If your income comes as dividends from your own company, a Portuguese bank will lend against it, but only after it has shown up on your Portuguese tax return for a year or two. That timing drives most of the planning. The rest is arithmetic you can do yourself before you ever speak to a bank, and it works the same at any price.
This guide is for founders, investors and business owners who have moved to Portugal and pay themselves through a company, often one based abroad. Plenty of people set one up years before moving. Everything below reflects the rules in force in September 2026, including the new Banco de Portugal measure that took effect on 1 August 2026.
The Rules Every Portuguese Bank Has to Apply
Banco de Portugal sets limits that every lender in the country follows. The current version is Macroprudential Recommendation 1/2026, and it replaced the 2018 measure most expat guides still quote.
Loan-to-value (LTV) is capped at 90% for your own permanent home and 80% for anything else, including a second home. In practice, banks often go lower than that for large loans or unusual income, and 70% to 80% is a realistic planning figure if your file includes foreign company dividends.
The debt-service-to-income ratio (DSTI), which Portuguese banks call the taxa de esforço, is capped at 45% of your net income. It was 50% until August 2026. Each bank can exceed that for up to 10% of its new lending in a half-year, but you shouldn’t plan on being one of the exceptions.
The DSTI test uses a stressed rate. For variable and mixed-rate loans longer than ten years, the bank adds 1.5 percentage points to the rate before it checks whether you can afford the payment. Fixed-rate loans are tested at their actual rate.
The maximum term is 40 years if you’re 35 or younger and 35 years if you’re older. With two borrowers, the older one’s age counts. If you’ll be over 70 when the loan ends, the bank has to cut the income it counts for those years by at least 20%. Many banks also set their own cap on age at maturity, often 75.
How Much Income You Need, as a Percentage of the Price
You can reduce the whole calculation to one number: the net annual income you need as a percentage of the house price. It depends on the LTV, the term and the rate the bank tests you at.
With 12-month Euribor around 3.3% in late September 2026 and a typical spread of 0.6% to 1.0%, a variable-rate mortgage costs about 4% to 4.3%. Add the 1.5-point stress and the bank tests you at roughly 5.6%. The table uses that figure for variable rates, and 4% as a reference for a fixed rate at about that level.
| LTV | Variable, 30 years (tested at 5.6%) | Variable, 35 years (tested at 5.6%) | Fixed at ~4%, 30 years |
|---|---|---|---|
| 60% | 9.2% | 8.7% | 7.6% |
| 70% | 10.7% | 10.1% | 8.9% |
| 80% | 12.2% | 11.6% | 10.2% |
| 90% | 13.8% | 13.0% | 11.5% |
Those figures are the legal minimum, the income that puts you exactly at the 45% cap. A bank that can say no will want room. At a more comfortable 35% of income, the 70% LTV variable-rate row becomes 13.8% of the price instead of 10.7%.
So for a variable-rate mortgage at 70% LTV over 30 years:
- the bare minimum is net income of about 11% of the house price
- a strong application is about 14%
That figure has to cover everything. Car loans, other mortgages and credit card limits all count toward the 45%.
Net Means After Portuguese Tax
The bank looks at net income, which Banco de Portugal defines as the net figure on your latest tax return, or your last three months of income. How your dividends are taxed in Portugal therefore changes the gross amount you need to take out.
If you’re taxed under the normal rules, foreign dividends pay a flat 28%, or you can choose to add them to your other income and pay the progressive rates. At 28%, you need to pay yourself about 1.39 times the net figure. A net target of 11% of the price becomes about 15% gross.
If you have the old NHR regime, dividends from a country that the tax treaty lets tax them are exempt in Portugal, apart from blacklisted jurisdictions. That covers most treaty countries. The same goes for IFICI, the regime that replaced NHR in 2024, which exempts foreign dividends and requires a qualifying professional activity. Under either one, gross and net are close to the same figure.
Exempt dividends still go on your return, so the bank can see them. That helps you: exempt income you declare still counts as proof you can pay.
Dividends from a blacklisted jurisdiction pay 35%. Check the Portaria 150/2004 list before assuming a structure is fine.
Why Timing Matters More Than Amount
Banks usually ask self-employed borrowers and business owners for the last two years of their Portuguese tax return (Modelo 3), with the assessment notice (nota de liquidação). Returns are filed between 1 April and 30 June of the following year, so dividends paid in 2026 only appear on paper in spring 2027.
That leads to a few practical rules:
- Start paying dividends at a steady level the first full year you’re resident. To a bank, a regular annual dividend looks like a salary, while a single large payment looks like a one-off.
- A dividend paid before you became resident won’t be on your Portuguese return at all.
- One large dividend to fund the deposit helps with the cash but does little for the income test.
- If you need to buy sooner, go to banks that assess wealth as well as income, which is covered further down.
The common failure is finding a house, applying straight away and discovering the first Portuguese return doesn’t exist yet. Plan the dividend schedule 18 to 24 months ahead of the purchase.
The Cash You Need on Completion
Portuguese purchase costs are significant at higher prices, and you pay them in cash on top of the deposit.
For your own permanent home, the property transfer tax (IMT) is 6% of the whole price between €660,982 and €1,150,853 and 7.5% of the whole price above that. Below those levels the rate is progressive, from 0% to 8%. Second homes follow a similar scale that starts at 1%. The current table is on the tax authority’s site.
Stamp duty is 0.8% of the purchase price, plus 0.6% of the loan amount for a mortgage of five years or more.
Since 25 May 2026, non-resident buyers of residential property pay a flat 7.5% IMT with no exemptions, whatever the price. You can claim back the difference if you become resident within two years, but the claim has a deadline. If you’re about to move, buy after your tax residency is registered.
For a home above €1.15 million at 70% LTV, the cash needed is about 30% deposit + 7.5% IMT + 0.8% stamp duty + 0.42% stamp duty on the loan. That’s close to 39% of the price, before lawyer and notary fees and any furniture. Between €660,000 and €1.15 million it’s about 37%.
Getting the Money Out of Your Company
If you have a company abroad, you may want to leave your investments inside it, because that’s where the low tax rate is. Buying a house doesn’t conflict with that, but you need to know where the low rate actually comes from.
Check how your company’s home country actually delivers that rate. In some countries the low rate only materializes when profits are paid out as dividends, so money left inside the company has been taxed at a higher rate than the headline suggests. In others, retained profits are taxed low from the start. Your accountant there can tell you which applies, and whether a holding company above the operating company changes the picture.
To buy a house, the money has to reach you personally, and that means dividends. The cleanest structure is a personal mortgage repaid from a steady annual dividend. The investments stay in the company, and you take out only what the mortgage and the income test need.
There are two shortcuts to avoid. Having the company pledge its portfolio as security for your personal mortgage gives you a benefit, and both countries can treat it as a disguised dividend. Having the company buy the house and let you live in it creates a taxable benefit and draws Portuguese attention to where the company is really run.
Two Portuguese Rules That Can Undo a Foreign Structure
The first is place of effective management. A company is resident in Portugal for corporate tax if it’s effectively managed from here (CIRC article 2(3)). Portugal’s tax treaties generally break a dual-residence tie by the same test. If every decision is made at your kitchen table in Portugal, the company can be treated as Portuguese and taxed on its profits here. What protects you is local directors and board meetings where decisions are actually made in the company’s home country.
The second is the controlled foreign company rule. If you own 25% or more of a foreign company that pays less than half the tax a Portuguese company would, Portugal can tax its profits in your hands even if they’re never paid out. With the Portuguese corporate rate at 19% in 2026, the threshold is an effective foreign rate of about 9.5%. There’s an exception for EU and EEA companies carrying on genuine economic activity for valid commercial reasons.
Measuring the foreign tax isn’t always simple. Where a country gives part of the corporate tax back later, through refunds or credits, the Portuguese rule doesn’t say whether it looks at the tax before or after, and I haven’t found an AT ruling or court decision on it. If your company mostly holds investments, the genuine-activity exception is weaker, so have a Portuguese adviser give you a written opinion.
When the Income Test Is the Wrong Tool
Two routes suit people with significant assets but a short Portuguese tax history.
The first is private banking. The private-banking arms of the large Portuguese banks assess wealth as well as income, and a client with a large portfolio can often get a mortgage on a lighter income record, sometimes with part of the portfolio pledged as extra security. If you pledge anything, use assets you hold in your own name. The Banco de Portugal limits still apply, but a bank that knows your balance sheet is more flexible within them.
The second is a securities-backed loan, also called a Lombard loan. You borrow against your portfolio without selling it. Across Europe, lenders typically advance 50% to 70% of the value of blue-chip shares and ETFs, and more against government bonds. Crypto is often accepted at a steep discount or not at all. It needs no income test, and in exchange the loan can be called if markets fall. When the loan is in euros and the collateral is in dollars, a weaker dollar makes a margin call more likely at the same moment the market drops. Portuguese banks don’t publish their Lombard terms, so ask directly.
A third route is selling part of your portfolio instead of borrowing. The tax cost decides whether that makes sense. Portugal exempts gains on crypto held for 365 days or more (CIRS article 10(22)), with exceptions for NFTs and certain non-EU counterparties. Share and fund gains pay 28% for most residents. More on this in my guide to capital gains tax in Portugal.
A Sequence That Works
- Register your tax residency before you buy. The non-resident IMT rate makes this worth thousands.
- Confirm your tax status in writing: normal rules, old NHR or IFICI. It changes how much you need to take out gross.
- Set a yearly dividend of 11% to 14% of your target price, net, more if you plan above 70% LTV. Gross it up if you pay 28%.
- Pay it every year and file on time, so two Portuguese tax returns show it before you apply.
- Keep cash of about 37% to 39% of the price for the deposit and taxes if you’re buying above €660,000 at 70% LTV.
- Get your company’s structure checked against the place-of-management and CFC rules before a bank’s compliance team asks.
- Talk to a mortgage broker (intermediário de crédito) who has placed foreign-dividend files. They know which banks accept a foreign company’s dividend certificates and which ones stall.
- Ask a private bank in parallel, especially if you have a large portfolio and a short Portuguese tax history.
Frequently Asked Questions
Can I get a Portuguese mortgage with no Portuguese tax return yet?
Sometimes, through private banking or with a large deposit, but a standard application will stall. Banco de Portugal lets banks use the last three months of income, but for dividend income most banks want two years of returns.
Do exempt NHR or IFICI dividends count as income for the bank?
They appear on your return as declared income, and banks generally treat declared income as income. Ask the bank how it handles exempt foreign income before you apply, since policies vary and none of them publish one.
Is a fixed or variable rate easier to qualify for?
Fixed. It’s tested at its actual rate, while variable and mixed-rate loans get the 1.5-point stress added. At similar headline rates, fixed cuts the income you need by about a sixth.
Can my foreign company just buy the house?
It can, but living in a company-owned home is a taxable benefit, and it draws attention to where the company is managed. For a home you live in, buy it personally.
Does leaving investments in my company keep my tax low?
Only if the structure is built for it. In some countries the low rate only arrives when profits are distributed. Wherever the company is, Portugal’s CFC rules can still tax its low-taxed profits in your hands.
This article explains the rules as they stood in September 2026. It isn’t tax or legal advice, and the details of your structure will decide how they apply to you. Before relying on any of this, get a Portuguese tax adviser and your company’s home-country accountant to review your setup together.
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