Tag Archives: IMI

State Budget 2021 – tax havens

29 Tuesday Dec 2020

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The imposition of IMI and IMT for companies directly or indirectly based in so-called tax havens, approved in the State Budget, does not distinguish between the jurisdictions with which Portugal has double taxation (ADT) and information exchange (ATI) agreements from those in which complete opacity prevails in capital movements. Sovereign funds and other investors from Oman, the United Arab Emirates or Qatar as well as investors based in Hong Kong – all included in the list of tax havens but with ADT with Portugal – will be some of the hardest hit. The same happens with the Cayman Islands, Jersey, Guernsey, Isle of Mann or Panama, where the funds are established, which aggregate a large part of institutional investors worldwide.

Tax exemptions for non-habitual residents amount to €548 million in 2018

09 Thursday Jan 2020

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The value of tax benefits to non-habitual residents keeps growing according to the “Tribunal de Contas” (National Audit Office). In 2018, there were €548 million in NHR exemptions granted to foreign pensioners. Nevertheless, this apparent tax giveaway would have never existed if the NHR regime had not attracted these foreigners to Portugal in the first place. For example, these pensioners paid almost €80 million to the state in Individual Income Tax (“IRS “) on non-exempt income. In addition, there are IMT, IMI and VAT levies which the Government collects above and beyond the scope of the Non-Habitual Residency scheme.

“IMI” updates in 2020 but with little change for most owners

03 Monday Jun 2019

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Location coefficients will be updated this year. ASAVAL (Association of Professional Appraisers), the Association that represents real estate evaluators, recognises that the market has gained stability, but reminds the public that the coefficients have to continue to reflect the dynamics of the market. The last revision of the Location Coefficient occurred in 2015 and had an impact on tax assessments for 2016, 2017 and 2018.

Upcoming rule changes to raise IMI in 2020

02 Thursday May 2019

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The “AT” (Tax Authority) has revealed plans to review the Location Coefficient (“CL”) of immovable properties by the end of August. The new localisation factor will be approved by the end of the year, coming into effect in January 2020. Finanças targets updates to the Ratable Value of real estate (“VPT”) at 85% of average property prices in each location.

One in four property owners pays “IMI” values below €100 in Portugal

02 Thursday May 2019

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There are almost 4 million demands for Municipal Tax on Real Estate (“IMI”) being issued this year. Nearly one million property rates fall below €100. This annual tax is levied based on the rateable value of real estate. In the case of urban property, the rate is set by local authorities in a range between 0,3% to 0,45%. It is also up to the municipalities whether or not to grant a tax discount to families with dependents: €20 when there is one dependent, €40 when there are two and €70 when there are three or more dependents.

IMI to skyrocket for vacant properties

26 Tuesday Mar 2019

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The government has reviewed the criteria for properties being considered “vacant”, which may imply an increase in IMI (Municipal Property Tax) by three to six-fold. The increase will occur when an abode is located in a “pressure zone” and has remained empty for more than two years. Lack of consumption of utilities such as water and electricity will be the prime indicators. Exempt from the concept of “vacant” are dwellings integrated in tourist developments or registered as Local Lodging as well as second homes not located in the same municipality where the owner is resident.

“IMI” due one month later in 2019

26 Tuesday Mar 2019

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There are new deadlines for the payment of the Municipal Property Tax (“IMI”). Instead of running between April and October as before, tax settlement will take place between May and November in 2019. “IMI” is paid in one go or in several instalments, depending on whether taxation is less or greater than €100. May is the month for single assessments when the tax due is under €100; or for the first instalment, in cases where the amount owed is greater. Second payments are in August when “IMI” exceeds €500. Finally, November is for final payments when taxation falls between €100 – €500 or third instalments if the levy is greater than €500.

“IMI” drops for 24,000 taxpayers seeking revaluation

26 Tuesday Mar 2019

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More than 90% of the taxpayers requesting a reassessment of their property based on an outdated “VPT” (Tax Asset Value) achieved a reduction in the “IMI” due (Municipal Property Tax). Properties were overvalued by more than €447 million. Updating the VPT (on which the tax rate applies) does not happen automatically. Legislation permits owners to call for a reappraisal three years after the previous one. This request – which is free of charge – can be made directly at the local tax office or via the Finanças Portal.