The 2016 State Budget is a marvelous thing, rearing up with unerring regularity to hit struggling property owners in their wallets.
Another devious ploy cooked up by the Tax Authority and local councils for 2016 is that those properties that councils deem to be vacant could have to pay three times the amount of rates (IMI) than if the same property was ‘lived in.’
'Vacancy' will be determined by a property having no electricity or water supply contract, or, if there are contracts, vacancy will be based on what the local council alone deems to be ‘low consumption.’
Municipalities get sent the information on water, electricity and gas contracts each year by October 1st. They then can identify the victims and the data is sent on to the Tax Authority with a recommendation to increase IMI between 0% and 300%.
The process by which the utility companies inform the councils became automatic this year, a measure provided for in the detail of the State Budget so the ahpless property owner is left out in the cold with a big bill to pay and bureaucratic nonsense to wade though if the owner is to complain.
Low consumption’ is decided on by the council so mostly empty holiday homes, homes struggling to be rented out, homes being refurbished and homes with their own photovoltaic systems may be subject to the full 'x3' multiplier.
Owners have pointed out that councils are an 'interested party' as it clearly is in councils’ interests to declare low energy and water consumption so properties can be classed as ‘vacant’ to trigger high rates bills.
The law is the law and the budget is the budget, but however much they might proclaim their even-handedness, the councils are acting both as jury and executioner.
Comments
Portugal has shown it is incapable of operating its own finances , and with the Algarve it has salted the earth with this last imi increases. Now I know the IMI is cheap compared to the UK CT , but this reeks of taxing the foreign owners to me , and again with Brexit any UK owners will be hit hard - after leaving the EU there will be no argument to be heard in EU courts.... not that it matters as Lisboa ignores the rules of membership anyway.
Pre financial crisis Greece was a low cost tourist zone , it faltered , they put up prices , Turkey and North Africa took up the slack , Greece couldn't comprehend the reason why its income dropped off the charts , so put up prices again and again. Heed this Portugal , heed this Algarve Mayors , your future may well be a referendum too - to declare itself once more a kingdom of its own right , keeping its taxes local , keeping the decision making local - rather than to feather the nest of Lisboan politico millionaires and their families and friends instead.
See this news report:
http://www.jornaldenegocios.pt/multimedia/videos/detalhe/em_que_casos_podem_as_camaras_triplicar_o_imi.html
Possibly, but there may be a way of complaining of a property is fully or partially 'off grid'.
The Tax Authority also can see from the electricity and water usage data which properties are being rented out on short-term lets without AL licenses and check if the owner is declaring this rental income. It doesn't bother though....far easier just jacking up the rates bills.
Maybe there is an additional, more sinister motive. With the utility bill information the government can determine those houses that are owned by estrangeiros and are occupied for more than 6 months per year. They will then know who is and who should be paying their tax here under the 183 day residency rule.