The bill for the payment of IMI property tax in Portugal will start arriving at the homes of residents in Portugal as early as April.
First things first, what is IMI property tax in Portugal? IMI is a Municipal Property Tax which is updated and must be paid annually by the owners of properties or land in Portugal. In technical terms, IMI is levied on the Taxable Asset Value (VPT), i.e. the assessed value of the property registered with the Tax Authority (AT). Consult our guide with everything you need to know about paying IMI in Portugal in 2021, since the bill for the payment of this tax should start arriving at Portuguese homes as early as April.
How to calculate the IMI of your property
IMI is calculated by multiplying the value that the Finance Department attributes to the property, according to article 38 of the IMI Code, by the IMI rate of the municipality where the property is located, according to the following formula
- IMI to be paid = VPT x Municipality Tax Rate
It should be recalled that IMI rates in Portugal are established annually by the municipalities of the area where the property is located and communicated to the Portuguese Tax Agency until 31st December of each year, for application in the collection of the tax in the following year. Currently, IMI tax rates fall within the following range, under the terms of article 112 of the IMI Code:
- Between 0.3% and 0.45% for urban buildings - this rate may, in the specific circumstances of paragraph 18 of that article, go up to 0.5%;
- Up to 0,8% for rural properties.
To find out the value of the rates in each municipality, taxpayers can consult the data already published on Portugal's Portal das Finanças.
IMI payment deadlines
IMI is paid annually, all at once or in instalments. The payment deadlines in force for the tax corresponding to the year 2020 are the following:
- Up to 100 euros: single instalment, paid in May;
- More than 100 euros and less than 500 euros: 2 instalments in the months of May and November;
- 500 euros and over: 3 instalments, paid in May, August and November.
Payment in instalments is not compulsory. If you prefer, you may pay the tax in one lump sum.
Where and how to pay IMI tax
There are several ways to pay the tax:
There are several ways to pay this tax. You can do it at a tax office (in person or online), at a CTT office (the post office), an ATM or a financial institution that has a protocol with the Portuguese tax authorities.
This payment can be made by cash, cheque, direct debit or bank transfer. Given the current pandemic scenario, it is advised that you to do it from your home via online banking if possible, especially due to the COVID-19 pandemic.
IMI Exemptions in 2021
It is possible to benefit from an IMI exemption in the following situations:
- Permanent IMI exemption: intended for low-income households (up to 15,295 euros annually), whose property is only intended for permanent dwelling purposes, and the value does not exceed 66,500 euros;
- Temporary IMI exemption: valid for 3 years, destined for those who do not have an income over 153,300 euros pero year and who acquire a property with an administrative value up to 125,000 euros.
- Properties intended for renovation are also entitled to IMI exemption, for 3 to 5 years, according to article 45 of the Tax Benefits Statute.
And 2021 also brings another novelty in this regard. The beneficiaries of undivided estates who have a property of the estate as their own and permanent home will now be able to have the IMI exemption granted to people on low incomes. For this exemption to be granted, it is necessary that the heirs are identified in the land register and that they meet the requirements for this exemption to apply.
Until now, the granting of this exemption depended on the beneficiary being the owner of the property that serves as his own and permanent residence, a situation that the State Budget for 2021 in Portugal has extended to beneficiaries of heirs who live in a house of undivided inheritance, i.e. inheritance in which no partition has yet been made.