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IMI, IMT, AIMI, Seal. If you are going to buy a house, know what taxes you will have to pay – Economy – SAPO.pt

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Last year, only with the additional tax for IMI – AIMI, also known as the mortgage tax, created by the António Costa government in 2021 and which burdens those with one or more homes whose total asset value exceeds 600 thousand euros – the state coffers collected 145 million euros.

The municipal property tax (IMI), which is paid by the owners annually and goes to the municipal councils in which the house is located, has generated a total of more than 1.5 billion euros. To the revenues for implementing the budget for 2023, in this group of taxes, there is also 1.7 billion paid by the Portuguese in municipal tax on onerous property transfers (IMT, due when purchasing a house).

Finally, the stamp tax gave the state another two billion euros. All of these are taxes paid on property and out of your pocket, added to the amounts you owe whenever you buy or consume any good or service.

This group (which also includes VAT, ISP, IUC, etc.) is called indirect taxes. In their wake, the Portuguese handed over to the state, in 2023, nearly 32 billion euros (more than the 29 billion that the government had estimated it would receive). And in indirect taxes (IRS and IRC), they paid 58.8 billion in one year.

But ultimately, what taxes will I have to pay if I decide to buy a home? There are many of them, as explained by SAPO Bruna Melo, EY Tax Services Partner.

When should IMT be paid?

The IMT applies to all real estate transactions located in Portuguese territory that are onerous in nature, i.e. that require consideration. This tax does not include, for example, real estate donations. It is the most important tax imposed, for example, on the purchase of a house. The IMT fee must be paid by the buyer at the moment of writing.

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The IMT is charged on the tax asset value (VPT) of the home or on the price agreed between the parties for purchase and sale, whichever is higher (generally, the VPT of a home is less than its market value, although it may be). There are exceptions.) In the case of residential property, IMT rates are progressive and follow the deemed value for the purposes of this tax. There are also different rates, which apply depending on whether the property is intended for the buyer's permanent residence or not.

However, the basic IMT value of homes up to €101,917 is exempt from this tax. According to a proposed law recently introduced by the new government, exemption from IMT tax (and stamp duty) may apply to the purchase of a first home for young people up to the age of 35, in relation to properties with a base value to IMT of up to €316,772. In cases where the value of basic IMT is higher, this exemption may only be partial.

What is the stamp duty?

When you buy a house, you also have to pay this tax (IS), which corresponds to a rate of 0.8% of the deemed IMT value, in other words, to what you owe in IMT, you have to add another 0.8% of that value). The exemption for purchasing a first home for young people up to the age of 35 is subject to parliamentary discussion, according to the same conditions mentioned above for the International Marxist Tendency.

It is important to note that IS may also apply if the home purchase is financed by a financial institution – if the home purchase involves a mortgage loan, IS applies to the amount of the amount requested from the bank, at 0.6% (if the credit has a maturity 5 years or more), in addition to commissions charged by the bank at rates of 3% or 4%.

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When the house is mine, do I always have to pay IMI?

After purchasing the home, you also have to rely on the IMI due by the property owner on December 31 of every year. Like the IMT, the IMI is a municipal revenue tax, with its rates set each year by local authorities, within the limits established by law. For most buildings, IMI rates range between 0.3% and 0.45%.

This tax is imposed on the value of the property and can be paid in three installments in the year following the year to which it relates, depending on the amount of tax due:

  • A tax of up to €100 must be paid in one lump sum in May;
  • More than €100 and less than €500: You can pay in two installments, in May and November;
  • More than €500: in three installments, due in May, August and November.

IMI exemptions may apply to low VPT properties used for permanent residence by the owner or tenant, for households with low gross annual income.

How do I know if I should pay additional IMI (AIMI)?

AIMI is paid by the relevant owner on January 1 of each year, when a person's property is at stake, the value of which exceeds 600 thousand euros. This tax is levied on the total VPT of properties owned by the same owner. As regards natural persons, it is only due when this amount exceeds €600,000 and when they are a married couple (AIMI joint tax) the maximum AIMI payment increases to €1,200,000.

The AIMI rate ranges between 0.7% and 1.5% and the tax must be paid in September of the year in question. This amount is added to the IMI that you have to pay as well.

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What is the value of tax assets?

It is important to note that the VPT, which is the basis for calculating the above taxes, is determined according to a formula established by law, which takes into account a set of characteristics of the property, such as areas, location, allocation, “age” or quality and comfort characteristics.

Note: This text does not constitute tax advice and is intended only to provide some general rules.

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