Usucapio (adverse possession), from the Latin usucapio: “to acquire by use”, is a form of acquisition of the property rights in function of having used or occupied a property continuously and unquestionably as if the holder were the real owner. In English Common Law, the equivalent of usucapio is commonly referred to as “adverse possession”. Continue reading
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:
The new regulatory restrictions implemented since October of last year have failed to slow demand for central Lisbon properties. While new Local Lodging applications dropped by 60%, foreign investors continue to seek out and buy property in historical districts as real estate sales soared by 38% over the period. While the “AL” sector is still significant, there are clearly other factors driving the market as well.
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.
As a relatively new tax, it is not surprising that many have been caught unaware of their liability to pay AIMI and, more importantly, how they can avoid the disturbing consequences. The additional assessment to IMI (Adicional Imposto Municipal Imobiliário) is sending shock waves to individuals and company owners who unwittingly find themselves under the weight of this added fiscal obligation. Continue reading
Despite positive evolution in recent years, Lisbon still has many buildings that are either abandoned, poorly maintained or even in ruins. According to data from the Lisbon Chamber of Commerce in 2018, there are 2,626 buildings in the city declared totally or partially vacant and 7,230 in poor condition, concentrated in the city’s historic neighbourhoods. Experts speak of the need for €4 billion in urgent rehabilitation works in the capital and over €24 billion nationwide.
Upon approval within the framework of urban renovation, property owners can benefit from the following tax incentives:
- Long-term rental income assessed at 5%;
- “IMI” exemption for 5 years;
- “IMT” exemption for the acquisition of rehabilitated properties;
- 30% tax deduction under “IRS” for costs borne by the owner;
- Capital gains at the rate of 5%.
It is the responsibility of the city council to verify the state of conservation of the property both before and after the restoration. Rehabilitation must maintain building façades, the number of floors above ground as well as any structural elements of heritage value (vaults, archways, metal or wooden structures, etc.)
UK nationals continued to invest heavily in residential real estate in Portugal in 2016. Brits made up the largest group of foreign investors with a 31% share of transactions carried out by non-residents. France (19%) and the Benelux and the Scandinavian countries (17%) were the other two most significant buyers in the Algarve.
A series of factors contribute to the recent surge in prices in the real estate market in Lisbon in particular and throughout Portugal in general.
- An exodus of residents over the past half century from the historical centres;
Until the recent boom, central Lisbon has been experiencing degradation and urban flight over the past 50 years. Continue reading
“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%.