“IMI” (Municipal Property Tax) is a tax applied on the value of the rateable value (VPT) of all real property within the national jurisdiction, reverting in favour of the 308 municipalities.
Each township is free to determine the tax rate between 0.3 – 0.5%.
Exemption from IMI
Under IMI rules, any property owner who has annual taxable income below €15,295 can apply for an exemption. If the waiver is granted, it only applies to the following fiscal year. In 2016, IMI rates were reduced, with 127 municipalities having the minimum rate and only 30 the maximum amount.
New IMI Exemption Rules
There are new rules for taxpayers to be exempt from paying IMI. In the case of acquisition and leases after 2012, current legislation indicates that the exemption period is three years for properties with a VPT up to a maximum of €125,000. To qualify, owners must prove within a maximum period of 60 days that the property is their primary and permanent home and that taxable household does not exceed €15,295. The same taxpayer cannot be exempt from payment of IMI on two different properties in the same tax year. Buildings, storerooms or garage associated with principal residence may also qualify. IMI is also exempt from urban buildings that have undergone urban rehabilitation for two years counting from the year of issuance of their respective city license.
If the property was acquired or rented before the end of 2011, then the old rules still apply. According to legislation in force until the end of 2008, tax waivers were as follows:
- If the “VPT” was less than €157,500, the exemption period was eight years:
- If the rateable value is between €157,500 and €236,250, the exemption period was four years.
Other IMI exemptions
As of 2017, the following exemptions are in force:
- IMI exemption for low income families, even when the household has debts to the State;
- Maintenance of the IMI exemption granted to the elderly when they move to nursing homes;
- Change to family IMI, by means of a fixed deduction, assigned by the municipalities, for each child instead of the reduction (in an absolute value) of the IMI rate in percentage (which depended on the property value of the property). Thus, families with a child have a fixed deduction of €20, with two children – €40 and three or more children – €70;
- Reduction of the maximum municipal “IMI” rate (revised every year) from 0.5% to 0.45%. Applicable to 2017 and with practical effects on the “IMI” to be charged in 2018;
- “IMI” safeguard clause for the elderly, over 65 years old.
How and where to apply
If you believe that you may qualify for an exemption, you must apply at the local Finanças office in your area of residence. This application must be submitted annually, always by June 30.
In the case of a new property, the deadline is 60 days after the registration of the deed.
Requests for exemption must present:
- Identification of the property owners:
If there is more than one, all owners must indicate the taxpayer numbers (“NIF”).
- Identification of the building:
The property must be identified by a) parish, b) article, c) fraction, d) date of purchase and e) date of occupation.