When buying a house, am I exempt from IMT?
Have you gone through the process of buying a house and don’t know if you are exempt from paying IMT - municipal tax on real estate transfer? Or you want to know how much of this tax you will pay before you deed the property?
To be well informed, we have gathered all the important aspects of this subject, in this article.
Know beforehand that the old SISA, now IMT, is a municipal tax on onerous transfers of property. This value is applied to the Tax Asset Value (VPT) or at the present value of house deed and must always be paid when there’s a change of owner of the house.
There are situations in which the new owner of a house is exempt from paying the IMT. The municipal tax effects on the highest value, between the VPT or the present value in the deed.
What are the IMT exemption cases?
- Properties whose value does not exceed 92,407€ in mainland Portugal and 115,508€ in the islands, whose purpose is for permanent housing.
- Real estate investment funds exclusively to rent permanent housing. This exemption applies only to the government in general, autonomous regions, local authorities, associations and federations of municipalities governed by public law, and public institutes which do not have a business character. This parameter also applies to foreign States buying real estate on national territory for diplomatic missions, consuls' residences, etc.
- Buildings with national interest, that is, public or municipal buildings are also exempt from IMT.
- Acquired buildings for rehabilitation interventions are also exempt from this tax. For the new owner to get this exempt condition, he should start the rehabilitation work within 3 years after the acquisition.
- Properties for resale, are exempt. For this to happen, the owner will have to guarantee, with the submission of the proper documentation from the finances, that he has been carrying out this activity for at least one year.
- Where there is cooperation and restructuring within firms, a member from the finance sector from the government could give the exemption to companies who ask for it.
- Properties acquired by credit institutions due to defaults, enforcement proceedings, bankruptcy/insolvency or in default annuity are exempt from the IMT.
- Rustic building acquisition covered by the ZIF – Forest Intervention Area, are also included on the IMT exemption.
As already referred here, the properties until 92.407€ are exempt from the municipal tax on real estate transfer. From this value, percentages begin to be tabulated, which vary depending on the value of the property.
If you want to know in advance how much you will pay for your permanent house or a second-home house, find several simulators online. We share with you the Deco Pro Teste simulator, fill in the details, and you'll know right away the value you will have to pay before the deed.