On 1 January 2026, one of Cape Verde’s most significant tax reforms since the 1990s came into force: the Single Wealth Tax (IUP)) was repealed and replaced by two new taxes — the IPI and ITI.
The IUP had been accumulating problems over the course of 25 years: outdated asset valuations, rules that were ill-suited to market developments, and a limited ability to discourage speculative practices. The aim of the reform is to make the system simpler, fairer and more in line with economic activity, whilst strengthening the financial capacity of local authorities. (Source: BTOC Consulting, 2025; Law No. 55/X/2025; Law No. 54/X/2025)
| Previously (until December 2025) | After that (from January 2026) |
|---|---|
| P/E ratio at 1.5% (annual tax) | IPI at 0.1% (annual tax) |
| IUP at 1.5% (during the broadcast) | ITI to 1% (in the transmission) |
| Figures that are often out of date | Objective assessment by municipal committees |
| No surcharge for vacant properties | Increase of 25% + 20% per year |
(Source: PwC Cape Verde Tax Summaries, 2026; BTOC Consulting, 2025)
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The IPI is the annual municipal tax on the ownership of immovable property. It replaces the property component of the former IUP.
The owner (or holder of other rights in rem) as at 31 December of the relevant year. In the case of non-residents, the tax representative is jointly and severally liable for payment. (Source: Law No. 55/X/2025, Article 4; PwC Cape Verde Tax Summaries, 2026)
| Situation | Fee |
|---|---|
| General tax (urban properties) | 0.1% of the net asset value |
| Land tax | 0.15% of the net asset value |
| Vacant, derelict or dilapidated buildings | 0.1% + 25% (an annual increase of 20%) |
| Buildings with a main façade yet to be completed | 0,1% + 10% |
For urban buildings, the value is determined by a valuation based on objective criteria:
The Municipal Assessment Committees are responsible for this decision. (Source: PwC Cape Verde Tax Summaries, 2026)
If the application of the new IPI rate results in an increase of more than 10% compared with the amount paid in the previous year, the increase is capped at that percentage. This provision applies for five years from the date the IPI Code comes into force. (Source: PwC Cape Verde Tax Summaries, 2026)
A flat with a property value of 5,085,503$00 (CVE):
(Source: BTOC Consulting, 2025; calculations by S&D Consultoria)
IPI is paid annually, by 30 April of the year following that in which the chargeable event occurred. Payment is made to the local authority where the property is situated.
The following are exempt from IPI:
(Source: Law No. 55/X/2025, Article 12; consultoria.cv)
The ITI is the single municipal tax on the transfer, whether for consideration or free of charge, of property rights in respect of immovable property situated in Cape Verde.
In the purchase, sale, exchange, division or donation of property. The 2026 reform significantly broadened the tax base to prevent tax avoidance. (Source: Law No. 54/X/2025; Carla Monteiro & Associados, 2025)
O purchaser (buyer). In cases of division of property or exchange, the party receiving the property of greater value pays.
| Situation | Fee |
|---|---|
| Standard transmission | 1% based on the transaction value |
| Transfer with preferential tax treatment | 3% based on the transaction value |
Situations in which the seller or buyer benefits from the following are regarded as preferential tax regimes:
(Source: Law No. 54/X/2025, Article 6; PwC Cape Verde Tax Summaries, 2026)
The tax is assessed in the municipality before the broadcast. Payment must be made within three working days, failing which the transfer will have no legal effect. Proof of payment is required for registration in the land registry. (Source: BTOC Consulting, 2025)
The ITI now covers not only traditional purchase and sale contracts, but also:
These rules are designed to curb tax evasion by ensuring that transfers of economic ownership are taxed.
The sale of a property in Cape Verde results in a capital gain (profit) which is subject to tax. The rules vary depending on the investor’s status.
Capital gains are subject to IRPS (Income Tax for Individuals) at the rate of 10% on the profit generated.
Calculation of capital gains:
Capital gain = (Sale price)
– (Acquisition price, adjusted)
– (Deductible expenses)Deductible expenses:
Note: The 10% rate applies to both residents and non-residents. There is no exemption based on the length of ownership (unlike the former IUP regime, which provided for an exemption after 10 years). (Source: consultoria.cv; S&D Consultoria)
If the property belongs to a company, the capital gain forms part of the taxable profit and is subject to IRC (Corporate Income Tax).
(Source: Law No. 69/X/2025, 2026 State Budget; PwC Cape Verde Tax Summaries, 2026)
| Setting | Structure | Profit | Tax payable |
|---|---|---|---|
| Flat for sale (100,000 EUR) | Staff | 30,000 EUR | 3,000 EUR (10% IRPS) |
| Flat for sale (100,000 EUR) | Company (tourism) | 30,000 EUR | 3,000–6,000 EUR (10–20% IRC) |
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If the property is let, the income is taxed as property income.
Pay-as-you-earn: If the tenant is a company, it must withhold 10% from the rent and pay it to the tax authorities.
IRPS declaration: The owner must declare their property income annually. The following expenses are deductible:
VAT: Property lettings are, as a general rule, exempt from VAT. However, if the landlord is registered for VAT (which is compulsory for businesses in the tourism sector), they may deduct the VAT paid on maintenance and repair costs.
Income forms part of the company’s profit and is subject to corporation tax.
(Source: Law No. 69/X/2025, 2026 State Budget; consultoria.cv)
Rental income received by non-residents is subject to 20% withholding tax on gross income. (Sourceand: consultancy.cv)
| Appearance | First name | Company (Lda) |
|---|---|---|
| Annual IPI | 0.1% (exemption for owner-occupied property) | 0.1% (5-year exemption for tourism) |
| ITI on purchase | 1% | 1% |
| Income | IRPS (progressive scale) | IRC 20% (touring reductions) |
| Capital gains | IRPS 10% | IRC 20% (reductions) |
| Deduction of expenses | Limited | Wide |
| Responsibility | Unlimited | Limited to capital |
| Accounting | Simplified | Compulsory |
| Monthly cost | Bass | Midfielder (accountant) |
The decision between using one’s own name and a company name must be made before under the promise to buy and sell. Once the deed has been drawn up, changing the structure involves either selling the property (incurring capital gains tax) or setting up a company and selling the property to it (incurring property transfer tax).
Keep all receipts and invoices for:
Without supporting documentation, the expense is not tax-deductible.
Cape Verde does not levy inheritance tax. Transfer by inheritance is tax-neutral. If the aim is to pass the property on to heirs, selling it whilst still alive may be less efficient than transferring it upon death.
Under the new IPI scheme, the property value is updated periodically by the Municipal Valuation Committees. Selling before an update that significantly increases the property value may reduce the buyer’s future IPI liability.
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Yes, in most cases. The base rate for the IPI is 0.1%, compared with 1.5% for the IUP. However, for vacant or derelict buildings, the IPI may be higher due to surcharges. The safeguard rule limits the increase to 10% over the first 5 years.
The IPI is payable annually, by 30 April of the following year. For example, the IPI for 2026 must be paid by 30 April 2027.
Failure to pay will result in interest on arrears, fines ranging from 25% to 100% of the unpaid tax, inclusion in the register of outstanding debts and possible seizure of the property. Furthermore, it prevents the sale of the property (a certificate of no outstanding debt is required for the transfer of ownership).
O buyer pays the ITI. However, the seller must ensure that the property is free of tax liabilities (IPI, local council charges) before the deed of sale is signed.
Yes, but on certain conditions. If you are registered for VAT (as a company or self-employed person), the VAT paid on maintenance and repair work is deductible. For private individuals, VAT is not deductible, but it may be treated as part of the purchase price for the purposes of calculating capital gains.
No. Unlike the previous IUP regime, the new system does not provide for any capital gains tax exemption based on the length of ownership. The rate is a fixed 10% (IRPS) or 20% (IRC), regardless of the length of ownership.
The 2026 tax reform simplified and, in most cases, reduced the tax burden on property in Cape Verde. The IPI at 0.1% represents a significant saving for most property owners, whilst the ITI at 1% makes property transfers more predictable.
However, the complexity of tax legislation requires specialist guidance. Choosing the right structure (self-employment versus a company), making the most of tax incentives and planning for succession are decisions that must be taken with technical expertise and well in advance.
Don’t put off dealing with tax matters. S&D Consultoria supports you through every stage of your property investment.
S&D Consultoria, Lda. is a tax consultancy firm based in Mindelo, São Vicente, Cape Verde. It specialises in providing tax advice to property investors, construction companies and property developers.
Contact:
📍 28 William du Bois Street, Mindelo, São Vicente, Cape Verde
📧 info@consultoria.cv
🌐 www.consultoria.cv
This article is for information purposes only and is not a substitute for personalised tax advice. Tax legislation is subject to change. Always consult a qualified professional regarding your specific circumstances.
Last updated: 21 July 2026.S&D Consultoria, Lda. — Mindelo, São Vicente, Cape Verde
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