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“IMI” due one month later in 2019

There are new deadlines for the payment of the Municipal Property Tax (“IMI”). Instead of running between April and October as before, tax settlement will take place between May and November in 2019. “IMI” is paid in one go or in several instalments, depending on whether taxation is less or greater than €100. May is the month for single assessments when the tax due is under €100; or for the first instalment, in cases where the amount owed is greater. Second payments are in August when “IMI” exceeds €500. Finally, November is for final payments when taxation falls between €100 – €500 or third instalments if the levy is greater than €500.

Renting rooms may imply losing “IMT” discount

The Tax Authority can now claw back “IMT” tax breaks when owners engage in Local Lodging or letting rooms to students. If you bought your home as your “personal and principal residence”, you paid a lower property transfer tax (“IMT”) at the time of purchase. According to a recent “AT” ruling, if within the following 6 years you practice holiday or student letting, Finanças can rescind the tax break and retroactively reclaim any additional tax due.

Tax Office to offer direct debit

The Tax Office (AT) is working on a system which will allow taxpayers to pay their taxes by direct debit with a simple payment order. This “Simplex” measure should be available by the end of 2017. The expectation is that the “IUC” road tax and the “IMI” property tax will be the most likely candidates for this method of payment. They are the basis  of many fines for delays due to taxpayer forgetfulness

New supplementary property tax (AIMI)

An added assessment, dubbed “Additional Municipal Property Tax” (AIMI), will cover the entire ratable value (VPT) with an exemption on the first €600,000. For properties above this evaluation, the rate of 0.3% will apply. Property Owners with outstanding taxes will forfeit this exemption and will have to pay the new levy whatever the VPT.

Moves on the tax front…

Apart from the increase in Tax on Local Lodging (from net 3,75% to net 8.75%) the State is planning indirect taxes and changes for 2017.

An added assessment, dubbed “Additional Municipal Property Tax (AIMI), will cover the entire ratable value (VPT) with an exemption on the first €600,000. For properties above this evaluation, the rate of 0.3% will apply. Property Owners with outstanding taxes will forfeit this exemption and will have to pay the new levy whatever the VPT.

On the other hand, owners of buildings with ratable values over one million euros should pay less overall tax in 2017 than last year, even with the proposed increase in Municipal Property Tax (IMI), due to the elimination of the 1% Stamp Duty on this type of luxury real estate.

Additional “IMI” assessment

Property Owners as well as the Tax Office may request an additional “IMI” (Municipal Property Tax) evaluation if there is disagreement over the original set values. However, any such challenge does not suspend the payment of the first evaluation.

Luxury properties to be taxed at a higher level

The Budget proposals for 2017 foresee that real estate owners with high-value properties (VPT of more than 500.000€) will face an additional tax next year.  The new levy will be progressive, to be accumulated with the regular IMI. It is hoped that the tax will provide an additional €100-€200 million to the state coffers.

City Halls can request IMI re-evaluations

The City Halls may now request IMI re-evaluations for tax purposes.  Until now, this procedure was only open to property owners.  IMI is a municipal tax collected by the AT (Tax Authorities), based on 0.3% – .45% of the rateable value of real property.

IMI changes

Solar exposure and the view are now being weighed more heavily in the determination of property values and the IMI (property rates). These two numbers now quadruple, going from 5% to 20%.  On the other hand, the same factors, when considered for the reduction of property value, are worth 10%, a doubling compared to the prior coefficient which was in force at 5%.

“IMI” Council Tax Rates for 2016

Council Tax Rates (IMI) in 2016 will remain the same in 259 of 308 municipalities, 84% of the total. 46 towns and cities (15%) will lower tax rate and only 1% will increase the levy. 136 townships (44%) will charge the minimum charge of 0.3%

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