To buy in Portugal or go back to Australia???

[anapedrosa]

Might be worth considering that next year the new property taxes start to take effect. I believe this will place more downward pressure on the Portuguese real estate market, as people with second properties evaluate the additional cost of maintaining that property.

In terms of the currency and exchange rates, I've been watching closely the CAD/EUR pair and continue to put off any bulk purchase of the Euro, choosing instead to buy only when I need the Euros to place towards our property and build. My belief is that the Euro will not appreciate significantly within the next year, there is still too much uncertainty in the market. We may see small jumps along the way, but I believe that is it (please note - my belief, I am not an expert). Personally, I am more comfortable holding my funds in Canadian banks until needed, I suspect I would feel the same way about UK banks (meaning I would keep in the UK until needed versus PT).

[danlondonuk]

Originally Posted by anapedrosa

Might be worth considering that next year the new property taxes start to take effect. I believe this will place more downward pressure on the Portuguese real estate market, as people with second properties evaluate the additional cost of maintaining that property.

In terms of the currency and exchange rates, I've been watching closely the CAD/EUR pair and continue to put off any bulk purchase of the Euro, choosing instead to buy only when I need the Euros to place towards our property and build. My belief is that the Euro will not appreciate significantly within the next year, there is still too much uncertainty in the market. We may see small jumps along the way, but I believe that is it (please note - my belief, I am not an expert). Personally, I am more comfortable holding my funds in Canadian banks until needed, I suspect I would feel the same way about UK banks (meaning I would keep in the UK until needed versus PT).

What are the "new" Portugese property taxes and when I. 2013 will they kick in ?

[canoeman]

Not new as such, more alteration to existing taxes, some have already kicked in I've added a few notes in italics

IMI(Rates) / IMT(one off tax paid on purchase by buyer calculated in bands)
Reduces the period of exemption from IMI (Rates), even for those who already enjoy 4 or 8 years.
Increasing rates of IMI, especially for vacancy.(this is one that will affect non-residents & 2nd-3rd homes)
Reducing the value of IMT.(this is a good one for buyer)
Increase in taxable value of property, especially those prior to 2004, bringing the tax value to market value.(property is currently revalued when sold what they have done now is to revalue any property that has not been sold so current owners will pay more IMI)

[anapedrosa]

Originally Posted by canoeman

Increase in taxable value of property, especially those prior to 2004, bringing the tax value to market value.(property is currently revalued when sold what they have done now is to revalue any property that has not been sold so current owners will pay more IMI)

This is the bit I was referring to. Many people in Portugal pay incredibly low property taxes and there are estimates that these taxes could increase by up to 700% in some cases. An example, based on a couple I know. They have a seaside property in the Algarve and an apartment in Lisbon, the total annual property taxes that they pay is currently less than 300 euro for the two properties. The total property assessed values (pre-2004) are around 60,000, even in today's market I suspect the new value will be closer to 600,000 for the two properties.

The Portuguese government has directed that all property assessments be updated to market value by the end of 2012 with new tax rates to take affect in 2013. The couple in the example have not yet been given their new assessment. There will be some exceptions to the requirement to pay the new rate (e.g. low income), but I believe that there will be a shock when new bills are first received.

This is also something to consider when you are buying a property, when you are shown the assessed value, check the date of the valuation. The sale will trigger a reassessment as Canoeman mentioned.

[canoeman]

IMI is calculated on the Patrimonial value not the market value, worked to a formula, believe there are Gov set differences for regions, cities etc but our patrimonial value is 69,090€ our market value is or should be 275,000€

Portuguese IMI (rates) are still incredibly low by other countries standards, our rates revalued 2009 without the current exemption for 3.500m2 land and a 3 double bed roomed bungalow with a 100m2 basement are only 207€ a friend nearby with a more rustic house 2+1 and about 2000m2 land revalued 2006 68€. but any increases will be a shock.

Any IMI Exemptions are only for a Resident and must be claimed, so make certain it's been done

[anapedrosa]

Originally Posted by canoeman

IMI is calculated on the Patrimonial value not the market value, worked to a formula, believe there are Gov set differences for regions, cities etc but our patrimonial value is 69,090€ our market value is or should be 275,000€

I had assumed that the Patrimonial value was linked to the market value. Our 2000 sq metre lot (no house yet) is valued at 223643€ (2009) with taxes at 693€ and we expect this to double once our house is built - a 3 bedroom ~220 square metres.
We are near the coast and the land is Urbana, but that is quite a difference from your assessment. But as your assessment was also done in 2009, it may be that the tax shocks may not be as great as I was presuming it would be.

[canoeman]

If you'd really like to get into it download http://info.portaldasfinancas.gov.pt...System_CEF.pdf

IMI is covered Page 105 and Urban property P110 > once you get your head around the definitions like Aa ist's not to bad to understand

This publication is a very good basic guide to the Portuguese Tax system and how it works, but it is not up to date on rates or changes to allowances, IMI exemptions etc etc which need to be checked against current year.

You should have received a Patrimonial Provisional it's normally part and parcel of registration with Financas after you've completed Escritura

[anapedrosa]

Originally Posted by canoeman

You should have received a Patrimonial Provisional it's normally part and parcel of registration with Financas after you've completed Escritura

Thanks for the link.

I received the Caderneta Urbana which includes the Patrimonial Actual (not sure what you mean by the Provisional). More specifically, we did receive our first tax bill this year, and though it appears high for PT, it's still much less than we pay in Canada (even when we have a house, we expect the taxes to be 2/3 of our current property taxes for a similar value property/home).

I should add - similar value does not equate to similar quality of life

[canoeman]

Maybe because where physically here, but we get IPM004 for the revaluation, a work sheet, with all co-efficients entered, a Provisional Draft then the Patrimondial actual value on the Caderneta

[anapedrosa]

Originally Posted by canoeman

Maybe because where physically here, but we get IPM004 for the revaluation, a work sheet, with all co-efficients entered, a Provisional Draft then the Patrimondial actual value on the Caderneta

I'll keep my eye out for that, we haven't received that yet.