07.25.2025
Youth Tax Relief in Portugal: A New Advantage for First-Time Buyers
Discover how Portugal's Youth IRS can help you secure better mortgage conditions.
If you're under 35 and planning to buy your first home in Portugal, the updated Youth IRS regime could give you a financial edge. With higher income exemptions and broader eligibility, this tax relief means more available income — and that could be the key to mortgage approval and better home loan conditions.What's changing in 2025?
As of 1 January 2025:- Eligibility age increases to 35 (previously 30)
- Benefit period extended to 10 years
- No academic qualification required
- Up to €28,700/year tax-free, based on 55 times the IAS value
Income tax exemption by year:
- Year 1: 100%
- Years 2–4: 75%
- Years 5–7: 50%
- Years 8–10: 25%
Who qualifies?
- Residents under 35 with income from employment or self-employment
- No pending tax issues
- Non-habitual residents
- Participants in the "Regressar" programme
- Beneficiaries of other fiscal incentives (e.g. scientific research)
How to apply
- Indicate the Youth IRS option in your annual tax return (Modelo 3)
- You can also ask your employer to apply it directly via withholding tax reductions
Why it matters for homebuyers
If you're considering buying property in Portugal, this tax break can help you:- Increase your mortgage approval chances
- Qualify for better loan conditions (lower interest rates or longer terms)
- Free up cash for the initial deposit or monthly repayments