For 2026, 209 of 308 councils will return at least part of their IRS share to residents. Lisbon gives back all 5%, Porto half
Each council is entitled to up to 5% of the IRS income tax paid by its residents and decides for itself how much of it to keep. The rest goes back to residents: their tax in the annual assessment is reduced by that amount. According to a count by the newspaper Jornal de Notícias, 209 of the 308 councils have given up part or all of their 5% for 2026: 44 give it all back to residents and 165 give back part of it, while 99 keep the full amount. Of the €748 million the councils could have received, they will take €510 million, and €238 million will stay with residents (Observador press review).
Every council notified the tax authority of its share for 2026 by the end of 2025, and all the rates are published on the Portal das Finanças. Lisbon keeps 0%, so its residents get back the full 5%. Porto and Vila Nova de Gaia keep 2.5%, Braga 3%, Setúbal 3.3%, Amadora and Sintra 3.5%, Cascais and Faro 4.5%, and Oeiras 4.7%. Loulé and Funchal also give everything back to residents. Almada, Odivelas, Seixal, Coimbra and Leiria take the full 5%, so their residents will get nothing back.
The refund is based on your tax after all deductions: it is that tax multiplied by the difference between 5% and the council's share. If your tax for the year after deductions is €4,000, you will get back €200 in Lisbon, €100 in Porto and €60 in Amadora. The refund will be applied when your 2026 tax return, filed in spring 2027, is assessed; on the tax assessment notice (nota de liquidação) it appears as the line "Benefício municipal". You do not need to apply for it.
What you get back depends on the council where your tax address (domicílio fiscal) is registered: if you have moved but Finanças still has your old address, you will get what the old council gives back. Councils are now deciding again for 2027 income: Amadora, for example, will return 1.75% instead of 1.5%. Our guide "How to file your first IRS tax return in Portugal" explains how to file a return.
