The “VPT” of your property is not directly related to construction costs or its market value (except for the soon-to-be-overhauled Location Coefficient). The Property Evaluation System (“Valor Patrimonial Tributário or VPT”) is a mathematical formula comprised of six factors, working as follows:
VPT = Vc x A x Ca x Cl x Cq x Cv
Factor nº1: “Vc” – the deemed value per m²
After several years without change, this value rises to €615.00 in 2019.
Factor nº2: “A” – Constructed Area and Implantation
The property areas (“A”) are a function of the presumed cost base of the constructed area and implantation. From the current Area Value of €615.00, the specific values are determined as follows:
|Type of Area||Coefficient|
|Covered Habitation Area||1|
|Garden and Patio areas
(up to 2x implantation)
To calculate this factor, add the different areas, previously multiplied by the above coefficients, then multiply by the cost per m² (€615).
Next, this base is altered by the following coefficients.
Factor nº 3: “Ca” – Type of Usage (0.08 – 1.2)
The next factor is Usage (residential, commercial, industrial, agricultural), each having been assigned coefficients. For Residential Usage, the coefficient is 1.0.
Factor nº 4: “Cl” – Location (0.3 – 3.0)
The Tax Authority has plans to recalculate the Location Coefficient (“CL”) of immovable properties. The reform targets updates at 85% of average property prices in a given area. The new localisation component should be approved by December and come into effect in January of 2020.
Factor nº 5: “Cq” – Quality of Construction (0.5 – 1.7)
This component works in opposing directions: attractive features, such as a swimming pool or central air conditioning, push up the value of your home. Living on a dirt track, as opposed to a tarmac road, diminishes the appraisal.
|Fixed Rate Components|
Closed Condominium 0.20
Single Garage 0.04
Collective Garage 0.03
Private Swimming Pool 0.06
Collective Swimming Pool 0.03
Tennis Court 0.03
Other Leisure Equipment 0.04
Central Air Conditioning 0.03
Elevator (< 4 stories) 0.02
No kitchen 0.10
No bathroom 0.10
No running water 0.08
No electricity 0.10
No gas 0.02
No sewage system 0.05
No paved road 0.03
Diminished living quarters 0.06
No elevator ( >3 stories) 0.02
In poor repair up to 0.10
Single Family Dwelling (0,0 – 0.20 %)
Construction Quality (0.0 – 0.15 %)
Exceptional Location (0.0 – 0.10 %)
Factor nº 6: “Cv” – Age of Construction (0.4 – 1.0)
Finally, the last coefficient is applied according to the year of construction, ranging from 1.0 for new property and 0.4 for buildings over 80 years old.