Property valuations

[biffa]

The new tax valuations on property have started to come through. Quite a mixed bag really but generally less than expected.

A 3 bed villa with pool on plot of about 1,200 sq. mts on outskirts of Cvo came in at 319,000 euros. Market value probably about 500,000 in this case. Still gives a fairly hefty annual IMI though at 0.5% when you consider what you get for it.

[digger]

……but isn’t one exempt from paying for the first X number of years??
How does that work, then biffa?? (or have I got it wrong)

[tax freak]

Is the .5% the same for private and company owned properties alike? Which tax year does this start from ?

[biffa]

The rate payable on "revalued" properties, i.e properties that have been revalued under the new sytem and not just the upgraded valuse will be betwwen 0,2% and 0,5%. the way things are it seems most councils wil charge either 0,4% or 0,5%. This will be paid by any individual owned property or a property owned by a company as long as the company is not on the Finance Ministry "blacklist".

On acquisition of property you can apply for a rate exemption for a perod of up to a maximum of 6 years in respect of a property with a tax value of up to 150,000 euros or 3 years from 150,000 to 225,000 and nothing above that. this however is for residents with permanent habitaion only and with new valuations this will not be as useful to as many as before. There is a time limit on applying for this and also a few anomolies with this tax benefit and you should speak to your lawyer about it at the time of acquisition

I should emphasise that there is a "capping" clause in the law so that any increase in IMI payable is limited to set increases for 5 years from 2004. However beware - this only applies if you are already occupying a property and suffer an increase in tax payable due to the revaluaton.

easy innit?

[Tax Freak]

Great thanks Biff. More or less what I had figured, but had forgotten about the capping element.

Tks

Good luck with the qualifying for the paly offs. We could do with another London club in the premiership especially as it looks as if Palace will drop out this year

[biffa]

You may be interested to know that we have just seen a new valuation of Euros 1,896,070! Large house on Quinta do Lago.

Gives an IMI payable of Euros 9,480.35 if they charge 0,5% which I expect Loule Financas will.

[Guest]

Can somebody advise roughly how they calculate....and If its Rural as mine is (Rustic) is it still 0.5%......??

[biffa]

There is a fixed annual rate of 0,8% of the Valor Tributavel in respect of rustic property.

Mixed property (part rustic/part urban) will be charged on each part separately at the appropriate rate.

If your land is rustic I presume you have no house on it?

[Guest]

No...Im building a house where the old ruin was...so I assume they will value it at habitation license time ??...but 0.8%.....this is becoming .not fun !!!

[Guest]

So it seems to pay rates in UK is much cheaper than here........no wonder the property market here has really slowed.......Dont the government understand that people vote with their feet...??

[biffa]

By the way rustic property is not subject to the revaluation under the new scheme.

I don't think rates here are higher than in the UK are they? A 3 bed villa with pool near Carvoeiro was recently valued at 319,000 so will pay a max of 1,595 euros (not taking any capping into account). Is that dear??

[Jaylay]

Will each property owner be advised of the new valuation of their property or will we only know what it is when the next rates bill comes in ?

[biffa]

Jaylay

You will receive a notification of the valuation which also shows how it has been calculated.

[steve]

The figure quoted by Biffa is lower than the sort of figure that would be paid in UK council tax. In 2001 I was paying £1750 a year council tax for a 4 bedroom, 2 bathroom house near Chelmsford.

I am expecting to pay about €2000 on the new house that I am building near the old windmills and while this is expensive compared with my current property which costs me €450 a year it is still cheaper than a comparable property in England.

The overall cost of living comparison is however more complex because medical bills including drugs are more expensive here as are utility charges. I suspect that there is now not very much difference overall but for me there is no doubt that the quality of life here is superior

[Jaylay]

Thanks biffa