Inheritance Tax in Portugal 2026: Who Pays the 10% [Guide]

Key Takeaways: Portugal has no stand-alone inheritance tax. Inheritances and gifts fall under Imposto do Selo (stamp duty) at 10%, but the spouse or de facto partner, children, grandchildren, parents and grandparents are fully exempt. The tax only reaches assets treated as located in Portugal. Even when nobody owes anything, the estate administrator must file Modelo 1 ISTG by the end of the third month after the month of death. For expats, the larger questions are often cross-border: which country’s succession law applies, how forced heirship works, and whether US estate tax or UK inheritance tax is in play.

Most expats worry about the tax rate first and the paperwork second. In Portugal it is usually the other way round. The rate is low or zero for close family, while the filing, the property registrations and the choice of governing law are where families lose time and money. This guide covers what Portugal taxes, who is exempt, what to file and when, and how the US and UK rules sit alongside it. Euro amounts come first; dollar figures use roughly $1.16 per euro (October 2026).

Does Portugal Have an Inheritance Tax?

No, not as a separate tax. Portugal taxes inheritances and gifts through Imposto do Selo, using item 1.2 of the general stamp duty table, “aquisição gratuita de bens”, at a flat 10%.

There is no estate-level threshold and no progressive scale. The 10% applies to each taxable heir on what they receive, and for most expats the real question is whether the heir belongs to the exempt group. If the answer is yes, the rate is 0%. The tax is also not an estate tax in the US sense: it is charged on the person receiving, not on the total left behind.

Stamp duty is separate from the property taxes you may already know. IMT is paid when buying, as explained in our guide to buying property in Portugal as a foreigner, and IMI is the yearly bill, covered in our IMI property tax guide.

Who Pays the 10% and Who Is Exempt?

Under article 6(e) of the Stamp Duty Code, the spouse or de facto partner (unido de facto), descendants and ascendants are exempt from the 10% on gratuitous transfers. Anyone outside that circle pays it.

In practice that means a surviving husband or wife, children, grandchildren, parents and grandparents pay nothing. Siblings, nieces and nephews, friends, and unmarried partners who do not qualify as a união de facto pay 10%. Step-children are a point to check with a professional rather than assume either way.

There is a catch for gifts of Portuguese property during life. Item 1.1 of the same table charges 0.8% on onerous acquisition or donation of real estate rights, and it does not list acquisition by death. So a child who inherits a flat pays no stamp duty, while a child who is given the same flat while the parent is alive is exempt from the 10% but still pays 0.8%.

Relationship to the giver	Inheritance (item 1.2)	Gift of Portuguese property in life
Spouse or união de facto partner	0%	0.8% on the property value
Child or grandchild	0%	0.8% on the property value
Parent or grandparent	0%	0.8% on the property value
Sibling, niece, nephew	10%	10% plus 0.8%
Friend or unrelated person	10%	10% plus 0.8%

The gift column follows how the table is built: the 0.8% applies to any donation of real estate, and the 10% is added where no exemption exists. Check your own case before moving anything.

Which Assets Does Portugal Tax?

In broad terms, Portugal’s 10% reaches assets treated as located in Portugal. Article 4 of the Stamp Duty Code says that on gratuitous transfers the tax is due whenever the assets are situated in national territory.

The code deems the following to be in Portugal: real estate and rights over it, movable assets registered in Portugal such as cars and boats, intellectual property registered in Portugal, and certain financial items such as credits, company shares and money or crypto-assets held with Portugal-based institutions. For the financial items the tests turn on where the deceased or the recipient is domiciled, and domicile follows the IRS Code residence rules. Treat that list as a map, not a verdict.

The practical point is simple. A US house or a US brokerage account is not what Portugal’s stamp duty is aimed at. A Lisbon flat, a Portuguese-registered car, or Portuguese bank balances of a Portuguese resident are. Property matters most for most expat families, and the taxable value for real estate is not the market price. Under article 13 it is the VPT (valor patrimonial tributário) on the property register at the date of transfer.

What Must Heirs File, and by When?

The estate administrator, the cabeça de casal (usually the surviving spouse first), must report the death to the tax authority on Modelo 1 ISTG by the end of the third month after the month of death. The Portal das Finanças page on death states this, and the duty applies whenever the deceased owned assets in Portugal, even if every heir is exempt.

A death in January therefore means a deadline at the end of April. A simple order of work:

1. Get the death certificate and the will, if there is one.
2. Make sure the deceased and every heir have a NIF. Heirs abroad can follow our guide on how to get a NIF in Portugal.
3. Request a NIF for the undivided estate (herança indivisa). A non-resident cabeça de casal can do this through a tax representative via e-balcão.
4. Prepare the list of assets (Anexo I, “Relação de Bens”) with the ID details of the deceased and the heirs.
5. File Modelo 1 ISTG on the Portal das Finanças (“Preencher participação”), through e-balcão, or at a Serviço de Finanças by appointment.
6. Keep paying the running costs. Until the estate is divided, the cabeça de casal pays IMI on estate property, and AIMI can apply above a €600,000 VPT, which heirs may be able to split in their own declarations.

If you do one thing this month, put the three-month deadline in the calendar of whoever would be cabeça de casal and make sure they know where the documents are.

Worked Examples

These are illustrations only. VPT figures are invented to show the mechanics, and real VPTs are often well below market value.

A child inherits a Lisbon flat. A parent resident in Portugal dies owning a flat worth about €300,000 on the market, with a VPT of, say, €180,000. The child is a descendant, so stamp duty is €0. The cabeça de casal still files Modelo 1 ISTG within the deadline, and the child takes over IMI as owner after the estate is divided.

A niece inherits the same flat. A niece is outside the exempt group, so the 10% applies to the taxable value. On a €180,000 VPT that is €18,000 (about $20,900). On the full €300,000 market price it would be €30,000, which is why the VPT point matters, and why you should confirm the register value rather than guess.

A parent gives the flat to a child in life. The child is exempt from the 10% but pays 0.8% under item 1.1. On a €180,000 VPT that is €1,440 (about $1,670). Compared with inheriting, a lifetime gift costs something, though it may still make sense for other reasons.

What About Gifts During Your Lifetime?

Gifts of assets in Portugal are within the same stamp duty system. Close family is exempt from the 10%, but gifts of real estate carry the 0.8% charge on top, as the table above shows.

Gifts are also where cross-border rules bite. A US citizen giving to a child may meet the US annual gift exclusion, which the IRS lists at $19,000 per recipient for 2026 (about €16,400). Portugal’s exemption for family says nothing about US reporting, so keep the two analyses separate.

Which Country’s Inheritance Law Applies to Expats?

For most expats living in Portugal, Portuguese succession law applies by default. Under the EU Succession Regulation, for deaths on or after 17 August 2015 the law of the deceased’s habitual residence at death governs the whole estate (article 21), in every EU country except Denmark and Ireland.

A person can also choose, in a will, the law of the country whose nationality they hold (article 22, see the regulation text). A US, UK or Canadian national living in Portugal who makes no choice will have Portuguese law applied.

That matters because of forced heirship. Under Portuguese law the spouse, descendants and ascendants are herdeiros legitimários, who are entitled to a reserved share of the estate called the legítima (Civil Code arts. 2156 onward, with the section on legítima covering spouse and children). With a spouse and children, a large part of the estate is reserved for them, and only the remaining portion can be left freely by will.

For expats used to leaving everything to a spouse, a friend, or a charity, that can be a shock. If you do one thing, make a will that names your governing law, and have it reviewed by someone who works with both systems. A Portuguese lawyer or solicitador can tell you what choice is available in your situation and how it interacts with your home-country will. That one conversation is the advice worth paying for.

US Citizens: Does US Estate Tax Still Apply?

Possibly, depending on your US status and the size of your estate, so ask a US adviser whether US estate and gift rules reach your worldwide assets. The IRS says the basic exclusion amount for people dying in 2026 is $15,000,000, roughly €12.9 million.

For most families that is well above their net worth, so the US estate tax is not a practical issue. If your estate is anywhere near it, the Portuguese 10% and any US tax need to be modelled together. Our overview of US taxes for Americans in Portugal covers the income tax side, and the estate side deserves its own review. Do not assume relief from double taxation works automatically; ask your advisers how Portuguese stamp duty and any US estate tax would interact.

UK: The New Long-Term Residence Rule

Since 6 April 2025, UK inheritance tax (IHT) turns on residence rather than domicile. A “long-term UK resident” is someone who has been UK resident for at least 10 of the previous 20 tax years under section 6A of the Inheritance Tax Act 1984.

Long-term residents are within the scope of IHT on worldwide assets, and that status can continue for a tail of years after leaving, up to 10. A Brit who has lived in Portugal for a few years after a long UK career may therefore still be exposed to UK IHT on assets in both countries. This is high level only. Anyone with UK ties should get UK-qualified advice on their own position.

Final Thoughts

Portugal is one of the gentler places to leave assets to close family: 0% for spouse, children and parents, and a flat 10% for everyone else on Portuguese assets. The risk for expats is not the rate. It is a missed three-month filing, an unplanned gift of property, or a will written under the wrong law. Get the NIFs sorted, know your VPT, decide your governing law, and speak to a Portuguese lawyer or solicitador once, before it is needed.