In Portugal, the yearly property tax is called IMI (Imposto Municipal sobre Imóveis) and depends on the tax asset value, or so-called patrimonial value of the property, which in Portuguese is called the Valor Tributário Patrimonial (VPT). It’s possible to pay the tax in one, two or three instalments (in May, August and November), depending on the total amount. In this post we will discuss how it’s calculated and when and how it is paid.
What is IMI?
Municipal property tax (IMI) is paid annually by owners of rural and urban properties. The revenue goes to the local authorities, and is one of the principal sources of financing for the municipality.
The amount payable and the number of instalments is directly related to the tax asset value of the property, plus an additional amount set every year by the municipality, within the central Government guidelines. In Portuguese, the tax value is called the Valor Patrimonial Tributário, or VPT, and can be found on the property’s caderneta predial document. This document can be downloaded whenever you wish from your personal area of the Finanças portal, at this link (after logging in).
How is the IMI tax calculated?
As we have already stated, the IMI property tax is based on the tax asset value (VPT) of the property, which can be found on the caderneta predial document.
The VPT is determined by a complicated calculation taking into account general building costs, property areas, type of property, location, quality and age. The resulting number is then multiplied by a coefficient provided by the municipality the property is located in, and which is communicated annually to Finanças by all municipalities before the end of the year. These coefficients can be consulted on the Finanças website here. These coefficients for urban properties are generally of the range 0.3% to 0,45% and for rural properties (e.g. rustic land) 0.8%.
Example: the IMI for a property in Lisbon (municipal IMI coefficient of 0.3%) with a VPT on the caderneta predial of 80,000 euros = 80,000 x 0.003 = 240 euros per year.
If you have children in your household and you have declared them as a family unit at Finanças, there is a further deduction in those municipalities that practice this, and which can be consulted at the link above. 1 dependent gives a discount of 30 euros, 2 dependents a discount of 70 euros and 3 or more dependents a discount of 140 euros per year.
Date used to attribute the IMI tax
IMI tax is charged to whoever was the owner of the property on 31st December of that particular year. This means that if you sell a property on 30th December 2024, you will not pay IMI tax for 2024. Equally, and even though the buyer in this example is the property owner for only 1 day in the year, they will be responsible for paying the 2024 IMI tax in its entirety!
IMI payment dates
The IMI tax is levied in 3 months of the year: May, August and November. Whether you pay in one, two or three instalments depends on the total amount to be paid, as follows:
– May: total IMI is under 100 euros
– May & November: 100 euros or more, and under 500 euros
– May, August & November: 500 euros or more
It is also possible to pay the entire tax for the year in one instalment. The first IMI payment note issued by Finanças in May includes two multibanco payment references, one for the May instalment and another for the entire amount (if more than 100 euros).
How to pay the IMI tax
When the IMI property tax is due, Finanças issues a payment note, which may arrive by post or, if you have signed up for electronic notifications on the portal, electronically (either via the ViaCTT platform, or to be downloaded from the Finanças portal itself).
Normally, the payment note indicates multibanco references and payment is made via your online banking app or website (Pagamento Estado). However, it is also possible to set up a direct debit such that the relevant amount is taken automatically from your bank account. This can be done at the following link, once signed in to the Finanças website:
It’s possible to obtain exemption from the IMI tax in the following circumstances:
- for property purchases where the VPT value (see above) is less than 125,000 euros, and the family unit’s earnings are less than 153,300 euros per year. In this case, a 3-year IMI exemption can be requested a maximum of 2 times in the life of the tax payer.
- for property purchases where the VPT value is less than 66,500 euros, and the family unit’s earnings are less than 15,295 euros per year. In this case the exemption is determined automatically and is permanent.