The CIMI property tax rates have been published and despite the lack of local government funds and the crisis hitting all the local councils, the good news for most property owners is that many of the local tax departments have opted to retain their tax rates used for the IMI calculations at the same rate as for 2011. Some have even lowered them as is the case for Alcoutim, Lagoa, Silves and Vila do Bispo.
Whilst the highest tax rate for properties already under the CIMI code is 0.5%, only Albufeira, Olhão, Portimão and Vila Real de Santo Antonio have increased their rates to that maximum.
However this is not good news if your property tax value is 1 million euros or more. You will be paying hefty increases in your taxes.
As per the law published on the 29th October 2012 , tax departments have already issued the additional stamp duty bills for properties whose tax values are over 1 million euros. These demands must be settled by the 20th December or interest and penalties will be added by the tax department.
Sovereign have been in contact with both local tax departments and the central tax office in Lisbon to ascertain whether we could appeal against these invoices but further investigation into the law has indicated that the tax value taken into consideration in the calculation of the stamp duty is in fact the 31st December 2011. Therefore despite some of our clients’ tax values having decreased as a result of our recent revaluation requests, the tax value upon which they have to pay 0.5% is in fact the old tax value of 2011. A “retrospective” tax?
Next year properties whose tax value remains in the plus 1 million euros bracket will continue to be charged under this new tax and an additional stamp duty bill at the tax rate of 1% of the tax value will be issued along with the usual IMI bills. It is therefore advisable that any requests to revalue the properties are submitted promptly during 2012 to be in with a chance of avoiding this penalizing new tax in 2013. Sovereign can assist with these requests and have already saved their clients thousands of euros in their CIMI bills for 2012.
For example a property in Almancil with a tax value of 1 million euros will have to pay 4,000 euros in IMI property taxes and 10,000 euros additional stamp duty. How can this be right? It is a clear case of discrimination against individuals who have inherited or worked hard to have a nice house in Portugal and this will undoubtedly affect the property market and put off potential purchasers.
Sovereign are taking legal advice for an opinion as to whether this is unconstitutional!
Sovereign - Consultoria Lda
Parque Empresarial Algarve