|Home| Info| Community| Business| Beaches| What to do?| Rentals| News| Forum| Blogs| Finance| History| FAQ| Contact|
IMI
Tax department revaluations
It is now becoming clear that existing properties will be revalued simply using a factor multiplied by the existing ratebale value (the V.T. or V.P.). The factor depends on the year the property was first registered with the tax department. This is how they will be able to re value the 6.5 million properties in Portugal.
I cannot get my hands on the list of factors but one lawyer who told me she had seen the list thought 1911 was factor 35?!
Thus for example, and don't take this as a real situation, if your property was first registered at the Finanças in 1980 they will simply multiply the value by the factor for that year say 8 or 10 to arrive at new value. 1990 might be 5 and 2000 erhaps 1.2 or something.
Existing properties will only get revalued under the new valuation formula when they are transferred. I do know of a villa in Qta do Lago being valued last month with a tax value of €uros575,000! Presumably the factor for that will be 1!!
I cannot get my hands on the list of factors but one lawyer who told me she had seen the list thought 1911 was factor 35?!
Thus for example, and don't take this as a real situation, if your property was first registered at the Finanças in 1980 they will simply multiply the value by the factor for that year say 8 or 10 to arrive at new value. 1990 might be 5 and 2000 erhaps 1.2 or something.
Existing properties will only get revalued under the new valuation formula when they are transferred. I do know of a villa in Qta do Lago being valued last month with a tax value of €uros575,000! Presumably the factor for that will be 1!!
Tax department revaluations
It is now becoming clear that existing properties will be revalued simply using a factor multiplied by the existing ratebale value (the V.T. or V.P.). The factor depends on the year the property was first registered with the tax department. This is how they will be able to re value the 6.5 million properties in Portugal.
I cannot get my hands on the list of factors but one lawyer who told me she had seen the list thought 1911 was factor 35?!
Thus for example, and don't take this as a real situation, if your property was first registered at the Finanças in 1980 they will simply multiply the value by the factor for that year say 8 or 10 to arrive at new value. 1990 might be 5 and 2000 erhaps 1.2 or something.
Existing properties will only get revalued under the new valuation formula when they are transferred. I do know of a villa in Qta do Lago being valued last month with a tax value of €uros575,000! Presumably the factor for that will be 1!!
I cannot get my hands on the list of factors but one lawyer who told me she had seen the list thought 1911 was factor 35?!
Thus for example, and don't take this as a real situation, if your property was first registered at the Finanças in 1980 they will simply multiply the value by the factor for that year say 8 or 10 to arrive at new value. 1990 might be 5 and 2000 erhaps 1.2 or something.
Existing properties will only get revalued under the new valuation formula when they are transferred. I do know of a villa in Qta do Lago being valued last month with a tax value of €uros575,000! Presumably the factor for that will be 1!!
-
Offshore Owner
IMI
Thank you Biffa for the update.
Just to be clear , you say that the revaluation will only take place on transfer. So, for example, if an owner remains offshore in a whitelisted jurisdiction, he will, for the purposes of IMI or its successor, continue to be billed at a rate as if it were privately owned based on the existing tributavel? Also by transfer I assume that re domiciling the offshore company does not trigger a revaluation as the company registration in Portugal remains as is?
Just to be clear , you say that the revaluation will only take place on transfer. So, for example, if an owner remains offshore in a whitelisted jurisdiction, he will, for the purposes of IMI or its successor, continue to be billed at a rate as if it were privately owned based on the existing tributavel? Also by transfer I assume that re domiciling the offshore company does not trigger a revaluation as the company registration in Portugal remains as is?
IMI
As far as we are aware what you say is correct.
Certainly redomiciliation should not trigger a revaluation, albeit the details at the local Land Registry and the Central Registry in Lisbon (Registo Nacional das Pessoas Colectivas) get amended.
Certainly redomiciliation should not trigger a revaluation, albeit the details at the local Land Registry and the Central Registry in Lisbon (Registo Nacional das Pessoas Colectivas) get amended.
-
big al
IMI
Biffa, thanks for all the recent tax information posted on the CVO web site, it has been very useful, as we have recently viewed a property and are considering putting in an offer.
However, i am still a bit confused about the actual rate of the IMI tax that will be applicable and would appreciate it, if you could help by sheding some light on the matter.
We are considering purchasing at approx. €520K, the property is 17 years old, and it will be a straight forward private sale. What will the yearly IMI actually be?
Also, how is it actually paid? Monthly or up front yearly?
The seller seems to be hinting that he wants to undervalue the sale price, by how much i'm not sure at present. How is this likely to affect the IMI? As the place is being sold fully furnished, i was wondering if it is normal to slighly reduce the sale price and pay for the furnishings seperately, as we can do in the UK.
Many thanks for your help.
However, i am still a bit confused about the actual rate of the IMI tax that will be applicable and would appreciate it, if you could help by sheding some light on the matter.
We are considering purchasing at approx. €520K, the property is 17 years old, and it will be a straight forward private sale. What will the yearly IMI actually be?
Also, how is it actually paid? Monthly or up front yearly?
The seller seems to be hinting that he wants to undervalue the sale price, by how much i'm not sure at present. How is this likely to affect the IMI? As the place is being sold fully furnished, i was wondering if it is normal to slighly reduce the sale price and pay for the furnishings seperately, as we can do in the UK.
Many thanks for your help.
IMI
IMI has nothing to do with market value. The property will have a present V.P or V.T. value (valor Patrimonial or Valor Tributavel). If it is in the Lagoa area last year you would pay 1.3% of that V.P.
Ask to see last years rate demand and you will see the V.P. and the rate payable. The house will get revalued upwards under the new laws and then you will pay something between 0.4% and 0.8% (probably at the higher end of this scale.
Underderclaration has been rife in the past and will continue but at higher values (my view). If I ignore the legal and moral aspects of underdeclaration which is of course a fraud against the tax department, if you under declare then you could be faced with a larger than actual capital gain later unless YOUR buyer goes along with the same scam.
Better to pay the sisa now at 6% max than the CGT later at 20% or 25%
Ask to see last years rate demand and you will see the V.P. and the rate payable. The house will get revalued upwards under the new laws and then you will pay something between 0.4% and 0.8% (probably at the higher end of this scale.
Underderclaration has been rife in the past and will continue but at higher values (my view). If I ignore the legal and moral aspects of underdeclaration which is of course a fraud against the tax department, if you under declare then you could be faced with a larger than actual capital gain later unless YOUR buyer goes along with the same scam.
Better to pay the sisa now at 6% max than the CGT later at 20% or 25%
-
Guest
The Sunday Times have two articles this week on Tax. Go to:
www.timesonline.co.uk/article/0,,2097-832599,00-html
/0,,2098-830026,00.html
Good luck[/url]
www.timesonline.co.uk/article/0,,2097-832599,00-html
/0,,2098-830026,00.html
Good luck[/url]
-
Peter Belinfante
Tax reform and the offshore property company
I found some new information in this weeks electronical edition of
The Algarve Resident.
Go to www.algarveresident.com and then to:
More Weekly Features in the menu at the left side, and then go to:
Market Report Part 5. (Tax Reform and the Offshore Property Company Part 5)
The Algarve Resident.
Go to www.algarveresident.com and then to:
More Weekly Features in the menu at the left side, and then go to:
Market Report Part 5. (Tax Reform and the Offshore Property Company Part 5)
Tax reforms
I would be careful of some of the ideas being expressed publicly. We have looked at just about everything and some of the less obvious moves like Gifts and Leases may have problems associated with them.
I have already heard of one Notary who refused to accept a Deed of Gift from a Company as a company is an organisatio for profitable purpose and normally would not have power to "gift" its assets.
I have already heard of one Notary who refused to accept a Deed of Gift from a Company as a company is an organisatio for profitable purpose and normally would not have power to "gift" its assets.
-
Guest
Off-shore companies
"The Portugal News" has published today a front page article announcing "Offshore Amnesty?"- the article says that the government is on the verge of moderating its controversial new property tax legislation. Owners will have to wait for the publication of the 2004 state budget for the full implication of these reforms.
However, there is speculation that the government will introduce a system whereby off-shore companies can be registered on-shore in Portugal while still retaining most of the fiscal benefits they presently enjoy.
The "News" further states that while the exact gist of the governments revised proposals will only be known on publication of the state budget, sources are adament that it will contain a moratorium or amnesty. During this period, offshore property owners who take their homes on-shore will be free of any capital gains tax. They will then be treated as all other property owners by being required to pay annual ownership taxes at the 2003 level plus a maximum of 50 Euros in the first year. This will be increased in subsequent years by 25 Euros per annum until the correct tax rate is achieved.
However, there is speculation that the government will introduce a system whereby off-shore companies can be registered on-shore in Portugal while still retaining most of the fiscal benefits they presently enjoy.
The "News" further states that while the exact gist of the governments revised proposals will only be known on publication of the state budget, sources are adament that it will contain a moratorium or amnesty. During this period, offshore property owners who take their homes on-shore will be free of any capital gains tax. They will then be treated as all other property owners by being required to pay annual ownership taxes at the 2003 level plus a maximum of 50 Euros in the first year. This will be increased in subsequent years by 25 Euros per annum until the correct tax rate is achieved.
-
Offshore Owner
Very interesting but owners are still very much at risk if they wait for the 04 budget before taking action. Those of us who opted to remain offshore albeit in a alternative jurisdiction are now out of pocket to the tune of the transfer costs, if and it is a big if, this goes through. The big question remains why did they not think this through properly at the outset and why the sudden change of direction?? All eyes on the 04 budget then. Anyone know when this is published?
-
MIKE VERRAN
- CVO Newbie
- Posts: 5
- Joined: Tue Feb 04, 2003 7:02 pm
IMI
Very very interesting,whats concerniog me though is if the media can get this imformation why cant we,if info is correct hundreds of thousands of euros have been wasted to date.