The type of licence attached to a property plays a crucial role in the mortgage approval process.
In Portugal, the distinction between a Habitation Licence and a Service-Use Licence directly affects the type of financing available, the Loan-to-Value (LTV) ratio, and applicable interest rates
However, there is good news — mortgage conditions for properties with a Service-Use Licence have become increasingly competitive, now often comparable to those of standard residential mortgages.
At Sublime Mortgage, we guide our clients through these differences to ensure they secure the most suitable and advantageous financing solution
PROPERTIES WITH A HABITATION LICENCE
A Habitation Licence certifies that a property meets all legal standards for residential use, approved by the local council.
Typical conditions:
- Financing up to: 80% (non-residents) or 90% (residents)
- Interest rates: Traditionally lower
- Type of loan: Standard residential mortgage
- Purpose: Primary residence, second home, or long-term rental
These properties are generally considered lower risk, offering the most favourable mortgage terms.
PROPERTIES WITH A SERVICE-USE LICENCE
A Service-Use Licence applies to properties designated for commercial or professional purposes — such as offices, studios, or serviced apartments — even when the layout resembles a residential space.
Typical conditions:
- Financing up to: 60–70%
- Interest rates: Increasingly attractive, often approaching those of residential mortgages
- Type of loan: Commercial or investment mortgage
- Purpose: Professional activity, investment, or mid-term rental under a service framework
In recent months, lenders have revised and reduced interest rates for service-use properties, reflecting the growing demand and value of this asset class, particularly in urban areas.
WHY THE LICENCE TYPE MATTERS
Before purchasing or applying for a mortgage, it is essential to confirm the property’s licence of use with the local council (Câmara Municipal).
This classification directly determines:
- The type of mortgage available
- The LTV ratio a bank can offer
- The final interest rate applicable
TAX DIFFERENCES: IMT AND STAMP DUTY
In addition to financing conditions, the type of property licence also impacts the taxes payable at purchase.
For Habitation Licence properties:
- IMT (Property Transfer Tax): Calculated on a progressive scale, with exemptions or reductions for primary residences up to certain values.
- Stamp Duty: 0.8% on the purchase price, plus 0.6% on the mortgage amount (if financed).
These benefits make residential purchases more tax-efficient for owner-occupiers.
For Service-Use Licence properties:
- IMT: Charged at a flat rate of 6.5%, with no exemptions, since the property is considered commercial or investment use.
- Stamp Duty: Also 0.8% on the purchase price and 0.6% on the loan amount.
This distinction can represent a significant difference in upfront costs, especially for high-value properties.
EXPERT GUIDANCE FROM SUBLIME MORTGAGE
EXPERT GUIDANCE FROM
SUBLIME MORTGAGE
At Sublime Mortgage, we offer tailored support at every stage of the financing process, ensuring:
✅ Verification of the property’s licence and credit eligibility
✅ Negotiation of the best available lending terms
✅ Comprehensive guidance through to completion
The market is evolving — and so are mortgage opportunities.
Our mission is to help you make informed, secure, and strategic decisions about your property investment in Portugal.
