New tax on rental properties?

[steveh]

We've heard the Portuguese govmnt are set to levy a 75 euro per month tax on all properties available for rent to tourists. Anyone know if this is true?

[EMM]

Do not know about this but we were told last year that if your rental income exceeds 10,000 euros year there was a move to apply IVA ( 23% ) to holiday rentals. ( Scource Sovereign ).

[blue]

I think there must be a government plot to end tourism in the Algarve what with the new taxes on restaurants/bars, golf & holiday rental, road tolls & ridiculous licences. They might as well just put a closed sign up.

[EMM]

IF these things are true I think that it is more about the vested interest in the Hotel and Construction market.

These very large Portuguese companies like Pestana have a lot of influence and obviously have never liked the " private " rental sector.
You also only need to look at the new " Touristica " developments where owners are not allowed or certainly discouraged from renting privately.

[e-richard]

You are absolutely right EMM.

The Self-Catering holiday (whether rented privately with owner or thru an agency) is one of the fastest growing sectors in the Travel industry. Arguably growing even faster than cruises.
Inevitably this threatens Hotels and the all-inclusive markets who have very powerful lobbies and have already succeeded in outlawing private rentals in odd places like the Canaries, New York City and Paris.

All it achieves really is sending the private rental business underground and effectively losing tax income.

[joeysoap]

We've heard the Portuguese govmnt are set to levy a 75 euro per month tax on all properties available for rent to tourists. Anyone know if this is true?

If it was a levy on all properties available for rent, who would decide what was available and when? I am sure that it's not that easy to rent out property in the Algarve on a 12 month basis so how many months will the impose the levy for? And even if you did rent out but kept the property for yourself for say Sept/Oct will they levy this too? Or is it a levy on actual rentals ie if you rent out for even 1 week in May you are levied? Read recently that Spain was going to increase the levy on property owners (In Spain the authorities have a tax whether you rent out or not, my understanding is that if you rent out they have a tax and if you don't rent out they have a 'deemed' income based on the value of the property and they impose a tax on this deemed income)

[cereza]

We've heard the Portuguese govmnt are set to levy a 75 euro per month tax on all properties available for rent to tourists. Anyone know if this is true?

Where exactly did you hear this ?

[biffa]

We've heard the Portuguese govmnt are set to levy a 75 euro per month tax on all properties available for rent to tourists. Anyone know if this is true?

We have no idea what this is about! There is a €75 "cap" on the IMI increases due to the revaluations coming up so perhaps it is some mistake surrounding that figure?

Do not know about this but we were told last year that if your rental income exceeds 10,000 euros year there was a move to apply IVA ( 23% ) to holiday rentals. ( Scource Sovereign )

Again we deny starting this rumour! However some resorts that are classified as under a special tourist scheme (prédio de utilidade turística) could well be subject to IVA on rental income.

Despite Wikipedia there is more "misinformation" out there than correct information!

[e-richard]

And as luck would have it, for today only, Wikipedia is closed.

Try it

[James Faro]

While I applaud Wikipedia for making a huge stance on censorship(several US lawmakers have new refused to back that bill going through congress) the blackout of its website was easily avoided! All you need to do is press the cached button on google, and full access to the page is given!

[joeysoap]

We've heard the Portuguese govmnt are set to levy a 75 euro per month tax on all properties available for rent to tourists. Anyone know if this is true?

We have no idea what this is about! There is a €75 "cap" on the IMI increases due to the revaluations coming up so perhaps it is some mistake surrounding that figure?

so all the 'old money' villas have a cap of €75 per annum increase on their revaluations? Nice.

[sam]

Those on old valuations are likely to see a big increase when revalued.Will the 75euro cap be per annum or per month? Obviously a big difference, and I suspect it will be the latter.

[biffa]

Sam: The cap is over the annual tax payable NOT monthly.

"Many properties that have been registered with the same title holder for many years including those held by companies could see a dramatic increase in the tax value. Fortunately there has been a “capping” limit written into the legislation whereby any increase in the IMI payable for the years 2012 and 2013 is limited to the greater of either €75 or 1/3rd of the difference between the IMI payable following the general valuation and that paid due for the year 2011. What happens after 2013 we wait to see!"

[e-richard]

Biffa,
Do I understand you correctly ?

..the IMI payable for the years 2012 and 2013 is limited to the greater of either €75 or 1/3rd of the difference between the IMI payable following the general valuation

€75 pa is not a CAP. For those who got a good deal in the last century when undervaluations were also rife, 1/3 of the difference could be higher than €75, and the IMI bill could therefore be increased by more than €75 pa ?

[biffa]

e-richard

Yes you are correct that in some circumstances concerning property that has not been revalued for many years the increase could be greater than the €75 limit.

The IMI payable for the years 2012 and 2013 is limited to the greater of either €75 or 1/3rd of the difference between the IMI payable following the 2012 general valuation and that paid due for the year 2011.

As an example - if the VPT (Valor Patrimonial Tributário) of an older house with an IMI rate set at 0,7% by the local Câmara is €60,000 in 2011 (= IMI of €420) and increases to €300,000 by the 2012 revaluation, the 2013 IMI payable would be 300,000 x 0,7% = €2,100 - €420 = €1,680 / 3 = €560 which is about a 60% increase over the 2012 payment. I trust this is correct but I am sure I will be told if it is not!

I think for most foreign owned properties in the www.carvoeiro.com catchment area the €75 cap will in fact operate.

We are not sure what happens in 2014 in respect of the year 2013. Perhaps all capping will be lost which could mean some very large increases!