Source: Adobe Stock Author: Redaction The IMT (Municipal Tax on Onerous Property Transfers) exemption is a significant tax benefit for companies and individuals in the real estate sector in Portugal. This exemption applies, for example, to companies that purchase properties for resale within a legally defined period, provided they meet certain formal and substantive requirements. However, the application of this exemption can become complex when deals involve mixed transactions, such as the combination of purchase and sale with exchanges, a common practice in the real estate market. What is the IMT Exemption for Resale? In Portugal, companies that regularly engage in the purchase and sale of real estate can benefit from the IMT exemption on acquisition, provided that they are legally obliged to resell the property within a maximum period of three years. To enjoy this benefit, they must expressly state in the public deed of purchase that the property is being acquired for resale. This exemption aims to facilitate the commercial activity of real estate companies, reducing initial tax costs and encouraging market growth. Mixed Contracts and the Refusal of IMT Exemption The problem arises when the real estate transaction is not a simple purchase and sale, but a mixed contract that also includes an exchange. The Tax Authority (AT) has adopted the understanding that, in these cases, the IMT exemption expires, even if the purchase and sale component is predominant in economic terms. This means that the inclusion of an exchange in the deal requires the payment of IMT on the total value of the transaction, penalising companies that expected to benefit from the exemption. This position was recently confirmed by a decision of the Administrative Arbitration Centre (CAAD), which ruled in favour of the tax authorities, despite one of the arbitrators voting against. The case involved a real estate company that sold a plot of land for one million euros, including in the transaction the exchange of two future apartments valued at 250,000 euros. The AT settled the IMT that was not initially paid, charging around 100,000 euros plus interest. Reasons given by the Tax Authority The AT bases its decision on the legal form of the transaction, considering the existence of the exchange as a factor that prevents the exemption from being applied. For the tax authorities, the mere inclusion of an exchange, even if of lesser value, alters the nature of the contract, removing the tax benefit. This interpretation favours form over the economic substance of the transaction, contrary to the view of some experts who argue that the economic criterion should prevail. Consequences for Real Estate Companies For companies in the sector, this interpretation implies an unexpected increase in tax costs for transactions involving mixed contracts. The loss of the IMT exemption can have a significant financial impact, affecting the profitability of real estate projects and their economic viability. In addition, the legal uncertainty generated by this position of the tax authorities makes it difficult to plan and execute complex transactions, which are common in todays market. Case Law and Doctrine in Debate Although the Supreme Administrative Court has already ruled that bartering prevents IMT exemption, there is still doctrinal debate on the issue. Some jurists argue that when the exchange represents only a small part of the business and the purchase and sale is the main operation, the exemption should be maintained. This view values economic substance over legal form, proposing a more flexible interpretation adapted to market realities. Alternatives and Recommendations for Market Operators Given the current understanding of the Tax Authority, real estate companies should pay special attention when structuring their contracts. One possible solution to preserve the IMT exemption is to draw up separate deeds for the purchase and sale and for the exchange, thus avoiding the configuration of a mixed contract. This practice can help clarify the nature of the transactions and minimise tax risks. In addition, it is essential to seek specialised legal and tax advice to ensure compliance with legal requirements and assess the tax impact of transactions. Monitoring court decisions and AT guidelines is also essential to anticipate changes and adjust strategies. The IMT exemption is an important tool for promoting real estate activity in Portugal, but its application in mixed contracts with exchange is subject to strict restrictions by the tax authorities. The recent CAAD decision reinforces the position of the Tax Authority, which refuses the exemption whenever there is an exchange, even if it is a minority part of the transaction. For companies in the sector, this scenario requires greater care in drafting contracts and managing projects from a tax perspective. A clear understanding of the rules and the adoption of best practices can avoid unpleasant surprises and ensure that the available tax benefits are correctly utilised.
Source: Adobe Stock Author: Redaction The phenomenon of depopulation and demographic ageing is increasingly evident in vast areas of the country’s interior, from Trás-os-Montes to the Algarve. According to data from the National Statistics Institute (INE), in 2023, the nine Intermunicipal Communities fully located inland Portugal had almost 1.29 million inhabitants, around 130,000 fewer than in 2011. This worrying trend results from a combination of several factors: internal migration to major urban centres, emigration, negative natural balance (more deaths than births) and, in some cases, insufficient incentives for young people to remain or return to inland areas. Diverse Realities of the Interior The reality of inland Portugal is heterogeneous. There are more isolated areas where ageing is a structural and longstanding issue, and other intermediate regions, closer to the coast, which until recently showed demographic vitality but now also face challenges of ageing and population loss. In both cases, the decline in the number of young residents is a critical problem, with direct impacts on the economic, social and cultural sustainability of these territories. Insufficient Incentives for Young People Despite efforts by some local authorities, subsidies and incentives for young couples to stay or have children inland have had limited impact. Many of these measures are considered symbolic and insufficient to reverse the depopulation trend. It is necessary to go beyond one-off supports and create structural conditions that make inland areas more attractive to new generations. Among these conditions are access to housing, quality employment, efficient public services, and a good quality of life. Housing Incentives for Young People and Their Insufficiency In recent years, various housing incentives targeted at young people have been implemented, including exemptions from IMT and Stamp Duty on the purchase of a first own and permanent home for young people up to 35 years old, as well as public guarantee housing credit programmes, youth rental support (such as Porta 65), and specific financing lines to facilitate access to homeownership. These measures allow young people to buy or rent homes with fewer initial financial burdens, increasing their autonomy and ability to settle in areas where access to housing is more challenging. However, despite these advances, the insufficiency of support and limits on maximum eligible amounts mean many young people continue to face practical difficulties, especially in inland regions where the housing market may be more limited and incomes are generally lower. The lack of adequate responses to the real needs of young people, such as access to affordable housing and stable employment opportunities, ultimately limits the positive impact of these incentives, making it difficult to reverse the phenomenon of depopulation and demographic ageing. Thus, the insufficiency of housing supports for young people not only hinders the settlement of new residents but also reduces their capacity for investment and community integration, perpetuating the cycle of declining vitality in these territories. Mobility and Aspirations of New Generations The mobility of new generations is another factor to consider. Unlike in the past, when people tended to stay in the same place their whole lives, today young people value freedom of movement, both nationally and internationally. Therefore, public policies on incentives for young people must be adapted to this new reality, promoting not only settlement but also return and attraction of talent, regardless of origin. Role of Immigration Immigration has helped mitigate depopulation in some inland regions, especially since 2021. However, this dynamic is recent and insufficient to offset the negative natural balance, which in 2024 amounted to a loss of 33,732 people in Portugal, according to the INE. Only Greater Lisbon recorded a positive balance during this period, highlighting population concentration in urban areas. Strategies and Public Policies To reverse the trend of ageing and depopulation, it is essential to invest in robust and structural public policies. Incentives for young people, such as birth subsidies, housing support, reduction of bureaucracy and creation of employment opportunities, are essential but must be complemented with investment in infrastructure, public services and initiatives promoting territorial cohesion. Only then will it be possible to create conditions for young people to choose to live, work and start families inland. Valuing Local Communities Experience shows that territories with vitality and an active population have greater capacity to attract new residents. Therefore, the development strategy for inland areas must focus on valuing local communities, promoting innovative projects and creating support networks between municipalities. Collaboration between local authorities, central government and the private sector is crucial to ensure the effectiveness of measures and the sustainability of results. Incentives for young people are a key element in combating depopulation and ageing of inland Portugal. However, for them to be effective, they need to be integrated into broader public policies that promote the attractiveness of these territories and respond to the aspirations of new generations. Only in this way will a sustainable future for the country’s interior be guaranteed.
Source: Adobe Stock Author: Redaction Extended Deadline for IMI Payment in 2025 In 2025, the deadline for payment of the Municipal Property Tax (IMI) has been exceptionally extended until the end of June. This measure arises due to delays in issuing and sending settlement notes, caused by technical constraints that occurred at the end of April. Thus, all taxpayers have more time to regularise IMI payment, either in a single instalment or the first instalment, without risk of penalties or fines. Despite the delay in sending settlement notes by post, IMI payment references are already available on the Tax Authority Portal. This means it is possible to pay the tax within the legal deadline, even if you have not yet received the note at home. 1) What is IMI? 2) How the IMI Amount is Determined 3) How to Make IMI Payment 4) Consultation and Payment References 5) IMI Payment in Instalments 6) Early Payment 7) Special Situations: Inheritances and Questions 8) Final Recommendations for IMI Payment What is IMI? IMI, or Municipal Property Tax, is an annual tax levied on the taxable patrimonial value of urban and rural properties located in Portugal. This tax is due by all owners, usufructuaries, or commercial properties holders of properties registered on 31 December of the year prior to collection. The amount to pay is calculated based on the property’s patrimonial value and the rate defined by the municipality where it is located, typically ranging between 0.3% and 0.45% for urban properties and up to 0.8% for rural properties. IMI constitutes an important source of revenue for local authorities, used to finance public local services, infrastructure, green spaces, schools, and urban rehabilitation projects. How the IMI Amount is Determined The IMI calculation considers the taxable patrimonial value (VPT) of the property, resulting from an assessment conducted by the Tax and Customs Authority (AT). This value can be consulted in the property tax booklet, available on the Tax Authority Portal. The IMI rate is set annually by each municipality, within established legal limits, and may vary depending on the location and type of property. Additionally, there are specific situations that may influence the IMI amount payable, such as tax benefits for rehabilitated properties, urban properties used as primary residence by large families, or temporary exemptions for new properties. How to Make IMI Payment IMI payment can be made in various ways and at different deadlines depending on the total tax amount calculated for each taxpayer. In 2025, due to the extended deadline, taxpayers have until the end of June to pay the first instalment or the full tax amount, if applicable. Consultation and Payment References Even if you have not received the settlement note by post, you can access the Tax Authority Portal to consult all necessary information. Simply log in with your credentials, go to the IMI section, and select the year 2025 to view the settlement notes and corresponding payment references. These references allow you to pay the IMI at any ATM, online banking service, or post office counter. For those who subscribed to Via CTT, notifications and settlement notes are received exclusively electronically, reducing the risk of delays or lost mail. IMI Payment in Instalments IMI can be paid in one, two, or three instalments depending on the total tax amount: Amount under 100 euros Single payment, normally in May, but in 2025 until the end of June; Amount between 100 and 500 euros Payment in two instalments, the first by the end of June and the second in November; Amount over 500 euros Payment in three instalments, with deadlines in June, August, and November. Taxpayers may, if they prefer, pay the full IMI amount in the first instalment even if entitled to phased payment. Early Payment There is the option to make early payment of IMI if the taxpayer wishes. This option may be advantageous for those wanting to avoid forgetfulness or spread costs throughout the year. In 2023, over half a million taxpayers opted to pay IMI early. Special Situations: Inheritances and Questions In the case of properties in inheritance sharing processes, IMI payment is mandatory even if the process is not concluded. To obtain payment references, it is possible to access the Tax Authority Portal using the inheritance’s taxpayer number (NIF), request an access password for the head of the estate, or alternatively, visit a Tax Office or contact the Tax Authority. If you have questions about the amount, instalments, or payment methods, it is recommended to contact the Tax Authority helpline directly or consult the Tax Authority Portal where all updated information is available. Final Recommendations for IMI Payment Regularly check the Tax Authority Portal to ensure you have access to payment references; Consider subscribing to Via CTT for electronic notifications to avoid delays; Keep all payment receipts for future reference; Respect deadlines to avoid interest and fines; In case of doubts or exceptional situations, contact the Tax Authority promptly. Payment of IMI is an annual obligation requiring attention to deadlines and procedures. In 2025, with the extended deadline until the end of June, taxpayers have an additional opportunity to regularise their tax situation without penalties. Stay alert to official communications and use available digital resources to simplify the entire process.
Source: Adobe Stock Author: Redaction The issue of inheritances and capital gains has been one of the most debated topics among heirs and tax experts in Portugal. Until recently, selling your share of an inherited property, especially when the estate had not yet been divided, could result in a hefty IRS tax bill on capital gains. However, a recent decision by the Supreme Administrative Court has radically changed this scenario, bringing relief and new opportunities to thousands of taxpayers. 1) What are undivided inheritances and capital gains? 2) The previous understanding of the IRS 3) What has changed with the Supreme Administrative Court? 4) Implications for taxpayers 5) How to deal with this new reality? 6) The future of inheritances and capital gains in Portugal What are undivided inheritances and capital gains? When a person dies and leaves assets to their heirs, these assets form an inheritance. As long as there is no formal division, the inheritance is considered undivided and belongs to all the heirs together. Each heir has a ‘hereditary share’, i.e. an abstract share of the inheritance, which can include real estate, bank accounts or other assets. In turn, capital gains refer to the profit made on the sale of an asset, such as a property. As a rule, the sale of property is subject to IRS on capital gains, which has a direct impact on the net amount received by the seller. The tax authorities previous view For years, the Tax and Customs Authority (AT) argued that the sale of a hereditary share, i.e. an heirs share of an undivided inheritance, was equivalent to the sale of a property. It therefore required the payment of IRS on the capital gains resulting from this transaction. This interpretation led many taxpayers to pay high taxes when selling their share of the inheritance, even though they had never enjoyed the property in question. What has changed with the Supreme Administrative Court? The Supreme Administrative Court (STA) recently contradicted the ATs view. In a ruling that standardised case law, the STA clarified that the sale of a hereditary share does not constitute an onerous alienation of rights in rem in immovable property. In practical terms, this means that when selling their share in an undivided inheritance, the heir is not directly selling the property, but rather their position in the inheritance. As a result, any gains made on this sale are not subject to capital gains tax. This decision standardises case law and obliges the courts to follow this understanding in future cases, protecting the interests of the heirs. Implications for taxpayers This change is especially relevant for those who inherited property jointly with other family members and, for whatever reason, want to sell their share before the inheritance is formally divided. Now, when selling their inheritance share, the heir will not have to pay IRS on capital gains, unlike before. In addition, taxpayers who have already paid capital gains tax in similar situations can request an unofficial review by the Tax Authority. If the review is not favourable, they can also appeal to the courts, where the STAs new guidance will be decisive. How should you act in the face of this new reality? If you are thinking of selling your share in an undivided inheritance, it is important to consult a lawyer or accountant specialising in inheritance and tax law. Make sure that the transaction is correctly documented as a sale of an inherited share and not as a direct sale of property, to avoid problems with the tax authorities. If you have already paid IRS on capital gains in a similar situation, gather all the documentation and ask for the process to be reviewed. This could be your chance to recover the amounts you paid unduly. The future of inheritances and capital gains in Portugal The decision by the Supreme Administrative Court marks a new chapter in the taxation of inheritances in Portugal. By clarifying that the sale of an inheritance is not subject to IRS on capital gains, an important precedent has been set that could influence future legislative changes and the actions of the Tax Authority. For heirs, this is a significant victory that brings fairness and transparency to the inheritance tax system. At the same time, it reinforces the importance of paying attention to court rulings and seeking specialised advice on inheritance and capital gains. If you have inherited a property and are considering selling your share, know that the law is now on your side. Take advantage of this new reality to make more informed decisions and protect your assets.
Source: Adobe Stock Author: Redaction The IMI (Municipal Property Tax) settlements for 2025 are being reviewed by the Tax and Customs Authority (AT), which will adjust all cases where an exemption from the tax was requested. This measure aims to correct any potential errors and ensure that taxpayers benefit from the fiscal rights provided under current legislation. IMI Exemptions for Landlords with Frozen Rents The main update concerns landlords with old rental contracts, signed before the introduction of the Urban Lease Regime (RAU), who, according to the updated Statute of Fiscal Benefits (EBF) in the 2024 State Budget, are entitled to an IMI exemption. These property owners, whose rental income is taxed under Category F, should be exempt from paying the tax for the duration of their rental contracts. However, many of these landlords have received IMI settlement notices for 2025, even though they are legally exempt, leading to complaints and requests for review with the Tax Authority. In response, the AT has committed to reviewing all settlements by the end of June 2025, adjusting the amounts due or refunding any overpaid amounts, depending on the case. Review Process and IMI Refunds To facilitate the review of settlements, a specific form was made available on the Finance Portal in July 2024 for property owners who qualify for this exemption. This exemption update is still in progress, which explains the delay in correcting settlements for some taxpayers. In cases where IMI has already been paid, the AT may opt to adjust future payments or proceed with refunding the overpaid amounts, depending on the taxpayers profile and the amount involved. This is a crucial measure to ensure compliance with fiscal regulations, preventing instances of undue charges. Impact on Property Owners Finances For many property owners, especially those with old rental contracts, this review of IMI settlements represents a significant financial relief. In many cases, frozen rents have failed to keep up with inflation and rising property maintenance costs, making the IMI exemption a key measure to protect landlords income. Furthermore, this correction is essential to ensure investor confidence in the Portuguese real estate market, ensuring that fiscal rights are respected and that the tax system operates in a fair and transparent manner. Deadlines and Procedures for 2025 Taxpayers who qualify for these exemptions should be mindful of the deadlines for submitting their review requests. The deadline for the payment of the first IMI instalment, which normally occurs in May, has been extended until the end of June 2025, allowing affected taxpayers time to regularise their situation with the Tax Authority. If the IMI debt is less than €100, the payment must be made in a single instalment. For amounts exceeding this, taxpayers can opt for payment in two or three instalments, depending on the total amount. This flexibility is particularly important for landlords who are awaiting the correction of their settlements. What to Expect for the Future With the promise of a review of the IMI settlements in progress, it is expected that property owners will benefit from a fairer and more transparent system for 2025 and beyond. For landlords with frozen rents, this correction is an important step in ensuring that their fiscal rights are respected, promoting a more balanced and competitive real estate market. Through this measure, the Portuguese government reinforces its commitment to supporting property owners who provide affordable housing, balancing fiscal responsibilities with taxpayer rights.
Source: Adobe Stock Author: Redaction In recent times, a specific group of landlords in Portugal has faced a significant tax dilemma related to the Municipal Property Tax (IMI). These are the owners of properties with frozen rents, who, according to the 2024 State Budget (OE2024), should be exempt from paying IMI. However, despite this promised exemption, many of these landlords are now receiving IMI payment notices, creating confusion and concern. This section explores the situation and the challenges faced by these property owners. IMI Exemption and the 2024 State Budget The 2024 State Budget introduced an IMI exemption specifically for landlords with rental contracts signed before 1990. This measure was designed to reduce the financial burden on these landlords, who have been unable to increase their rental income for decades due to rent freezes, significantly affecting their financial stability. The goal of this exemption is to provide some compensation for these financial losses, but its implementation has faced significant challenges. The Reality for Landlords with Frozen Rents Despite being clearly outlined in the legislation, many landlords of properties with frozen rents are still receiving IMI bills, which contradicts the governments promise. These property owners, who should be exempt from this tax, are now being charged a fee that, by law, should not apply to them. This situation has led to frustration and uncertainty, as many expected the exemption to be directly reflected in their IMI notices. Procedures at the Tax and Customs Authority (AT) When landlords seek clarification from the Tax and Customs Authority (AT) about their situation, many are advised to pay the tax first and then file a formal complaint. This process places an additional burden on landlords who are already struggling financially due to frozen rents. Moreover, many landlords have expressed frustration over the lack of clear guidance and the slow pace at which these cases are being handled. Delays in Case Resolution and Fiscal Uncertainty The situation is even more concerning for landlords who submitted their exemption requests nearly a year ago and are still waiting for a response from the AT. Despite the exemption request being a key requirement for these landlords to access financial relief, the AT continues to await higher-level instructions, further increasing fiscal uncertainty and creating a climate of frustration. The lack of a timely response has put many property owners in a difficult position, especially as the IMI payment deadline approaches. Impact of Administrative Inaction The failure to correctly apply the IMI exemption can be seen as a significant administrative inefficiency, which negatively impacts property owners and fosters a sense of injustice. Landlords expect the AT to be more proactive in implementing the exemption, without requiring them to navigate a lengthy and complex process to resolve an issue that is clearly addressed in the legislation. This inaction by the AT risks undermining landlords trust in the tax administration and could complicate the resolution of similar issues in the future. The Need for IMI Exemption Reform This episode highlights the urgent need for reform in the IMI exemption process for landlords with frozen rents. It is essential that the AT implements measures to streamline the handling of these requests and ensures that property owners can benefit from the exemption without unnecessary bureaucratic hurdles. Additionally, a review of the fiscal policies for landlords with frozen rental contracts could contribute to greater tax fairness and reduce the financial burden that this group of property owners has faced over the years. The ongoing situation, where landlords with frozen rents are being charged IMI despite the 2024 State Budget exemption, reveals communication gaps and weaknesses in the implementation of fiscal legislation. Although the exemption was intended as a positive measure, its inconsistent application has caused financial losses and uncertainty for property owners. It is crucial for the AT to resolve these issues quickly, ensuring that the exemption is correctly applied and allowing landlords to benefit from the compensation provided by the law. Without effective action, the climate of dissatisfaction and mistrust is likely to persist, further straining the relationship between property owners and the tax authorities.
Source: Adobe Stock Author: Redaction The Portuguese government has made tax simplification a key priority for 2025, aiming to reduce administrative burdens on both citizens and businesses, increase transparency, and make it easier to comply with tax obligations. These changes, approved under Decree-Law No. 49/2025 of 27 March, will come into effect on 1 July, covering various areas of the Portuguese tax system, including personal income tax (IRS), corporate tax (IRC), municipal property tax (IMI), property transfer tax (IMT), and the Tax Benefits Statute. IMI Simplification: Less Bureaucracy for Property Valuation One of the main changes introduced by this new legislation focuses on the Municipal Property Tax (IMI). The process for determining the taxable value of urban properties has been simplified, removing the need for inspections for older buildings. Now, for buildings constructed before 7 August 1951, it is sufficient to submit architectural plans, preferably electronically, rather than requiring in-person inspections. This significantly reduces costs and processing times for property owners. Additionally, land for construction now benefits from a simplified process, with only the submission of planning permits or prior notifications required via the Tax Portal, as long as these documents are not automatically provided by local authorities. IMT Changes: Simplified Exemptions for Resellers For the Municipal Property Transfer Tax (IMT), professionals purchasing properties for resale also benefit from reduced bureaucracy. The certificate recognising the regularity of resale activities can now be obtained directly through the Tax Portal, eliminating the need for additional processes to confirm this exemption. VAT Simplification and Other Reporting Obligations The government has also taken steps to eliminate various redundant reporting requirements affecting both businesses and individuals. Key measures include: The removal of annexes Q and O in the Simplified Business Information (IES), simplifying the reporting of stamp duty and customer VAT data. The elimination of reporting obligations for resident taxpayers receiving savings income in the form of interest from other EU member states or dependent territories. The introduction of automatic VAT return submission for taxpayers without taxable operations, making it easier to regularise tax situations. Simplified Procedures for Small Amounts and International Shipments To further simplify the system, the legislation exempts withholding tax for small amounts under €25, reducing the administrative burden for businesses managing small transactions. Additionally, for low-value postal shipments and parcels below €1,000, the new law eliminates the need for export customs declarations to obtain an exit certificate. Instead, a simplified export certificate will be issued, facilitating VAT deductions for these transactions. Harmonisation of Deadlines and Streamlined Procedures Another area of focus is the harmonisation of deadlines for fulfilling tax obligations. From 2025, deadlines for IRS declarations, as well as the validity of certificates of regular tax and social security status, will be aligned, with most declarations due by the end of February. Other simplifications include the removal of physical plan requirements for certain types of properties and the waiver of activity declaration requirements for taxpayers with only a single taxable transaction, reducing the complexity of starting a business for small entrepreneurs and freelancers. Impact on Taxpayers With these measures, the government aims to improve the taxpayer experience, promoting a more transparent and efficient relationship with the Tax Authority. For businesses, this means less time spent on paperwork and more focus on growth, while for individuals, it promises greater clarity in tax obligations and fewer administrative headaches. By cutting red tape and eliminating redundancies, these changes mark a significant step towards making the Portuguese tax system simpler and more accessible, reflecting the governments vision of creating a more favourable and competitive economic environment. If you want to benefit from these new rules or simply stay informed about your tax obligations, now is the time to prepare for the changes coming into effect on 1 July 2025.
Source: Adobe Stock Author: Redaction 1) What is IMI? 2) What is VPT? 3) How to obtain IMI payment details 4) How many instalments should I pay? 5) Are you overpaying IMI? Heres how to check 6) Simulate before requesting a revaluation 7) Consequences of not paying IMI on time 8) Best practices for managing IMI What is IMI? The Municipal Property Tax (IMI) is one of the most important tax obligations for property owners in Portugal. Every year, property owners must pay this tax, which is calculated based on the tax asset value (VPT) of the property. Payment can be made in one, two, or three instalments, depending on the amount owed. In 2025, the deadline for paying the first IMI instalment is 31 May. What is VPT? The Tax Asset Value (VPT) is the value assigned by the Tax Authority to properties for tax purposes, such as calculating the IMI. This value is determined using a formula that considers factors like the propertys area, location, construction quality, and age. Although the VPT does not reflect the market value, it serves as the basis for tax calculation and can be adjusted if the owner requests a new valuation from the Tax Authority. If you havent received your IMI bill, youre still obligated to pay. The absence of this document, whether due to an incorrect address or email delivery issues, does not invalidate the tax obligation. Fortunately, you can obtain all the necessary payment details via the Tax Authoritys online Portal. How to obtain IMI payment details To check your payment notice online, follow these steps: Visit the Tax Authority Portal. Log in with your NIF and access password. Select Services > Municipal Property Tax (IMI). Click on Consult Payment Notices. Choose the year of payment, in this case, 2024. This will show the Multibanco reference, the amount to be paid, and the respective deadlines. With this information, you can make the payment via online banking, ATM, or at the bank counter. How many instalments should I pay? The number of IMI instalments depends on the total amount to be paid: Less than 100 euros: single payment in May. Between 100 and 500 euros: two instalments (May and November). Over 500 euros: three instalments (May, August, and November). These deadlines are fixed and apply to all taxpayers, regardless of whether they receive the payment notice by post. Are you overpaying IMI? Heres how to check If you suspect the IMI amount is too high, you might be overpaying. IMI is calculated based on a formula that includes various coefficients, such as location, property type, area, age, and construction quality. Not all of these coefficients are updated automatically. One example is the obsolescence coefficient, which represents the propertys age. This is only updated if the owner requests a new valuation from the Tax Authority. This means that a property more than two years old could still be taxed as if it were new if it hasn’t been revalued. This can result in an outdated and inflated tax asset value (VPT). For instance, imagine a newly purchased home three years ago. If it hasnt been revalued, it still has an obsolescence coefficient of 1. After revaluation, this could drop to 0.9, reflecting the loss of value over time. This small difference could lead to significant savings on the IMI. Simulate before requesting a revaluation Before proceeding with a revaluation request, it’s essential to simulate the impact of this change. There are online simulators that can help you determine whether updating the coefficients will lead to a reduction or an increase in the tax. This is because all coefficients, including the price per square metre of housing, which has risen considerably in the past two years, will be reviewed by the Tax Authority. In some cases, the IMI amount may even increase after the revaluation. If the simulation indicates potential savings, you can submit IMI Model 1 on the Tax Authority Portal by 31 December. The new valuation will apply to the tax due in the following year. Consequences of not paying IMI on time Failing to pay IMI on time results in late payment interest and can trigger fiscal enforcement processes, with penalties and additional costs. To avoid these situations, make sure to check the data on the Tax Authority Portal and meet the deadlines, even if you don’t receive the payment notice by post. Best practices for managing IMI Check your registered email and address with the Tax Authority to ensure you receive tax communications. Mark the IMI deadlines in your calendar: May (always), August and November (if applicable). Simulate possible savings on IMI with a revaluation of the VPT. Keep payment receipts and update property details whenever necessary. IMI is an annual tax that all property owners must pay, but there are ways to manage and even reduce this burden. If you havent received your payment notice, you can and should obtain the details from the Tax Authority Portal. If you think you’re paying too much, simulate the impact of a revaluation and see if it’s worth it. With information and planning, its possible to meet the tax obligation and still save on IMI.
Source: Adobe Stock Author: Redaction What is an Interest Rate Cut and How Does it Work? An interest rate cut is a measure taken by central banks, such as the European Central Bank (ECB), to boost the economy. By lowering reference interest rates, commercial banks adjust their financial products, including loans and credits. In the context of mortgage loans, the reduction in interest rates can lead to a decrease in monthly payments, thus easing the financial burden on households. When interest rates are reduced, there is a direct impact on existing loan conditions. While mortgage payments depend on variables such as the Euribor rate, which influences variable-rate loans, the ECBs interest rate cut can result in a reduction in reference interest rates, directly affecting consumers. Impact of the Interest Rate Cut on Mortgage Payments The interest rate cut can have noticeable effects on mortgage payments. For those with variable-rate mortgages and rate reviews scheduled for the coming months, a reduction in monthly payments can be expected. If the loan is based on Euribor, for example, the drop in interest rates could lead to significant savings. For instance, if someone has a loan of €150,000, with a spread of 1% and a 6-month Euribor at 3%, the rate review for the following month could lead to savings of approximately €20 to €40 per month, depending on the interest rate configuration. For a loan of €250,000, savings could range from €35 to €70 monthly, depending on the same configuration. This relief in payments is welcome, especially for those who already have an active mortgage. However, for those planning to take out new financing, the reality may be different, as financial institutions may adjust their spreads and requirements in response to economic instability. Advantages of the Interest Rate Cut for Households The primary advantage of the interest rate cut for households is immediate financial relief. The reduction in payments can free up part of the family budget, which can be directed towards other needs, such as savings, investments, or even reducing other debts. The flexibility provided by an interest rate cut is a significant help for those already facing high monthly expenses. Moreover, for those trying to pay off an early-stage mortgage, the interest rate cut can be an excellent opportunity to reduce the financial impact. With a lower interest rate, the overall debt can be paid off more quickly, as the portion allocated to interest will be smaller. Challenges and Considerations When Applying for New Credit While the interest rate cut is beneficial for those already holding a mortgage, its influence on conditions for new loans may be limited. In some cases, reference interest rates may be more attractive, but global economic uncertainty could cause banks to increase their spreads or fees associated with loans. This measure could make it harder for many households to access credit. Economic instability, exacerbated by events such as international crises or trade conflicts, may lead banks to adopt a more cautious approach. Even with the reduction in reference interest rates, a more restrictive credit policy could make loan approval more difficult. Analysts also warn that, during periods of uncertainty, banks tend to increase spreads to offset the associated risk, which could counteract the positive effects of the interest rate cut. Long-Term Impact of the Interest Rate Cut In the long run, the interest rate cut may contribute to a global reduction in debt burden. With lower interest rates, the total cost of credit decreases, benefiting those in the process of repaying a mortgage loan. This scenario may allow for more efficient debt management, promoting personal financial stability. Furthermore, the interest rate cut could stimulate the real estate market, as it may make financing more accessible to more people, leading to increased demand for properties. However, this demand also depends on consumer confidence in the stability of the economy and their ability to meet mortgage payments. An interest rate cut may be good news for those already with a mortgage, as they await a reduction in their payments. For those planning new financing, it is important to consider that, although the ECB has reduced interest rates, spreads and conditions offered by banks may vary depending on the economic situation. In any case, responsible credit management remains crucial. The savings generated by the interest rate cut should be used to improve the family’s financial health, but it should be done with care to avoid compromising future financial stability. Families who take advantage of the interest rate cuts can enjoy financial relief, but they should remain mindful of the potential risks that economic scenarios may bring. Comparing offers and continuously evaluating credit conditions are essential to making the best financial choice.
Source: Adobe Stock Author: Redaction IRS consignment is a simple, cost-free way to support social, cultural, religious or environmental organisations without affecting the amount of tax you owe or are due to be refunded. It’s a generous act that can make a real difference to those in need, and it’s available to every taxpayer. Between 1 April and 30 June, when submitting your IRS (personal income tax) return, you can choose to donate 0.5% of your assessed tax to a registered institution. This amount is taken from the total tax the state would normally collect and doesn’t cost you anything extra. What is IRS consignment? IRS consignment allows you to allocate a small portion of tax you’ve already paid to the state to an authorised entity. The percentage (0.5%) is not taken from your refund, nor does it increase your bill, it simply redirects that share to the institution of your choice instead of the state. In addition to IRS, you can also choose to consign part of your VAT refund. This involves giving up 15% of the VAT deduction from invoices in sectors like car repairs, hairdressing, accommodation, veterinary services, and restaurants, provided you requested a receipt with your taxpayer number (NIF). Who can receive your consignment? You can choose to consign your IRS, VAT, or both to eligible organisations, including: Religious institutions Private social solidarity institutions (IPSS) Public utility entities working in environmental causes Cultural entities recognised as public utility All these organisations must be pre-authorised by the Tax Authority. Each year, an official list of eligible entities and their taxpayer numbers (NIFs) is published on the Finance Portal, and you must choose from this list. How to consign IRS in your tax return? If you didn’t submit your consignment in advance by 31 March, you can still do it when submitting your annual IRS return. Simply follow these steps: Log in to the Finance Portal and complete the Model 3 tax return. On the front page, go to Box 11, dedicated to IRS and VAT consignment. Select the type of entity you wish to support. Enter the NIF of the chosen organisation. Choose whether to consign IRS, VAT, or both. If you’re using the automatic IRS return, you’ll need to exit that option and switch to the full version to activate consignment. Even with the pre-filled form, you can still edit Box 11 before submitting. Is VAT consignment worth it? When you consign VAT, you give up a portion of the deduction that could otherwise be refunded to you, although the amount is usually small. This option can help increase support for institutions, especially useful if your IRS consignment value is low. However, unlike IRS consignment (which is cost-free), VAT consignment does affect your refund amount, so you should carefully consider whether you’re happy to give up part of that benefit for a good cause. Does consignment affect my IRS? No, IRS consignment doesn’t increase your tax bill or reduce your refund. It simply redirects up to 0.5% of the tax you would already be paying to the state to a cause you support. It’s a way of choosing where part of your money goes, without paying more. On the other hand, VAT consignment does affect your refund. You give up part of the deduction you’d normally receive. It’s worth weighing this option, especially if you’ve had significant VAT-eligible expenses. Be generous: make your choice In challenging social and economic times, many households, charities, and institutions depend on the generosity of taxpayers. IRS consignment is a small gesture with a big impact, and it costs you nothing. It only takes a minute when filing your tax return to transform part of your tax into direct support for those who need it most. Even if your consigned amount is modest, the combined contributions from thousands of people can make a real difference to the survival of many vital organisations.
Source: Adobe Stock Author: Redaction As of March 2025, short-term rental (STR) owners in Portugal face a new legal obligation: informing Turismo de Portugal about the validity of their mandatory insurance policy. This measure, introduced by Decree-Law no. 76/2024 and effective since 1 November 2024, aims to modernise and clean up STR registrations, ensuring only active properties remain listed in the National Short-Term Rental Register (RNAL). How the New Procedure Works The mechanism, developed by the Agency for Administrative Modernisation (AMA) in cooperation with Turismo de Portugal, is already in place. Property owners will be notified in phases to update their insurance policy details via the Gov.pt portal. The procedure, which requires authentication with the Digital Mobile Key, is simple and designed to make annual reporting easier. While the law does not set a fixed deadline for uploading this information, failure to do so may result in the registration being suspended by the relevant local authority. Consequences and Inspections Under the new rule, local councils, along with ASAE (the Authority for Economic and Food Safety), have increased powers of inspection. In municipalities with a high number of STR registrations, local councils must decide by November whether to implement specific regulations for the sector. If an owner fails to update their insurance validity, their registration may be cancelled, effectively suspending the rental activity. It is therefore crucial that owners follow the process and meet the requirement to avoid penalties. Benefits of the Procedure Regular updates bring several benefits to the sector. Firstly, they help cleanse the RNAL database by removing inactive listings, providing a more accurate picture of the market. Secondly, the transparency enables tourists and consumers to verify that an STR complies with legal requirements, boosting confidence in the service. Lastly, the collection of up-to-date information supports public policy and regulatory decision-making, contributing to a more professional and secure industry. Support Sessions and FAQs Understanding that new rules may cause confusion, the Local Accommodation Association in Portugal (ALEP) has been holding digital meetings and informative sessions. These events aim to clarify the process, guide users on how to use the Digital Mobile Key, and explain details about civil liability insurance, which typically costs around €80 per year for a short-term rental flat. This support is vital to ensure a smooth transition and prevent technical issues. Frequently Asked Questions What does the law say? Decree-Law no. 76/2024 requires STR owners to input the expiry date of their mandatory insurance in the RNAL and update this information annually. How is the process carried out? Through an electronic system developed by AMA, owners will be notified to enter their policy details on the Gov.pt portal using Digital Mobile Key authentication. What are the consequences of non-compliance? Failing to update the insurance information may lead to registration cancellation by the local authority and the suspension of the STR. Who enforces this rule? Compliance is monitored by local councils in coordination with ASAE, which may request documentary proof of insurance at any time. The introduction of this annual insurance update marks a major step forward in regulating the short-term rental sector. By ensuring a clean and trustworthy database, the measure enhances both the safety and credibility of the industry for visitors while assisting public authorities in effective policymaking. If you are an STR owner or plan to invest in this market, it’s essential to stay alert to notifications and ensure your insurance details are always up to date on the Gov.pt portal, avoiding future issues and contributing to a more transparent and professional sector.
Source: Adobe Stock Author: Redaction Filing an IRS tax return is one of the most important tax obligations, especially for couples with dependents. How income is declared and dependents are included can have a significant impact on the amount to be paid or refunded at the end of the process. To maximise tax benefits, it is essential to understand the available options and how to choose the best strategy for each family situation. 1) Couple: Joint or Separate Taxation? 2) The Importance of Dependents in IRS 3) Strategies for Declaring Dependents 4) IRS for Couples: How to Avoid Common Mistakes 5) Deduction for Child-Related Expenses 6) When to Opt for a Separate Declaration? Couple: Joint or Separate Taxation? When filling out the IRS return , the first important decision for couples is whether to choose joint or separate taxation. For married couples or those in a civil union, joint taxation is usually more advantageous when there is a significant difference in income between both members. This allows income to be combined, applying the IRS table jointly, which can result in a lower tax burden. Separate taxation might be preferred when both partners have similar incomes or when one partner has significant deductible expenses, enabling more individualised tax management. The Importance of Dependents in IRS Including dependents in the IRS return can significantly reduce the tax bill. Dependents are those who rely financially on the taxpayer, such as minor children or adult children with financial needs. The deduction for dependents applies in both types of taxation and is a benefit for couples with children. In 2024, the deduction per dependent was set at 600 euros for each child or dependent listed in the return. For dependents with special needs, the amount can be even higher. Strategies for Declaring Dependents It is essential for couples to ensure all dependents are properly included in the return, avoiding the loss of deductions. Any change in family circumstances, such as the birth of children or a change in tax residence, should be communicated to the tax authorities. In cases of separation or divorce, it is important to determine who will be responsible for declaring the children, as only one parent can benefit from the deduction. IRS for Couples: How to Avoid Common Mistakes Couples should be aware of common mistakes, such as failing to update data on the tax portal, which can affect deductions and the completion of the return. It is also crucial to ensure that all deductible expenses, such as healthcare, education, and food, are properly included. If in doubt, it is advisable to consult an accountant or use IRS simulators. Deduction for Child-Related Expenses In addition to the dependent deduction, couples can benefit from additional deductions, such as those for education, daycare, and medical expenses. These deductions can further reduce the tax to be paid, especially for families with school or university-aged children. Couples who are renting may also benefit from a deduction for their rent, which can be advantageous for young couples with higher tax burdens due to low income. When to Opt for a Separate Declaration? Although joint taxation is generally more advantageous, there are cases where separate declarations might be more beneficial. For example, if one partner has high deductible expenses, such as healthcare or education, separate taxation may allow for more effective use of those deductions. Couples with very unequal incomes may also opt for separate taxation so that the partner with the lower income pays less tax. The choice between joint or separate taxation depends on the specific circumstances of each couple. Correctly declaring dependents and making use of deductions are essential for optimising the tax to be paid or refunded. In any case, consulting a tax professional or using IRS simulators is an effective way to ensure the return is done correctly and that all possible tax benefits are claimed.
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