Portugal's public mortgage guarantee ends in 2026: what young homebuyers should know
If you are aged 35 or under and planning to buy your first home in Portugal, there is an important date to know. Under the rules currently in force, mortgage agreements covered by the Portuguese State Public Guarantee must be formalised by 31 December 2026.
The scheme may allow a participating lender to finance between 85% and 100% of the property's transaction value, provided that the buyers, property and mortgage meet all the requirements. Separately, the tax relief commonly known as IMT Jovem may reduce or eliminate IMT property transfer tax and Stamp Duty on the purchase.
These are two different measures with separate eligibility rules. This guide explains how they work, what “100% financing” really means and the potential tax saving on a €200,000 home.
What ends on 31 December 2026?
The 31 December 2026 deadline applies to the formalisation of mortgage agreements covered by the Public Guarantee.
At the publication date of this article, Ministerial Order no. 236-A/2024/1 requires eligible agreements to be concluded by that date. An extension would require a later official decision and should not be treated as certain unless formally approved.
The deadline should not be confused with the end of IMT Jovem. The IMT and purchase Stamp Duty relief is a separate tax measure and, under the rules currently published, does not have the same announced end date.
Does the State finance 100% of the home?
No. Describing the scheme as “100% State support” can be misleading.
The State neither buys the property nor lends the money directly to the buyer. It provides a guarantee to the lender, which may cover up to 15% of the transaction value and remain in place for no more than the first ten years of the mortgage.
This guarantee may enable a participating lender to finance between 85% and 100% of the transaction value. For the purposes of the scheme, that value is the lower of the purchase price and the lender's valuation.
For example, if the agreed price is €200,000 but the bank values the property at €190,000, 100% financing may still be limited to €190,000. The buyer would have to fund the difference and any additional costs not covered by the mortgage.
Who may qualify for the Public Guarantee?
In summary, all borrowers and buyers must meet the applicable conditions, including:
- Being between 18 and 35 years old.
- Having tax residence in Portugal.
- Having income within the applicable limit of the eighth Portuguese income-tax bracket.
- Not owning another residential urban property or unit.
- Buying their first permanent primary residence.
- Having no outstanding tax or social security debts.
- Buying a property with a transaction value no higher than €450,000.
- Entering into a mortgage-backed loan with a participating institution.
Where there is more than one buyer, every buyer must also be a borrower and satisfy the scheme's requirements.
Meeting these conditions does not oblige a lender to approve the mortgage. The institution must still assess income, employment stability, existing commitments, affordability, credit history and the property value.
Does 100% financing mean buying without savings?
Not necessarily. Even where the mortgage covers the full transaction value, the buyer may still have to pay costs outside the loan, including:
- Stamp Duty charged on the use of the mortgage funds.
- Bank valuation and any fees included in the proposal.
- Deed, authenticated private document or other completion costs.
- Registrations and certificates where no exemption applies.
- Mortgage-related insurance.
- A shortfall caused by a valuation below the agreed price.
- Moving, renovation, furniture and an emergency reserve.
A purchase with 100% financing should therefore still be supported by a realistic budget and a financial buffer.
How does the IMT and Stamp Duty exemption work?
IMT Jovem is separate from the Public Guarantee. It may apply to the first purchase of a property used exclusively as the buyer's permanent primary residence when the buyer is aged 35 or under.
Among the relevant conditions, the buyer cannot be treated as a dependant for Portuguese income-tax purposes in the year of purchase. They also cannot own, or have owned during the previous three years, a residential urban property, a share in such a property or another partial ownership right over one.
In mainland Portugal in 2026, the full IMT exemption applies up to €330,539. Between €330,539 and €660,982, partial relief is available through a deduction. Above that limit, the general statutory rules apply.
The Stamp Duty relief concerns the 0.8% charge on the property purchase. It is different from Stamp Duty levied on the mortgage itself, which may still be payable.
Example of the saving on a €200,000 home
Consider a €200,000 purchase in mainland Portugal in 2026. The property will be the buyer's first permanent home, and the buyer meets all IMT Jovem conditions.
Without IMT Jovem
Using the 2026 IMT table:
IMT = €200,000 × 7% − €10,457.96
IMT = €3,542.04
Stamp Duty on the purchase is charged at 0.8%:
Stamp Duty = €200,000 × 0.8%
Stamp Duty = €1,600.00
| Tax on the purchase |
Without relief |
With IMT Jovem |
| IMT |
€3,542.04 |
€0 |
| Stamp Duty on the purchase |
€1,600.00 |
€0 |
| Total |
€5,142.04 |
€0 |
In this example, the potential tax saving is €5,142.04.
This is an illustrative calculation. Tax may be assessed on the higher of the declared price and the property's taxable value where applicable. The example also excludes mortgage Stamp Duty, bank fees, insurance and completion costs.
Can the Public Guarantee and IMT Jovem be combined?
Yes, provided the buyer independently meets the requirements of both schemes.
In an eligible case, the Public Guarantee may reduce the deposit required by the lender, while IMT Jovem may eliminate the taxes on the purchase. Together, they may lower the cash required at the outset, but they do not remove every cost or guarantee mortgage approval.
A buyer may also qualify for one scheme but not the other. The Public Guarantee, for example, has its own income and property-value limits. Eligibility should always be checked individually.
Why should buyers avoid leaving the process until December?
The statutory deadline applies to the formalised agreement, not the first enquiry made to a bank. The process will usually involve several stages:
- Collecting and checking the buyers' documents.
- Assessing affordability and existing commitments.
- Requesting and comparing proposals from several lenders.
- Finding a property and negotiating the purchase.
- Completing the bank valuation.
- Obtaining the final decision and observing applicable reflection periods.
- Preparing the deed or equivalent completion document.
Timings vary, and additional documentation, valuation shortfalls or changes to the application may cause delays. Starting early provides more room for an informed decision without assuming that approval will be automatic.
What should you compare before proceeding?
The initial loan-to-value ratio is only one part of a mortgage decision. Buyers should compare:
- APRC and total amount payable.
- Fixed, variable and mixed interest rates.
- The spread and linked products.
- Insurance arranged through or outside the lender.
- The initial instalment and higher-rate scenarios.
- Mortgage term and total cost.
- Savings remaining after completion.
You can also read our 2026 home loan guide and browse more practical information in Tips & Resources.
Frequently asked questions
Does the Public Guarantee ensure mortgage approval?
No. The lender must still assess creditworthiness and may decline the application or offer a lower amount.
Does the guarantee clear my debt if I default?
No. The guarantee protects the lender for the covered portion but does not remove the borrower's liability. If the State is required to pay, it may seek to recover that amount from the debtor under the applicable rules.
Do all lenders offer the scheme?
Not necessarily. Applications must be made to an institution that joined the protocol, and commercial terms may differ between lenders.
Does the exemption cover all taxes and costs?
No. Within the statutory limits, IMT Jovem covers IMT and Stamp Duty on the purchase. Mortgage Stamp Duty and other expenses may remain payable.
Will the programme be extended beyond 2026?
At the date of this article, no extension has been approved that would allow buyers to assume this. The rule currently in force requires the agreement to be formalised by 31 December 2026.
Preparing your purchase in advance
The Public Guarantee and IMT Jovem may reduce two significant barriers to buying a first home: the initial deposit and taxes on the purchase. Each measure has separate requirements, however, and every mortgage decision remains subject to the lender's assessment.
At DSIC Seixal Torre da Marinha, we provide a free assessment of your circumstances and help you compare solutions available in the market. Contact us before proceeding to understand the costs, timings and options relevant to your situation.
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