IMT is a Municipal Tax that is levied on the right of property implicit in paid real estate transactions. The buyer pays this tax before the deed of sale is signed. The amount to be paid depends on the value of the transaction and the percentage applicable to different price bands. The price bands are updated annually in the State Budget.
Local Authority Rates
Local authority rates ("IMI") is a municipal tax levied on the patrimonial value of the buildings located in the territory of each municipality. This tax is divided into rural and urban types, in accordance with building classification. The applicable rate is defined annually by each municipality in a decision taken by the respective municipal assembly. Payment is made at the Tax Offices of the Treasury Department.
Exempt from payment 2007
Houses destined to be used as the purchaser's permanent home and those destined for rental may benefit from exemption from this tax for periods ranging between 3 and 6 years depending on the patrimonial value of the building in question.
Rateable Value (Corresponds to the patrimonial value - registered in the building records in the Tax Office)
Exemption Period (Years) Permanent Home Rental for Housing
Up to €157.500
6
From €157.500 to €236.250
3
Over €236.250
0
Offshores
0
Annual percentage rates
%
Rural buildings
0,8%
Urban buildings
0,4 to 0.8%
Urban buildings valuated in accordance to IMI rules: 0.2 to 0.5%.
Offshores
1 to 2%
1 - Depends on the municipalities in which the buildings are located.
2 - In Albufeira Municipality the rate has been fixed at 0.8%
NOTE:
Exemption must be requested at the respective section of the tax office in the 90 days before the end of the period of six months for establishing permanent residence.
The present exemption is not applicable if the taxpayer is resident in a country with a more favourable tax regime, except if the annual rental value is greater than or equal to 1/15 of the patrimonial value of the rented building.
