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The sector warns that the review of the tax value of homes will lead to an increase in IMI on new construction

The sector warns that the review of the tax value of homes will lead to an increase in IMI on new construction

The President of AICCOPN is of the view that the review of site transactions for IMI purposes will have a direct impact on increasing property taxes. This position contradicts the guarantee given by the Minister of Finance, Fernando Medina, that there will be no increases in IMI.

The new tax value of homes will result in increased municipal property tax (IMI) on new dwellings and value of asset tax (VPT) update requests. This perspective was predicted by the President of the Association of Civil Construction and Public Works Industries (AICCOPN), Manuel Reyes Campos, to Jornal Económico (JE).

The President of AICCOPN says that when this revision of the location factor is approved, an element used to calculate the VPT for real estate that serves as the basis for the IMI, “it will naturally have a direct impact on the increase in real estate taxes, namely on new housing and requests for updating the value of tax assets.”

This position contradicts the guarantee given by Finance Minister Fernando Medina that this tax would not be increased. As for JE, an official source from the Ministry of Finance points out that “when new areas are approved – which will never have any effect in 2024 – the revisions are not directly and immediately reflected in the IMI payable, and are only applied in cases where A new evaluation of the property (i.e. at the owner’s request).”

The work falls into the hands of the National Commission for the Assessment of Urban Buildings (CNAPU), which is chaired by the Director General of the Tax and Customs Authority and composed of representatives of the National Association of Municipalities, tenants’ associations, owners’ associations and investors. Builders associations, real estate brokerage companies and also a representative of valuers. In 2019, a proposal to review site transactions was finalized and submitted for consideration by the government, with several elements represented in this committee saying at that time that for several areas of municipalities located on the coast, an increase in site transactions was proposed, especially those Which were in the average values. But this review did not go ahead in 2020 with the pandemic.

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“They now have work to do in this area in terms of redesigning the zoning, but also in terms of looking at the average building value,” noted the Secretary of State for Finance (SEAF), in an interview with Jornal de Negocios, on October 23. . “The work that CNAPU will launch soon,” he added. Nuno Felix justifies the review of the location factor by the need to correct the “VPT imbalance of real estate”, in order to reflect market appreciation, after the last revision that took place in 2015.

It should be remembered that the review of the laboratories has already received criticism from the president of the Association of Lisbon Owners (ALP), Luis Menezes Leitao, who warned JE that this decision would lead to a “brutal” increase in IMI. “The desire to increase the tax value of real estate will only increase their prices when the intention is to reduce house prices,” he said.

According to Menezes Leitao, the significant impact he expects on IMI, through the review of the site factor, is due to the greater weight of this factor (ranging between 0.4 and 3.5) in the VPT formula that takes into account the calculation of other variables such as the average construction cost per meter Square; Total building area allocation factor (ranging from 0.35 to 1.20); Quality and comfort factor (0.5 and 1.7) and age factor (ranging from 0.4 to 1). It also highlights that it relies on SEAF data in relation to the objective of reflecting the property market estimate in the VPT.

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“No increase in IMI is expected in OE2024”

Last Thursday, a discussion began in the House of Representatives on the proposed state general budget for 2024 (OE2024). In the Budget and Finance Committee, Finance Minister Fernando Medina assured deputies that “there will be no tax increases, neither for this year nor in subsequent years.”

“I can guarantee you that it will not increase,” said Fernando Medina, in response to Chiga’s deputy, Andre Ventura, accusing the opposition of “wanting to change the outcome of the technical work that is being developed in connection with the work of IMI and to return its elements” in a “political decision of the government,” This is the explanation he described as a “paradigm shift.”

As such, “no increase in IMI is expected in OE2024 and no future increase can be identified,” he said, highlighting that a zoning review for IMI purposes, which should have been conducted in 2020, has not yet taken place, leading to To not modify the value of the tax assets of many properties.