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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

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old Imposto Único sobre o Património (IUP) — a single tax covering both property transfers and annual ownership — has been replaced by two separate, modern tax codes.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, enacted through Law No. 54/X/2025 and Law No. 55/X/2025, replaced the old 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: Current tax summaries generally describe ITI as 1% of taxable value, with a 3% rate in cases where the seller or buyer benefits from a privileged tax regime.
  • Basis: The tax is applied to taxable value, which 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 that were previously used to transfer effective control of property without triggering transfer tax. This is a significant anti-avoidance measure.

What This Means for Buyers

For a €150,000 taxable value, a general 1% ITI rate would imply about €1,500 in ITI; a 3% rate may apply in privileged-tax-regime cases. 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

  • Base rate: Current summaries generally describe IPI as 0.1% for urban property and 0.15% for land.
  • Valuation method: Properties will be assessed based on objective criteria by Municipal Assessment Committees (Comissões Municipais de Avaliação), using a uniform methodology. This is a departure from the old system, where many property valuations hadn't been updated in years (or decades) and often bore little relationship to actual market values.
  • Surcharges: Surcharges may apply for vacant, ruined/degraded, or unfinished-facade properties. Buyers and owners should verify any exposure with the municipality.

What This Means for Owners

For many urban property owners, the 0.1% 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 old IUP system, in place since 1998, had accumulated significant problems. Property valuations were outdated, often based on pre-2008 assessments that no longer reflected market reality. The tax structure didn't account for modern real estate 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 transformed dramatically since 1998. Tourist arrivals have grown from around 200,000 per year in the early 2000s to over 1.2 million. International property investment has increased substantially. New resort developments, urban expansion, and a growing middle class have all changed the landscape.

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 residency-by-investment program grants permanent residency to foreign property investors meeting certain thresholds (€80,000 in lower-GDP areas, €120,000 in higher-GDP areas like Sal). The program historically offered IUP exemptions and reductions.

With the transition to the new ITI/IPI framework, investors should verify with a qualified lawyer how the Green Card tax benefits translate under the new codes.

What You Should Do

  • If you're buying in 2026: Budget for ITI using the rate confirmed for your transaction. Current summaries generally describe ITI as 1% of taxable value, with 3% in privileged-tax-regime cases.
  • 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, yields, and transaction volumes. KazaVerde tracks public listings across the Cape Verde market and publishes source-linked market context including median prices by island and tracked inventory levels.

Stay informed at kazaverde.com/market-data

Frequently Asked Questions

What is the property transfer tax in Cape Verde?

Since January 2026, the transfer tax is called ITI (Imposto sobre a Transmissão de Imóveis). Current tax summaries generally describe ITI as 1% of taxable value, with a 3% rate in privileged-tax-regime cases. Ask a qualified local lawyer to verify the taxable value and applicable rate before completion.

What is the annual property tax in Cape Verde?

The new annual property tax is called IPI (Imposto sobre a Propriedade de Imóveis). Current summaries generally describe IPI as 0.1% for urban property and 0.15% for land. Surcharges may apply for vacant, ruined/degraded, or unfinished-facade properties.

Do Green Card holders get tax benefits?

Yes. Green Card holders may receive transfer-tax and annual property-tax benefits. Verify the specific application with your lawyer, as the transition to the new tax codes may affect implementation.

Related Guides

This article is for informational purposes only. Tax legislation is subject to change and interpretation. Always consult a qualified Cape Verdean tax advisor or lawyer for advice specific to your situation.