In December 2003, new rules concerning municipal property tax (Imposto Municipal sobre Imóveis) came into force. A new code was also approved: the Código do Imposto Municipal Sobre Imóveis (CIMI).
Those new rules were created to assess the patrimonial value of urban properties closer to their real market value.
Therefore, almost all new properties completed or traded after December 1 2003 were already evaluated according to the 37th article and the following ones of CIMI.
Nevertheless, there are still many properties which were never submitted to a new evaluation and, therefore, their patrimonial value is very low.
So, because of the financial commitments entered into by Portugal with the International Monetary Fund and the EU, it has been decided that those properties not evaluated or traded after December 1 2003 would also be subject to an evaluation under the rules laid down by the CIMI.
The result of those evaluations made by the tax authorities will be considered when charging IMI referring to 2012 (payable in 2013) and will also have other important consequences regarding the municipal transfer tax (IMT), IRS and IRC.
The most important points for you to have in mind are:
First evaluation: unlike what happened before, the owners of “old” properties aren’t requested to present any declaration or documents to the tax authorities. The fiscal value will obtain all the relevant information and documentation directly from the Câmaras.
The taxable patrimonial value is achieved through a very complex formula, which includes, together with other criteria, the location of the property, its comfort, connections to public electricity supply or water supply networks, features such as swimming pool, garage, etc.
Once the first evaluation is completed, property owners will be notified by the tax authorities, who provide them with the possibility of asking for a second evaluation if they disagree with the value.
Second evaluation: if the tax payer disagrees with the patrimonial value determined, a deadline of 30 days is given to request a revision.
There is no need to justify the request by law and no fees will be due, unless the patrimonial value in the second evaluation is equal or higher than the first one. In this case, a minimum €204 fee is due.
This second evaluation is made by a commission: a regional expert named by the tax office’s director, who acts as the president of the commission, and a member appointed by the câmara and by the tax payer.
Whether higher or lower than the first evaluation, the value resulting from the second evaluation is the final one.
It is also important to mention that the second evaluation can be requested if the patrimonial value does not reflect the market value of the property. This could be the case if the patrimonial value is 15% higher or lower than the market value.
A minimum €765 fee is charged if the second evaluation is based on this situation.
Revaluation: up to three years of a patrimonial value being established, it is still possible to request a direct revaluation through the special proceeding laid down in the 130th article of CIMI – claim against the tax registry (reclamação da inscrição matricial).
That request can be based on several reasons. For example, because of changes introduced to the reference criteria, in the last few years, through which the patrimonial value is achieve.
However, you must think carefully before requesting a revaluation. Some of the changes mentioned in this article benefit the tax payer but others favour the Portuguese State.
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