Portuguese Property Taxes: Municipal Property Tax (IMI) and Wealth Tax (AIMI)
Table of Contents
Introduction
Property ownership in Portugal is an enticing prospect for many, be it for residential or investment purposes. However, understanding the tax implications associated with property ownership is essential for any investor or homeowner. Two key components of the Portuguese property tax system are the IMI (Municipal Property Tax) and the AIMI (Wealth Tax). This article delves into the intricate details of these two tax mechanisms, outlining their calculation methods, payment schedules, and available resources for accurate computation. We'll also touch on exemptions and special provisions to ensure that readers are well-equipped with comprehensive knowledge of the topic.
1. IMI (Imposto Municipal Sobre Imóveis): Municipal Property Tax
The IMI is an annual property tax that serves as a direct funding source for city councils in Portugal. It's levied on the taxable value of the property.
How It’s Calculated: The IMI is calculated by applying a rate to the property's VPT (taxable property value). This rate can vary depending on the year of the property, the municipality where the property is located, and the type of property (Prédio Urbano or Prédio Rústico).
Settlement Timing: This tax is paid every year for as long as you own the property on December 31st. It can be paid in installments depending on the total amount due:
One installment when the amount < 250 euros
Two installments when 250 ≤ amount ≤ 500 euros
Three installments when the amount > 500 euros
Resources: For a more precise calculation of your IMI, you can use the Portal das Finanças IMI calculator, filtering by year of the property, municipality, and type of building. In case you do not have access to Portal das Finanças yet, you can consult Idealista, but keep in mind that Portal das Finanças always has the most accurate and updated data.
Example (using Portal das Finanças)
VPT: 150.000€ District: Lisbon Municipality: Lisbon Type of building: Prédio Urbano Tax rate: 0.675%
IMI amount to pay: 0.675% x 150.000€ = 1.012,5€
NOTE: as this amount is > 500€, it can be paid in three installments.
1.1. IMI Tax Exemptions
While there are indeed several exemptions applicable to the IMI Tax in Portugal, it is highly recommended to seek advice from a tax professional or financial advisor. This is due to the dynamic and often complex nature of Portuguese tax legislation, which undergoes regular changes and adjustments. Expert guidance can ensure that you're up-to-date with the current laws and help you make the most informed financial decisions.
2. AIMI (Adicional ao Imposto Municipal sobre Imóveis): Wealth Tax
The AIMI was introduced in 2017 as an additional levy on residential properties and land for construction with a VPT (taxable property value) above a certain threshold.
How It's Applied: This tax is levied on the sum of the VPT of all residential properties and land with a building permit held by each taxpayer on January 1st of each year.
Target: This wealth tax pertains to those owning a portion of the property in Portugal that is worth more than €600,000. The rates are constant irrespective of whether the individual is a resident or not. If the property is company-owned, the applicable rate is 0.4%. However, if it is owned by an individual, the rate stands at 0.7%. When the property's value goes beyond €1 million, the rate escalates to 1%.
Provision: There is a provision for a €600,000 deduction per person on the total value of properties in Portugal. Thus, if a property in Portugal is co-owned by you and your partner, the Wealth Tax (AIMI) will be imposed once the property's value exceeds €1.2 million.
Resource: Consult page 17 of Sistema Fiscal Português to get to know the official AIMI tax rates to consider.
Conclusion
In conclusion, the Portuguese property tax landscape includes, among others, the IMI, an annual tax based on the property's taxable value, and the AIMI, a wealth tax imposed on more luxurious or valuable properties. While the IMI is an annual commitment for property owners and its payable amount can be influenced by factors such as the property’s location and type, the AIMI specifically targets owners of properties with higher taxable values. Tools like the Portal das Finanças are invaluable in helping determine precise tax obligations. However, given the dynamic nature of tax legislation in Portugal, it's imperative to consult with tax professionals or financial advisors, especially when seeking exemptions or making significant property decisions. By being informed and proactive, property owners can navigate these tax requirements efficiently and make the most of their investments in Portugal.
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