Is car tax increasing in 2026?

The Vehicle Circulation Tax (IUC) is an annual tax that all owners of vehicles registered in Portugal are required to pay. Information is circulating that the tax will increase. But is that really the case?

Much has been said about the IUC, mainly because, in February 2026, all vehicles will start paying this tax in that month, instead of in the month of registration, as was the case until now. This means that some drivers have to pay the IUC twice in a short period of time.

However, with that clarified, information is now circulating that the value of the IUC will increase.

According to the Portuguese government, the IUC rates will not be changed; that is, the base values will be maintained.

Given the circulation of false information, especially on social media, it is important to clarify that the Government will not increase the Vehicle Tax (IUC) for vehicles registered before or after 2007.

Therefore, the calculation method will remain the same as last year.

Remember that for vehicles registered before July 2007, the tax amount is determined exclusively by engine displacement and fuel type. For cars registered after that date, the calculation also includes environmental factors such as CO₂ emissions, year of registration, and fuel type, applying a higher tax rate to models with a greater environmental impact.

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