Since 1 January 2026, owning property in Cape Verde is no longer governed by the former single property tax (IUP) but by a new annual municipal tax set out in an entirely new code: the IPI, Imposto sobre a Propriedade de Imóveis. The law that introduced it, Lei n.º 55/X/2025 of 6 June 2025, was published in the Boletim Oficial n.º 46, I Série, on 6 June 2025, and it enters into force on 1 January 2026 (art. 7 of the law). This guide sets out what the code actually says: who pays, on what basis, at what rate, when, and how a valuation can be challenged.
From the IUP to the IPI: what changes on 1 January 2026
The same law approves two separate codes: the IPI Code and the ITI Code. The legislature deliberately separated the taxation of property from the taxation of transfers, whereas the previous system relied on a single property tax.
The preamble explains the diagnosis: the property registers (matrizes prediais) were deeply out of date and the country had no real system for valuing property. From the entry into force of the new code, Lei n.º 79/V/98 of 7 December (which had created the IUP), Decreto-Lei n.º 18/99 of 26 April and all scattered legislation on these matters are repealed.
Who pays the tax, and as of what date
Article 8 lays down a simple rule: “O imposto é devido pelo proprietário do prédio a 31 de dezembro do ano a que o mesmo respeite”, that is, the tax is due from the owner of the property on 31 December of the year concerned. It is therefore the position on 31 December that determines who owes the tax for the year concerned.
The same article covers several particular cases:
- where there is a usufruct or a surface right, the tax is due from the usufructuary or the holder of the surface right, after construction begins or the planting is completed;
- a person is presumed to be the owner, usufructuary or surface-right holder if they appear — or should appear — as such in the register on that date or, where the property is not registered, if they hold possession of it on that date;
- where a property forms part of an undivided estate, the tax is due from the estate, represented by the cabeça-de-casal.
Worth noting: article 8 draws no distinction between residents and non-residents. The test is ownership of the right on 31 December, not residence.
What the tax is charged on: rustic, urban or mixed property
The IPI falls on “o valor tributável dos prédios rústicos, urbanos e mistos, situados no território de cada município”, and it is revenue for the municipality where the property is located. Taxation is therefore built on the concept of prédio (a unit of landed property) rather than imóvel.
The code organises that classification:
- a rustic property (prédio rústico) is, in particular, land outside an urban settlement that is not classifiable as building land and that is used, or normally intended, for agricultural, forestry or livestock purposes;
- an urban property (prédio urbano) is any property that must not be classified as rustic;
- a mixed property (prédio misto) is one made up of rustic and urban parts with no single predominant part.
There is also a useful precision for flats: each autonomous unit under the horizontal property regime is treated as a separate prédio for IPI purposes. And beyond legally defined perimeters, a settlement counts as urban when it comprises at least ten dwellings served by urban infrastructure.
Urban properties fall into four categories: residential; commercial, industrial or services; building land; and “other”.
How the taxable value is calculated
The taxable value is determined under the rules of the code, and the valuation of properties is the responsibility of the municipal valuation commissions (comissões municipais de avaliação), each made up of three expert valuers (art. 26). The stated aim is to move away from subjective appraisal: the preamble stresses a framework based “totalmente assente em fatores objetivos”, drawing in particular on average construction cost, gross construction area, price per square metre, location, quality and comfort, and age.
The code also sets a coeficiente de vetustez scale (art. 22), running from 1 for a property under two years old down to 0.40 for one over sixty years old.
A practical point for buyers: as long as the municipality has not carried out a general valuation of urban properties in its area, those properties are valued under the code on the first transfer, whether for consideration or free of charge, after the code enters into force (art. 3 of the law).
The rates set by the code
The chapter on rates contains a single article. Article 28 provides: “A taxa do imposto sobre a propriedade de imóveis é fixada em 0,1 %”.
There is a specific rule for building land: the taxable value of the land corresponds to 10% of the value of the buildings planned on it, and a rate of 0.15% applies to that amount (art. 23).
Increases on vacant, ruined and dilapidated property
Article 24 provides for an increase on certain urban properties:
- for urban properties that are devolutos (left vacant), in ruins or dilapidated to the point where their state of conservation endangers the safety of people and property and public health, a 25% surcharge applies to the amount payable;
- the text also covers urban properties whose main façade cladding has not been completed.
One point of caution: the wording of art. 24(2) refers to “a taxa agravada de 10%, referida no número anterior”, while paragraph 1 sets 25%. The published text therefore contains an internal ambiguity that should be read in the official version before any application.
These increases are not fixed: they are raised annually and cumulatively by 20%, up to a maximum of five years, for as long as the conditions that triggered them persist (art. 24(4)).
Another useful precision: the taxable value of urban properties in ruins is determined as if they were building land, with the increase provided for in article 24 (art. 25(4)).
Exemptions
Article 11 lists the properties exempt from IPI:
- the State and local authorities;
- properties classified as national monuments or buildings of public interest;
- properties belonging to families registered at levels 1 and 2 of the Cadastro Social Único;
- rustic properties devoted exclusively to agricultural, forestry and livestock production, together with the buildings on them serving the same purposes.
The code adds that tax benefits provided by special statutes remain in force, as do those resulting from agreements between the State and any person, or from international conventions.
Assessment and payment: February, then April
Assessment is annual and handled by the municipal tax service: it is based on the information in the registers (matrizes) at 31 December of each year and must be carried out by the end of February (art. 31).
Payment falls during the month of April. It may be made in two equal instalments, due in April and September, where the amount of tax assessed (coleta) exceeds 2,000$00 (art. 37(1)).
The assessment notice must set out the properties concerned, the taxable value and the tax due, and lists containing those details are available for consultation at the municipal tax service (art. 32). Where an additional or late assessment is made, the taxpayer is notified to pay within thirty days.
Challenging the valuation
If the taxpayer or the municipal council disagrees with the valuation of an urban property, a second valuation may be requested or initiated within thirty days of notification (art. 27).
The second valuation commission has three members: one appointed by the municipal tax service, one appointed by the taxpayer (or the taxpayer in person) and a third, chosen by the parties, who chairs it. The request has suspensive effect on the definitive fixing of the taxable value and, consequently, on the assessment of the tax. The outcome may then be challenged before the courts under the general rules of the Código Geral Tributário.
The transitional +10% cap over five years
Moving to a new valuation formula raises the risk of abrupt increases. The law therefore provides a transitional safeguard: if applying the rate to the amount produced by the new formula leads to a tax increase of more than 10% compared with the amount paid in the immediately preceding year, that increase is reduced to that limit (art. 4 of the law). The cap applies only for five years from the date the code enters into force.
What this means in practice for a foreign owner
Three obligations are worth planning for:
- declare: registration and updating of the property in the register is based on a declaration by the taxpayer, within ninety days of one of the events set out in the code (completion of works, change of classification, end of an exemption, and so on);
- prove payment: public bodies involved in acts concerning the creation, transfer, registration or litigation of rights over properties must require proof that the property is registered and may not carry out those acts without proof that the tax due has been paid (art. 40);
- expect data matching: suppliers of water, energy and fixed telephony must report to the central and municipal tax authorities, by 31 January, the contracts concluded with their customers and any changes made in the previous year (art. 41).
Checklist before buying, and while holding
- Check the actual classification of the property: rustic, urban or mixed — and, for an urban property, its category (residential, commercial, building land).
- Check the position in the register: is the property registered, up to date, and in the seller's name?
- Anticipate the first valuation if the municipality has not yet carried out a general one: it happens on the first transfer.
- Plan the calendar: assessment by the end of February, payment in April.
- If the property stays vacant, in ruins or dilapidated, factor the increase and its annual escalation into the cost of holding.
- Keep proof of payment: it can be required for acts concerning rights in rem.
- If you disagree with the value, act within the thirty-day window.
Frequently asked questions
Before you sign: price the holding cost, not just the purchase
The purchase price is only part of the cost. Between the taxable value, the rates, any increases and the payment calendar, the annual holding cost should be planned up front, ideally before signing. Compare properties with their real cost of ownership in mind, building your questions on the documents in the file.
To go further on property matters, you can also read our guides on buying a plot in a subdivision and on short-term rentals, both available from the blog.
This guide describes the text published in the Boletim Oficial n.º 46, I Série, of 6 June 2025. No later amendments were researched. It is not tax advice: for a specific situation, consult a professional in Cape Verde.