Real Estate Taxes Reach an all-time Record
Due to the number of real estate sales and the amounts exchanging hands, municipalities are receiving record revenues generated by property taxes.
The municipal Purchase Tax on real estate transactions (IMT*1) and Property Rates Tax (IMI*2) generated 2.4 million euros last year for the state coffers.
According to statistics released by the Customs Tax Authority (TA) IMT revenue has doubled within the last five years, mainly due to the number of transactions in the real estate sector (152 thousand properties were sold in 2017, in Portugal), but also due to the value of the properties on which the fees are levied.
Here is a practical example of a couple buying a permanent home that costs €170,000, in Lagos. According to the free APEMIP simulator the couple would pay 3,783.78 € of IMT. The calculation of IMI has several variants, but in broader terms, this couple may pay an annual amount of 680€.
With this explanation, we realise how the values of these taxes apply to just one property. Thus, it is justifiable that the State profited so much, thanks to the real estate boom.
*1IMT = (Property Value or Taxable Equity Value * x Applicable Rate) - amount to be deducted
*2 IMI = Tax Asset Value (VPT) x Applicable rate