A new EU emissions standard, Euro 7, comes into force on 29 November. It sounds like a technical detail for engineers. It is not. In Portugal, vehicle tax at registration, the ISV, is calculated on CO2 emissions. When the allowed emissions ceiling gets tighter, more cars fall into higher tax bands. That means higher upfront prices, right when many households are already stretched by fuel costs and no relief in sight from VAT cuts.
What the rule actually changes
Euro 7 does not ban any type of car. It tightens the pollutant limits manufacturers must meet, especially for particulates and nitrogen oxides. Carmakers pass on the cost of meeting those limits, either through the sticker price or through the CO2 figure used to calculate ISV. According to reporting from Observador, the increase will not hit every car equally. Bigger engines and heavier, more polluting models see the largest jump. Small, efficient cars are affected less, and electric vehicles are largely untouched since the standard targets combustion emissions.
A worked example
Say a family has been eyeing a new petrol SUV at 25,000 euros, mid-size, moderate emissions, the kind many households actually buy. If the CO2 band this model falls into shifts up after 29 November, the ISV due at registration could rise by several hundred euros, in some cases 400 to 800 euros depending on the exact emissions class. That is not a marginal difference. It is close to what a family sets aside in a year for car maintenance.
Compare that to a smaller, lower-emission model in the same price range. It may sit in a band that barely moves, or one where the tax was already close to the new ceiling. The gap between the two cars, which used to be mostly about size and comfort, now has a tax component layered on top.
Two honest options, not one
If you were already planning to buy a new car in the coming months, say for early 2027, there is a real argument for buying before the cutoff. Locking in the current ISV calculation avoids the increase entirely. This only makes sense if the purchase was already on your list. Bringing forward a car purchase you were not otherwise going to make, just to dodge a tax change, usually costs more than it saves once you count financing, insurance and depreciation starting sooner.
If the purchase was not urgent, the better move is to widen the comparison. Look at a smaller engine, or a used car registered before the change, where the ISV was already fixed at purchase. A one or two year old car often carries none of this new cost, and depreciation has already done its work on the price. For many families, a well kept used car in the same size as their shortlist will end up cheaper on both the sticker price and the tax line, even before Euro 7.
What we do not know yet
The exact size of the increase per model has not been published city by city or brand by brand. Manufacturers set final prices closer to the date, and some may absorb part of the cost rather than pass it all on, at least for a while. The official ISV tables for 2026 registrations will confirm the bands. Until then, treat the "several hundred euros" figure as a planning range, not a fixed number for your exact car.
The one thing to do this month
If a car purchase is already on your calendar for the next few months, get a firm quote now and ask the dealer directly whether the price includes any Euro 7 related ISV adjustment. If it is not on your calendar, do not rush it. Instead, put the potential extra cost, whatever it turns out to be, into your monthly budget as a line item for the next few months, alongside fuel and any other rising costs. If you want to see how a car purchase, financed or in cash, would sit against your rent or mortgage and the rest of your spending, Household can show you that number without you doing the sums by hand.
FAQ
Does Euro 7 mean electric cars get more expensive too? No. The standard targets combustion engine emissions. Electric vehicles are not affected by this specific change, though other costs like insurance or IMI on home chargers are separate matters.
Will used cars also cost more because of Euro 7? Not directly. ISV is charged at first registration in Portugal. A used car already registered keeps its original tax treatment. Prices for used cars could shift slightly if demand rises, but there is no new tax event for them.
Is it worth buying a car early just to avoid the tax rise? Only if you were already planning the purchase. Bringing forward a car you were not going to buy soon usually costs more in financing and depreciation than the tax increase it avoids.