See how Portugal’s most expensive municipalities treat their residents.
In 2025, Portuguese municipalities will maintain the option to refund a portion of Personal Income Tax (IRS) revenue to their residents, with many choosing to increase the refund percentage, reflecting a policy of greater direct support for taxpayers.
Under the variable participation regime, municipalities can refund up to 5% of the tax collected. In 2024, around 80% of municipalities applied for refunds, a trend that continues in 2025, albeit with adjustments. While some decided to increase the benefit, others maintained or reduced the refund percentage due to budgetary constraints or local priorities.
The following municipalities stand out:
- Lisbon: Increased the refund from 4.5% in 2024 to 5% in 2025.
- Loulé (Golden Triangle) and Funchal: Maintained the maximum refund of 5%.
- Oeiras: Kept the refund at 0.3%.
- Cascais: Continues not to refund any percentage of tax to its residents.
- Sintra: Introduced a 1% refund in 2025, after not applying any refund in 2024.
- Porto: Maintained the refund of 1.5%.
- Vila Nova de Gaia: Maintained the 2.5% refund.
This municipal benefit is automatically processed by the Portuguese Tax Authority and is reflected in the Personal Income Tax settlement.
To benefit (if applicable in your municipality), you only need to file your Personal Income Tax return within the legal deadlines, and the amount will be automatically applied as a discount on the tax owed.
Tax Department
João Valadas Coriel | Inês Grácio
