campos

I read that one can get a three year IMI exemption from payment if one buys for less than eu125K in an urban area and lives there. Can others confirm this?

dingg

Yes, I was surprised that we never received any imi bill and discovered we were exempt for 3 years 😊

Red Eric

Yes, it's true.

However, the 125k is the VPT (Valor Patrimonial Tributário) above which the exemption can't be claimed, as opposed to the purchase price. VPT is the value used for calculating IMI and is very often a good deal less than the purchase price. Nor does it have to be in an urban area - anywhere will do as long as it's your primary residence, although there's also a household income bar of 153k to gaining the exemption.

campos

All good news fellas. Thank you. And for the additional info Red Eric!

wellinever

Built my house small and compact (council uses € 600/m2 as build cost) one floor..
Received first PVT as a house last month......valued at €119,000.
So now, as a resident, requesting exemption from IMI which I guess would have been around €600a year.
Although you can also apply for 25% reduction for having Solar water heating.
But not sure if that comes off the PVT or the IMI calculation, will find out today.
But if IMI then at least would save after the 3 year exemption.

Rambling archer

It seems the bit about "urban" does not mean it has to be in a town, but that it has to be on urban-designated land - rather than rustic - which should show up on your paperwork - for instance ours shows a certain square-meterage of urban land - the half where the building is - and a square meterage of rustic land where the olive grove/orchard is. Smaller plots will just be urban - with permit for dwelling construction, access to water, electric, sewerage where feasible.

Fluffyhead

wellinever - I've never heard of getting a 25% reduction for having solar water heating. We've had solar water heating for about 8 years now so so I'd be very interested to hear what you find out.

campos

Good to know. Thank you.

Red Eric

As far as I know, this type of IMI exemption is automatically applied these days, unlike back in the day when it had to be claimed.

No harm in asking about that though, just to be on the safe side.

ouriquejan

When we first moved over, we had to apply at Finances for a 5 year exemption.

However, when we moved, as it is our main residence, we were given a 3 year exemption.

We still haven't paid anything, not even the 39€ for the year, as we're very rural and have been told that as we have our own fossa, electric etc and do not use any of the services provided, at the moment, we do not pay.

That could change, but for the moment - nada.

RUFUS HOUND

Hi all, hope you dont mind me asking but how is the IMI (Portugal's version of council tax) worked out if not on the sale price - does somebody from the local council come and asses its value?

wellinever

Its just what I have read so far....but it did state that it is the local council that decides if and how much they might give.
Am talking with accountant today and will ask the question as to if he knows if (A) My council does give any discount and
(B) If any deduction is from the PVT or annual IMI.
With me because the house is newly built (ie HL received in November 2020) I had to announce the house to the Financas by way of the Modelo 1 form.(change from urban plot to a finished house) You give the original approved plans, the original Hab Licence, so they have all of the necessary info to calculate the PVT)
And that is the information you provide to determine the PVT (rateable value), here it asks if you have swimming pool, solar water heating, and a host of other items. So in effect they already know the house has solar cause I told them (and its obligatory) on all new builds.
But I think you can write a new Modelo 1 at any time, as in deed anyone should if they have added, for example a private swimming pool,. The PVT would then be increased accordingly, so I am guessing that if your council does offer any deduction, with some proof of installation (to make sure you paid IVA) and its there, then you could apply using the Modelo 1, found on your Portal das Financas. (use chrome so it auto translates)

Red Eric

Yes, more or less.

There are various factors taken into account - construction cost per m2, built area, rest of plot size, coefficients for use, location, quality & comfort, and age - which go into deciding the VPT (the taxable value), which is then multiplied by a rate of between 0.3% and 0.45% which is set by your municipal authority to arrive at the annual IMI amount.

wellinever

IMI (annual tax) is based on the PVT (rateable value) so much like the UK.
There is a disconnect between market values and PVT, again like the UK.
Read here:
https://www.eurofinesco.com/en/our-p...july-2015/file

wellinever

Currently my own Financas puts a cost of construction of €600/m2 !!!
When in reality you cannot get a licenced builder today, where I am, for less than €1000m/2
Hence the PVT will always be lower than the actual cost of construction. Added to that plots of land also have a PVT, on which IMI is paid, and again the value of the land on the open market could be vary different from PVT.
So you end up with a new property where the actual cost of the finished house is double the PVT put on it.
This also has a possible problem when you come to sell, as far as Tax is concerned. Where (with a new house) you can either use the PVT or the actual invoiced costs of the house construction, as the cost, whichever is the higher. (stops people from paying builders in cash without receipts)