coordinated with your home-country return.
Expensive mistakes to avoid
- Missing the 3-month Portuguese filing;
- Selling before registering the property in the heirs' names;
- Ignoring home-country reporting;
- Forgetting that equalisation payments (tornas) can be taxed.
These rules are general and change over time: HERDA's estate report includes the tax framing of your specific case, reviewed with specialised partners.