A.I.M.I. Additional Rates Tax

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A.I.M.I. or additional I.M.I. (rates)

At the end of December 2016 the Portuguese parliament as part of the yearly State budget related to 2017 approved a new law also known as: DL 42/2016 of 28-12-2016.

In future we will refer to this as A.I.M.I. which stands for “Adicional Imposto Municipal Imobiliário” a complementary tax to the I.M.I. (Rates).

In principal this new tax replaces an already existing tax called I.S. (Imposto de Selo or stump duty) which was levied already on properties with a V.T. (Rateable Value) above € 1.000.000, 00. This tax (for the rich) was 0,8%. In fact we hardly have any clients falling into this category. The main difference between this new tax and the previous one is that the taxation will focus on the owner (and the value of his assets) instead of the individual value of each property.

However this new law now will affect many more of our present clients and companies. To my opinion we can call this the first big step towards the (re)introduction of a wealth and inheritance tax which was abolished many years ago.

Instead of the threshold of € 1.000.000, 00 the bottom line is now € 600.000, 00. And it is not only about the V.T. value of one property but it will be the accumulated value of all properties owned by one tax payer (contribuinte). But it only applies to properties which are destined for habitation. It does not apply to commercial premises or projects.

So if somebody owns 3 properties for habitation with a total V.T. value of € 750.000, 00 this new ruling applies to him/her.

Who pays this tax:

  • Individual tax payers in case the total V.T. value of their assets is above € 600,000, 00. In that case you will pay an additional tax of 0,7% over the difference between € 600.000, 00 and € 1.000.000, 00. Is the total value above € 1.000.000, 00 then the additional tax levied will be 1,0%

  • Companies (and this includes also off-shore companies!) who are either owner of, either are usufructuaries of or have the right to use a property destined for habitation do not have any exemption! They will pay 0,4% over the total V.T. value up to € 600.000, 00, another 0,7% over the amount between € 600.000, 00 and € 1.000.000, 00 and finally 1,0% over the amount over € 1.000.000, 00.

  • Undivided inheritances are also included in this new ruling but as this hardly applies to any of our clients I will not get into detail about this particular situation.

  • Off-shore companies registered in black-listed jurisdictions will pay an additional 7,5% on top of the 7,5% they already pay with their I.M.I.!

When does one have to pay:

The invoices will be issued on June the 30th. of 2017 over 2017 and following years, so not in retrospect to the previous year like with I.M.I. and sent to the clients or their fiscal representative during the month of July (in fact I only received them in August). The respective payment has to be done before September 30th.

In order to understand the situation I will give an example.

Suppose you own properties with a V.T. value of € 750.000,00 and they are all located in the Lagos Municipality. You will pay:

I.M.I./Rates are 0,375% over € 750.000 = € 2.812,50
A.I.M.I. is      0,700% over € 150.000 = € 1.050,00
This makes a total of                    € 3.862,50

Suppose the same house was owned by a Maltezer company:

I.M.I. is         0,375% over € 750.000 = € 2.812,50
A.I.M.I. is       0,400% over € 600.000 = € 2.400,00
                  0,700% over € 150.000 = € 1.050,00
Making a total of                         € 6.262,50

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