Was your IMI affected?
When you buy a house, you will need to know in advance what the fair price will be, so that you can then negotiate with the owner. The best way to know the fair value will be to probe the house values of the same area as yours. Only this way will you be able to calculate the right amount to be paid, evaluating the advantages and the disadvantages of the property in question. (learn how to negotiate the property value, here)
Once the deal has been carried out, do not forget all the monthly and annual expenses that involve the house purchase. The most common and familiar expense to all the property owners is the Municipal Property Tax (IMI). The calculation of the amount you will pay for IMI is quite simple to do. You must multiply the annual tax applied to your city, by VPT – Taxable Asset Value.
IMI = Tax x VPT
The municipal tax varies depending on the town you live, and it can also change over the years. This rate may range from 0.3% to 0.45%, with your municipality deciding how much. You can also take advantage of discounts according to the number of dependents in your household. (you can check here which is your municipal tax)
The public finances calculate the Taxable Asset Value which tends to be close to the initial house value. The tax valuation counts on several aspects such as house areas, the location, the characteristics, surrounding area and the age of the property.
This being the calculation you must make to know how much you pay annually for IMI, you realize that it is a variable amount. It is dependent on several aspects that sometimes, the owner can’t control. One of the coefficients from the VPT is the LC - Location Coefficient that evaluates the social facilities access, public transportation services, variety of ways whether they are maritime, road and/or rail, as well as the real estate market value in the property location.
In mid-2019, the news of the sale of the most expensive property ever traded in Portugal became public. It was a penthouse, in the centre of Lisbon with 250 sqm in Castilho street, near Parque Eduardo VII. The property was sold for 7,2 million euros and had three rooms, an infinity swimming pool, and a terrace. Not being a property for all wallets, it is understood that this type of business is only focused on a narrow ultra-premium market segment.
Could it be an isolated case? Considering that some VPT coefficients do not depend on you, but on the areas and prices practiced in the area, it is likely that the valuation of your property will be affected. In these cases, it can increase the IMI of your house when you decide to make a revaluation of your property.
Given that Porto, Lisbon and the Algarve region are the areas where the value per square meter remains the highest nationally, homes in these areas of the country could see their IMI values increase. A large part of sales to the premium segment, which influences the valuations of neighbouring homes, goes to the foreign population. They have a 75% stake in real estate purchases, which resulted in 2018 of 3.4 billion euros overall, amounting to 322,000 euros per property.