Police search two banks in €66 million property tax fraud investigation

Portuguese police have searched the headquarters of two banks as part of a major investigation into an alleged property tax fraud scheme believed to have cost the State more than €66 million.

The searches at Banco Carregosa in Porto and Banco Angolano de Investimentos in Lisbon formed part of Operation “Tax Free”, which saw authorities carry out a total of 53 searches across Lisbon, Porto and Setúbal this Wednesday.

According to the Judicial Police (PJ), investigators suspect an organised scheme involving the repeated creation of companies that were formally set up to buy and resell property but had “no real economic activity”. The PJ described them as companies commonly known as “shell companies”.

Investigators believe the companies were used to obtain exemptions from IMT – Portugal’s Municipal Property Transfer Tax – in circumstances where the tax should have been paid.

According to police, properties were repeatedly transferred between companies controlled by the same suspects for nominal amounts and without any corresponding movement of money, creating the appearance of normal property trading activity.

This allegedly allowed the companies to qualify for IMT exemptions intended for businesses genuinely involved in buying property for resale.

The companies were then allegedly marketed to Portuguese and foreign investors and used to acquire property, including portfolios of high-value assets and bank-owned property portfolios, without paying the tax due.

The PJ says the suspected offences took place between 2017 and 2025 and may constitute aggravated tax fraud.

“The loss caused to the State is estimated at more than €66 million,” the police force said.

Wednesday’s searches were carried out at private homes, companies, banks and law firms, with investigators seeking documents and other evidence linked to the alleged scheme.

The operation involved the PJ and Tax and Customs Authority (AT), as well as 13 public prosecutors, three investigating judges and a technical adviser from the Bank of Portugal.

Police said “various documents and items of significant evidential value” were seized during the operation.

The investigation is being led by the Central Department for Investigation and Criminal Prosecution (DCIAP).

DCIAP confirmed that the case is under judicial secrecy, meaning further details about the suspects and evidence gathered are not currently being made public.