Property tax in Portugal
Higher tax for privileged properties ?
Tuesday, 23 August 2016 | Taxation
Since August 1st, 2016 the property tax (Imposto Municipal sobre Imóveis, IMI) for properties in privileged locations (e.g. exposure to the sun, nice view) can increase. The weighting factor of quality & comfort included in the formula to calculate the taxable value has been raised from 5% to up to 20%, resulting in potentially higher annual taxes for certain quality properties.
The recalculation of the property value is not taking place automatically. Tax authorities - and nowadays municipal administrations - can initiate the re-evaluation if they have reasons to believe that the taxable value differs significantly from the fair market value of a property. Property owners are only obliged to start the process in case of construction modifications.
In the past Portuguese tax offices have not been very proactive in this area. However it may well be that municipal administrations take the initiative, because the tax goes to their pockets.