Portugal's car tax moves to instalments in 2027. Miss one and the rest fall due at once
Decree-Law 161/2026 retires the registration-anniversary date. From 2027 the IUC is assessed once a year per taxpayer, covering every vehicle you own on 1 January, and the combined total decides whether you pay in one, two or three instalments.
For nearly two decades the IUC has run on one stubborn rule: you pay it in the month your car was first registered. Own three cars bought in three different seasons and you keep three dates in your head, and the penalty for forgetting never much cared whether the fault was yours or the calendar’s.
That is ending. Decree-Law 161/2026 was published on 4 August and takes effect from 1 January 2027, which is worth saying plainly up front: nothing at all changes during 2026. If your car’s anniversary falls in November, you pay in November, exactly as before.
After that the tax starts behaving like the property tax. One assessment a year, issued by the end of April, with the option to split the bill.
The new calendar, and the odd year in between
The permanent regime sits in article 17 and is easy to hold in your head. Up to 100 euros, one payment in April. Between 100 and 500 euros, two payments, April and October. Above 500 euros, three, in April, July and October. Anyone who would rather be done with it can still settle the whole amount by the last day of April, instalments or not.
Except that 2027 does not follow that calendar. Article 6 builds in a transition year so nobody is billed twice within a few months, and its dates are different: up to 500 euros, a single payment in October; above that, two payments, in July and October. This one is worth pinning down, because several outlets printed “April and October” for 2027 and the decree says July and October. The April calendar only genuinely starts in 2028.
Your cars are now counted together
This is the part almost nobody read, and it is the part that changes real arithmetic. Article 16 says the tax is assessed annually per taxpayer, covering every vehicle registered in your name on 1 January. Article 17 then points at the combined total of that annual assessment when deciding how many instalments you get.
The bands, in other words, stopped being per car and became per person.
Two older cars that would each sit comfortably under 100 euros can add up to 140 and land in the two-instalment band. Three mid-range vehicles can push the total past 500 and turn one bill into three dates. None of this raises the tax itself, which is still calculated vehicle by vehicle. It changes the shape of the bill, and for anyone running a small fleet, a work van, or a motorbike parked next to the car, it changes it enough to be worth doing the sums before April 2028.
Missing one instalment costs more than it looks
Article 17, paragraph 9, is a single line: failure to pay one instalment makes the remaining ones immediately due.
The rule is familiar from other taxes, but read what it does here. The state has just invited people to split the bill in two or three, and in the same breath established that one slip makes the entire rest of the year payable at once. The people most likely to split are the people who did not have the full amount in April, and they are the same people now carrying the risk of the whole invoice landing in October.
There is something given back, and it is new. The decree adds an article 25 to the IUC code establishing that the deadlines for complaint and judicial challenge run from the end of the voluntary payment period for the first instalment, or the only one. The code had not said so expressly before.
The deadline that appears at the end of February
The third detail is spread across three articles and none of them is the one the coverage quoted. Exemptions must now be evidenced to the tax authority by the last day of February (article 16, paragraph 8). The elements under article 7’s paragraph 3(b) follow the same deadline. And, most consequentially, the annual assessment only covers vehicles the tax authority knows about by the last day of February (article 16, paragraph 9).
February becomes the month your car’s tax year is sealed, two months before the bill turns up. There are carve-outs from the duty to prove, listed in the same article, among them electric vehicles and those belonging to the security forces.
One closing note for anyone using the disability exemption under article 5, paragraph 2(a): it is now capped at one vehicle per beneficiary per year and at 240 euros a year.
All of it fits a pattern Portugal already applies elsewhere, the same logic that makes the income tax return always close on 30 June rather than on a date personal to you. And if you brought a car in and claimed the ISV exemption on transferring residence, the answer has not changed: that exemption covers the entry tax, not the circulation one. It is only that from 2027 the IUC stops arriving in the month of your Portuguese plate and starts arriving in April, like everyone else’s.
Quick questions
Do I need to do anything in 2026?
No. The decree takes effect from 1 January 2027, and this year’s tax still falls due on your registration anniversary.
Will I pay more tax?
Not because of this change. The amount is still calculated per vehicle on the same tables. What changes is when you pay it and in how many parts.
What if I buy a car mid-year?
In the year a vehicle is first registered in Portugal, the tax is still assessed and paid within 30 days of the end of the legal registration deadline. That first tax period runs from the registration date to 31 December.
Image: Kolforn / Wikimedia Commons (CC BY-SA 4.0)
