A new a wealth tax on properties in Portugal valued at more than €600,000 (£507,700) has been introduced by the Portuguese government.

The new property levy, which is an annual rate of 0.3% on properties valued at over €600,000, replaces a 1% charge on homes valued above €1m (£846,000), which has been scrapped.

The allowance applies per individual, so a married couple or those in a civil partnership would only face a tax on any jointly-owned properties over €1.2m (£1.15m).

Intriguingly, if a tax resident of Portugal has a bank account or investment in a jurisdiction on the blacklist of ‘tax havens’, such as Guernsey or Gibraltar, income is taxed at a higher rate of 35%, compared to the flat rate of 28%, and this could potentially also affect people who own a Portuguese property through a company since the entire value of the property would be subject to the new wealth tax, with no allowance. 

If the company is wound up and the property distributed to a Portuguese resident, it would liable for 35% corporation tax, according to Blevins Franks, which specialises in advising expats in Portugal, among other European nations.