Cape Verde Real Estate Index

On January 1, 2026, Cape Verde implemented its most significant property tax reform in over 25 years. The old Imposto Único sobre o Património (IUP) — a single tax covering both...

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22 February 2026 · 8 min read

Cape Verde's 2026 Property Tax Reform: What Changed and What It Means for Buyers

Tax Legal 2026

Last updated: February 2026. Rates and effective date verified against the Boletim Oficial on 19 June 2026.

On 1 January 2026, Cape Verde implemented its most significant property tax reform in over 25 years. The former Imposto Único sobre o Património (IUP) — a single tax covering both property transfers and annual ownership — has been replaced by two separate, modern tax codes.

If you're buying, selling, or holding property in Cape Verde, here's what you need to know.

What Changed

The reform was enacted through Lei n.º 54/X/2025, which approves the Código do ITI, and Lei n.º 55/X/2025, which approves the Código do IPI — both published in the Boletim Oficial (I Série n.º 46, 6 June 2025) and in force since 1 January 2026.[1][2] They replace the former IUP with two distinct taxes:

ITI (Imposto sobre a Transmissão de Imóveis) — a transfer tax paid when property changes hands.

IPI (Imposto sobre a Propriedade de Imóveis) — an annual property tax paid by owners.

This separation brings Cape Verde in line with how most European countries structure property taxation and represents a deliberate modernization of the system to match the country's evolving real estate and tourism sectors.

ITI: The New Transfer Tax

The ITI is a municipal tax levied on the transfer of real estate, whether the transfer is for payment or free of charge. Revenue goes directly to the municipality where the property is located.

Key Details

  • Rate: The general ITI rate is 1%. A 3% rate applies where the transferor or acquirer benefits from a privileged-tax regime, as defined in the Código Geral Tributário (Código do ITI, art. 11.º).[1]
  • Basis: The tax is applied to a taxable value set under the code, which is not necessarily the purchase price; it should be verified for the specific property and transaction.
  • Scope: The ITI applies to rural, urban, and mixed-use properties. It covers not just full ownership transfers (purchase and sale) but also partial forms of property rights.
  • Expanded coverage: Unlike the old IUP, the ITI now captures a broader range of transactions that have the economic effect of a property transfer. This includes successive assignments of contractual positions in promissory purchase agreements and the use of irrevocable powers of attorney — practices previously used to transfer effective control of property without triggering transfer tax. This is a significant anti-avoidance measure.

What This Means for Buyers

Worked example (hypothetical, assumed taxable value): on an assumed taxable value of €150,000, a 1% general ITI rate implies about €1,500 in ITI; a 3% rate may apply in privileged-tax-regime cases. This is an illustrative calculation, not a quoted figure — the purchase price does not necessarily equal the legally assessed ITI base. Total acquisition costs also depend on notary, registration, legal fees, and any applicable duties or municipal charges, so buyers should confirm the full settlement for the specific property.

Timing matters: Tax settlement is part of completing and registering the transfer. Ensure your lawyer confirms the current payment process and timing with the municipality before completion.

IPI: The New Annual Property Tax

The IPI replaces the annual ownership component of the old IUP with a more transparent and objectively grounded system.

Key Details

  • General rate: The general IPI rate is 0.1% (Código do IPI, art. 28.º).[2]
  • Construction land: A 0.15% rate applies specifically to terrenos para construção (construction land). Crucially, its special taxable base is set at 10% of the value of the buildings planned for the plot — not the raw land value or the purchase price (Código do IPI, art. 23.º).[2]
  • Valuation method: Properties are assessed on objective criteria by Municipal Assessment Committees (Comissões Municipais de Avaliação), using a uniform methodology — a departure from the old system, where many valuations had not been updated in years and often bore little relationship to market values.
  • Surcharges: The IPI rate is increased by 25% for vacant, ruined, or degraded urban property, and by 10% for property whose principal exterior façade is unfinished (Código do IPI, art. 24.º). Owners should verify any exposure with the municipality.[2]

What This Means for Owners

For many urban property owners, the 0.1% general IPI rate may be lower than historic IUP bills. The actual amount depends on the taxable value, property type, municipal assessment, and any surcharge exposure.

However, as Municipal Assessment Committees complete new property valuations, assessed values may change. Properties that were significantly undervalued may see their assessments — and therefore their tax obligations — increase.

Why the Reform Happened

The former IUP framework was created in 1998 and took effect under the applicable implementation timetable. Over time it accumulated problems: property valuations were outdated, often based on pre-2008 assessments that no longer reflected market reality; the structure did not account for modern practices like contractual-position assignments; and the lack of penalties for neglected properties contributed to abandoned buildings in some urban areas.

Cape Verde's real estate and tourism sectors have grown substantially over that period — through new resort developments, urban expansion, and a growing middle class. For current, source-attributed tourism volumes, consult the Instituto Nacional de Estatística (INE) directly; figures change each reporting period and should be taken from the relevant INE publication rather than a static guide.

The government's stated goals for the reform are greater tax justice, improved transparency, more efficient collection, and stronger municipal finances — the revenue from both taxes goes directly to local municipalities.

Impact on the Green Card Program

Cape Verde's Green Card is a renewable residence authorisation for qualifying foreign property investors (€80,000 where the municipality's GDP per capita is below the national average, €120,000 where it is equal to or above it). The original framework includes specified tax benefits — exemption from the former IUP and from IRPS (Lei n.º 30/IX/2018, art. 6.º).[3]

The 2026 ITI and IPI codes preserve benefits established under special legislation (Código do ITI, art. 6.º, n.º 3; Código do IPI, art. 11.º, n.º 2), but they preserve those benefits in general terms and do not name the Green Card statute. Whether and how a benefit applies to an individual acquisition must be confirmed with qualified Cape Verdean counsel and the competent tax authority.[1][2] Do not assume the benefits automatically disappeared, nor that every Green Card buyer automatically receives them.

What You Should Do

  • If you're buying in 2026: Budget for ITI at the general 1% rate (3% in privileged-tax-regime cases), applied to the legally assessed base rather than necessarily the purchase price — confirm the base and settlement for your transaction.
  • If you already own property: Monitor whether your municipality conducts a new property valuation under the IPI framework. Your annual tax bill may change depending on property type, taxable value, and any surcharge exposure.
  • If you're selling: Be aware that the expanded ITI scope covers more types of transactions. Discuss with your lawyer how the new rules apply to your specific situation, particularly if the transaction involves promissory contracts or contractual position assignments.
  • In all cases: Work with a Cape Verdean lawyer who is up to date on the new legislation. The reform is substantial, and the interaction between the two new codes and other elements of the tax system (capital gains, inheritance, Green Card benefits) requires professional guidance.

Monitoring the Market

Property tax changes affect pricing and transaction activity. The Cape Verde Real Estate Index tracks public listings across the market and publishes source-linked context, including median asking prices by island and tracked inventory levels.[4]

Stay informed at the market data page.

Frequently Asked Questions

What is the property transfer tax in Cape Verde?

Since 1 January 2026, the transfer tax is ITI (Imposto sobre a Transmissão de Imóveis). The general rate is 1%, with a 3% rate in cases involving a qualifying privileged-tax regime. Ask a qualified local lawyer to verify the taxable base and applicable rate before completion.

What is the annual property tax in Cape Verde?

The annual property tax is IPI (Imposto sobre a Propriedade de Imóveis). The general rate is 0.1%; a 0.15% rate applies specifically to terrenos para construção (construction land) on a special taxable base set by the law. Statutory uplifts apply to vacant, ruined or degraded urban property and to unfinished principal façades.

Do Green Card holders get tax benefits?

The original Green Card framework includes specified tax benefits, and the 2026 ITI and IPI codes preserve remissions established under special legislation. Whether a specific benefit applies to your transaction must be confirmed with a qualified local lawyer and the competent tax authority — it is neither automatically lost nor automatically granted. See the Green Card guide.

Related Guides

Sources

  1. Lei n.º 54/X/2025 — Código do Imposto sobre a Transmissão de Imóveis (ITI) — Assembleia Nacional de Cabo Verde. Boletim Oficial, I Série, n.º 46, 6 de junho de 2025. art. 11.º (taxa de 1%; taxa de 3% quando o alienante ou adquirente beneficiem de regime de tributação privilegiada, nos termos do Código Geral Tributário); art. 6.º, n.º 3 (mantêm-se aplicáveis os benefícios fiscais previstos em diplomas especiais); entrada em vigor a 1 de janeiro de 2026. Official document (Legislation; accessed 19 June 2026).
  2. Lei n.º 55/X/2025 — Código do Imposto sobre a Propriedade de Imóveis (IPI) — Assembleia Nacional de Cabo Verde. Boletim Oficial, I Série, n.º 46, 6 de junho de 2025. art. 28.º (taxa de 0,1%), art. 23.º (terrenos para construção: valor tributável = 10% do valor das edificações previstas, taxa de 0,15%), art. 24.º (agravamento de 25% para prédios urbanos devolutos/em ruínas/degradados e de 10% para fachadas exteriores principais por concluir); art. 11.º, n.º 2 do Código (mantêm-se em vigor os benefícios fiscais previstos em diplomas especiais); art. 5.º da Lei n.º 55/X/2025 (Remissões: as referências ao Regulamento do IUP passam a referir-se ao presente Código); entrada em vigor a 1 de janeiro de 2026. Official document (Legislation; accessed 19 June 2026).
  3. Lei n.º 30/IX/2018 — estatuto diferenciado do titular de segunda residência (Green Card) — Assembleia Nacional de Cabo Verde. Boletim Oficial, I Série, n.º 23, 23 de abril de 2018, p. 539. arts. 3.º (limiares €80.000/€120.000, PIB per capita municipal, fallback por ilha), 6.º (isenção de IUP/IRPS), 8.º (renovação de 5 em 5 anos, e por 10 anos a partir da segunda renovação). Official document (Legislation; accessed 19 June 2026).
  4. Cape Verde Real Estate Index — market data — AREI. live, authoritative median asking price and tracked inventory by island; generated from current records, not frozen into prose. AREI (AREI dataset; accessed 19 June 2026).

This article is for informational purposes only and does not constitute tax or legal advice. Tax legislation is subject to change and interpretation, and rates apply to a legally assessed taxable base that is not necessarily the purchase price. Always consult a qualified Cape Verdean tax advisor or lawyer for advice specific to your situation.