Moving to Portugal — next steps

Purchase costs

VAT on new car23%

Registration tax0%

Portugal's ISV (Imposto Sobre Veículos) is a one-time registration tax paid on first Portuguese registration. It is calculated on cylinder capacity + CO2 emissions. For a used car imported from Germany, a 2019 1.4L petrol Euro 6 might incur ISV of €2,000-5,000 depending on emissions. New low-CO2 cars pay less. 2025 reform: 52% depreciation reduction at 6 years (both components). This is Portugal's biggest car ownership trap for expats.

Annual ownership costs

Road tax€60

3rd party insurance€200

Vehicle inspection€30 / 2 yr

Total/year€290

Fuel prices(2026-Q1)

⛽ €1.72/L🚛 €1.58/L diesel

Used car market

5yr compact (Golf/Corolla)€14k

New equivalent€25k

Market quality✅ Good

Standvirtual.com and OLX Portugal are main platforms. Good supply of German, French, Spanish imports. Prices are moderate. Many expats find buying a Portuguese-registered car avoids ISV entirely.

Driving licence (expats)

EU licences directly exchangeable. Non-EU (RU/BY): valid 6 months from getting Portuguese residence. Exchange requires written exam; practical exam may be required. Apply at IMT office.

Key gotchas

• ⚠ISV (first registration tax) can add €2,000-8,000 to a car imported from outside Portugal — always buy Portuguese-registered cars
• ⚠RU/BY licence holders must pass written exam (theory test) to get Portuguese licence — study the Portuguese code
• ⚠Lisbon and Porto parking is expensive and scarce; monthly garage €80-150 often necessary

Portugal is deceptively medium-cost: annual running costs are low, but ISV can blindside expats importing their car from Germany or France. Always buy a car already registered in Portugal to avoid it.

Data as of 2026-Q1. Not financial advice.