The Matosinhos Municipal Council in Porto district has triggered a property tax surge that sent some IMI bills up by 900%, sparking anger among landowners who say they cannot afford the new charges and will be forced to sell. The escalation stems from the municipality's designation of "urban pressure zones" designed to force vacant properties and undeveloped land onto the market amid Portugal's housing crisis.
Why This Matters
• Who's affected: Owners of empty homes and buildable land in Matosinhos, Leça da Palmeira, Senhora da Hora, and S. Mamede de Infesta face IMI rates 10 times higher than normal.
• The timeline: The pressure zones were drawn in 2022, making Matosinhos the first Porto district council to implement this measure.
• Next steps: The council admits the hike is disproportionate and has pledged to revise the boundaries, but payments are due immediately.
What Landowners Are Facing
Multiple property owners have challenged the increased bills through the tax system, believing them to be errors. The increases have been confirmed as deliberate by authorities. Some property owners have expressed strong opposition to the scale of the rises and their impact on inherited properties and modest holdings.
The upshot: owners say they'll liquidate assets rather than shoulder these costs. This outcome—selling land—is precisely what the policy intended, though not necessarily at the expense of residents who inherited modest plots or hold land for non-speculative reasons.
The Legal Mechanism Behind the Surge
Portugal's Municipal Property Tax (Imposto Municipal sobre Imóveis) is calculated by applying a percentage rate to a property's Valor Patrimonial Tributário (VPT), the official taxable value. For urban properties like houses and apartments, municipalities set rates between 0.3% and 0.45% annually. Matosinhos currently charges 0.37%, slightly down from 0.375% last year.
When a property sits empty for more than two years within a designated urban pressure zone, national law permits councils to apply increased rates. Matosinhos applied a significant multiplier to empty properties and undeveloped land. The law targets two categories: genuinely vacant buildings (identified by absent utility contracts or negligible water and electricity consumption) and land zoned for construction but left undeveloped.
Why Matosinhos Drew the Zones
Carlos Moura, vice president of the Matosinhos council, defended the measure by pointing to more than 1,000 closed homes in the municipality. "We can't have houses locked away that people can't access while facing such housing difficulties for those who live here or want to," he told SIC Notícias. The zones were drawn using indicators including population density, rental assistance requests, and the inventory of empty properties.
Matosinhos was the first council in Porto district to delimit these zones in 2022, covering the four most urbanized parishes. The policy aims to unlock housing supply in areas where rents and sale prices have climbed beyond reach for many residents, mirroring pressures in Lisbon and other coastal cities.
The council has acknowledged that the increased rates hit harder than expected and has pledged to revise the boundaries.
What This Means for Residents
If you own property in Matosinhos, Leça da Palmeira, Senhora da Hora, or S. Mamede de Infesta, check whether your land or building sits within a designated pressure zone. The council's boundaries are published on the municipal website.
Your options include:
• Challenge the classification: Contest the "vacant" designation if the property is in fact occupied, undergoing renovation, or legally uninhabitable.
• Develop or rent: Placing the property on the rental market or starting construction may affect the surcharge. Contact the council about available incentive programmes for affordable rental or rehabilitation.
• Apply for IMI relief: The council provides discounts on the base rate for certain properties. Contact the municipal offices for information on programmes you may qualify for.
If you inherited land you don't intend to develop, selling may be the most financially rational choice, which is exactly the behavioural outcome the policy seeks.
The Bigger Picture
Portugal faces significant housing shortages in urban centres despite having numerous empty properties. Bureaucratic hurdles, inheritance disputes, renovation costs, and speculative holding all contribute to the paradox. Various municipalities are exploring strategies to mobilize locked property and unlock housing supply.
The Matosinhos case illustrates the tension between municipal intervention to address housing shortages and the impact on property owners. While the council's intent—unlocking supply in a tight market—addresses a genuine need, the execution affects both large-scale holders and small-scale owners alike. The council has committed to reviewing the policy to address concerns about its proportionality.
