backdated property tax bill - HELP!!

strong · Post by **strong** » Tue May 09, 2006 9:55 pm

I've received a DEMAND for back property tax from the solicitor for years 2004 & 2005. Having bought a small apartment in CVO town late 2005, the amount they say I have to pay following revaluation is a further 660 euros. Has anyone else been affected? We had no idea the property was subject to a revaluation and this has come completely out of the blue. Is this normal? Could it happen again? Any information would be greatly appreciated.
Pat

Guest · Post by **Guest** » Tue May 09, 2006 10:58 pm

Don't know about in Carvoeiro but theyre thinking of doing this in UK because of the rise in property value over past 2 years,though its been shelved for time being.
2 certainties in life,death and taxes.No escape:twisted:
ellie

pat strong · Post by **pat strong** » Tue May 09, 2006 11:27 pm

Not heard about UK situation either, but I don't think they'd get away with backdating without warning here in UK. By the way I meant 2004 not 2005, I think it's outrageous.
Pat

tbbr · Post by **tbbr** » Wed May 10, 2006 8:02 am

Re valuation in the Algarve appears to be a common event now, friends recently on buying a new villa found that they had to pay a significant increase on the rates due on their existing property before they could complete the sale.
Its no different than what happens here in the UK with rises in council tax and re banding.

Perhaps our " Sovereign " scources could add more information.

biffa · Post by **biffa** » Wed May 10, 2006 8:57 am

Hi Pat

Without benefit of seeing the paperwork the problem arises because when you bought in 2005 that triggered a revaluation under the new valuation scheme. The new valuation is higher than the old and although you will now pay a maximum of 0,5% on the value it has obviously left some back tax to pay.
If your lawyer had been canny he/she would have foreseen this, estimated what the new value would be and retained some funds from the previous owner at least to pay 2004. If you bought during 2005 then you are liable for the IMI for that year anyway. Whoever owns a property on 31 December is liable for the IMI in that year - payable the next.
Best to pay it before end of this month to avoid interest and if you know the previous owners politely ask them to at least pay their portion for 2004.

Summer · Post by **Summer** » Wed May 10, 2006 10:16 am

Can I just ask a quick Q? This property tax, is that the same tax that you are exempt from paying for 7 years if it is your first property purchase in Portugal? Or have I got that completely wrapped around my neck??

biffa · Post by **biffa** » Wed May 10, 2006 10:30 am

Summer - correct but exemption is for a maximum of 6 years and there are several provisos/exclusions. I'll look it up and be more precise if you like

martin · Post by **martin** » Wed May 10, 2006 10:37 am

similar thread on the property section

biffa · Post by **biffa** » Wed May 10, 2006 2:35 pm

Exemption 6 years for properties with a VT (tax value) of up to 150,000. Only 3 years exemption for properties between 150k and 225k. Over 225k - nothing!

This exemption can only be exercised TWICE by the same taxpayer or his family.

confused · Post by **confused** » Wed May 10, 2006 5:34 pm

I too have received tax demands and to be honest have just paid them when requested by my lawyer as she is our fiscal rep. Paid 1 in jan for I think was 2004 and another in april for 2005.(full info at house in portugal but think this was correct info)
This was my first property purchase in portugal 2004 and was a new build property so no tax carried forward from any other owner.
does this exemtion of 3 years mean I shouldn't have paid anything ?

Is there anywhere I can check up on this or get further advice

Thanks

Summer · Post by **Summer** » Wed May 10, 2006 11:33 pm

Thanks Biffa. I think ours comes into the under 150,000 tax value. Its probably worth a lot more than that now as we've had work done, most of it very recently, but I guess the tax value is still low (well I hope!)

S

kteee · Post by **kteee** » Thu May 11, 2006 8:11 am

I think you'll find the exemption is for residents only

Guest · Post by **Guest** » Thu May 11, 2006 4:01 pm

Yes this is intended for tax residents only.

It clearly states it is in respect of "property that is intended for permanent habitation by the taxpayer or his family". You can try as a non resident but it would normally be refused. I think it was aimed as a benefit to assist first time buyers and encourge home ownership.

Summer · Post by **Summer** » Thu May 11, 2006 4:26 pm

Oh yes, I can see where they are coming from with that. We do get the exemption, as we are residents, but I was hoping that we wouldn't suddenly be asked to pay it back if the valuation of our house was increased suddenly!

pat strong · Post by **pat strong** » Tue Jun 06, 2006 12:26 am

I appreciate all for the replies and contributions. It was a fairly small amount so we have just paid it - I was just worried that it could happen again.
I do think the lawyer could have warned us about this, but too late now.
Thanks to all.
Pat

backdated property tax bill - HELP!!

backdated property tax bill - HELP!!

IMI

IMI

IMI

IMI Exemption