Municipal Property Tax -“IMI”

 

 

IMI is due by the person or entity that owns a property located in Portugal on the last day of the tax year, ie 31st December. IMI is an annual tax, usually payable in two equal installments: April and September.

IMI is levied on the property taxable value assessed by the Portuguese Revenue as a result of the submission of a form known as “Modelo 1 – IMI” and various supporting documents of the property. IMI rates:

- Urban properties are taxed at a rate, established by the municipality where the property is located, between 0,2% and 0,5% on the property taxable value.
- Urban properties valued before 2003 are taxed at a rate between 0,4% and 0,8%.
- All rustic properties are taxed at 0,8%.

Urban and rustic properties owned by companies registered in black-listed jurisdictions are taxed at 1%.

The IMI bills will be sent to your Fiscal Representative, who will contact you and then discharge the taxes.

Inheritance Tax See Stamp Tax section Residents and Non-residents Non-resident individuals are generally those who spend less than 183 days during the calendar year in Portugal.

Non-residents are only taxed in relation to property located and income generated in Portuguese territory, including rents and capital gains. Whenever a foreign company, without a trading activity in Portugal, owns a property in Portuguese territory, it will be taxed according to the same rules of non-resident individuals.

Non-residents must designate a Portuguese tax resident to take care of their tax affairs with the Portuguese Revenue. This appointment is prior to the purchase of a property.

 

 

Stamp Tax, “Imposto de Selo”

Stamp Tax is charged on a variety of deeds, contracts and documents, such as:

- Acquisition of a property: 0,8% of the purchase price
- Donation of a property: 0,8% of the property taxable value
- Finance contracts: from 0,04% to 0,6% of the finance amount, depending on the term.

The acquisition of assets by inheritance is subject to Stamp Tax at a 10% rate. However, Portugal does not levy inheritance tax on property transmissions between spouses, descendants and ascendants.

Stamp Tax is due by the person or entity that has an economical interest in the deed or contract. Income Tax on Rental Income, “IRS or IRC” Any rental income arising from a property located in Portugal is subject to payment of:

- IRS (applicable to individuals)
- IRC (applicable to companies)

Whenever the rental income is superior to 10.000 euros and is paid by a Portuguese entity with organized accounts (instead of simplified accounts), a 15% tax will be withheld at source.

Assuming the rental income is not obtained within the scope of a professional activity (as a self-employed individual) or of a permanent establishment in Portugal (trading branch of a non-resident company), the income tax will generically be computed as follows:

The specific expenditure comprises: IMI tax, condominium charges, basic services, maintenance expenses and building insurance.
Taxpayers must file a tax return without being required to do so by the Portuguese Revenue. Consequently, your Fiscal Representative will prepare and file the consequent tax return, referring to the previous tax year.

 

 



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