Is council tax / IMI applicable for land only?

[sarah.s]

Hello friends,
My husband and I are happily soon to be buying a small plot of land with no building or building permission, for a yurt and adventurous living!
I've read that we can apply for exemption from council tax / IMI for the first 8 years but to do that may mean an extra trip to Portugal before the big move. Is IMI applicable for residential buildings only or do you still have to pay this tax if you just have land?
As much as we love spending time in Portugal one less trip would be helpful at the moment!

Thank you for any feedback you have on this.

Sarah

[Little Missy]

Hi Sarah,
Hope your adventure goes well! IMI is payable on land as well as buildings, but usually at very low levels.
Hope this helps,
Little Missy

[omostra06]

if you plan to live in a yurt, then dont go to the council to tell them, and ask for exception from council tax, all you will do is alert them to the fact that you are living on land that has no habitation status,
you will have to pay tax each year on your land.
when you buy the land there is also 5% to pay imt tax.

[sarah.s]

Thanks so much for your helpful advice, I'll re-instruct lawyer before completion. Great to get good feedback. All the best.

[sarah.s]

Big thanks for your helpful advice and well wishes

[John999]

PURCHASE TAX (IMPOSTO MUNICIPAL - IMT)

You must pay the purchase tax, (IMT), before you complete the sale. Purchase Tax for plots of land are 5% for ORDINARY LAND, 6.5% for BUILDING LAND. IMT on other properties is on a sliding scale based on the value of the property.

IMI - (Imposto Municipal de Imoveis)

This is a Municipal Tax levied on the taxable estate value on all properties located in Portuguese Territory. The Taxable Person is the named owner of the property, as on the 31st of December of the year in which the tax is related.



TAX

Rustic and Agricultural lands: Pay flat rate of 5% IMT Tax

When Buyer is an Offshore Company, Tax to be paid is flat rate of 15%

The IMI Rates are calculated on the following basis:

For Rural properties 0.8%

For Urban properties betweeen 0.5% (variable from council to council, annual review)

As a First Time Buyer in Portugal, you are allowed a few years of Council Tax Exemption, depending of your local Council and Price of the Property.

Check with your Solicitor

Property Value
Percentage Applied
Value Deducted

Up to €85.500,00
1%
€0,00

€85.500,00 until € 117.200,00
2%
€855,00

€117.200,00 until € 266.400,00
5%
€4.370,00

€159.800,00 until € 266.400,00
7%
€7.567,01

€266.400,00 until € 511.000,00
8%
€10.231,09

Superior to €511.000,00
6%
€0,00






ALL OF THE ABOVE INFORMATION IS FOR USE AS A GUIDE ONLY.

CHECK ALL DETAILS WITH YOUR SOLICITOR

[omostra06]

Some of the imt values in Johns post are a little out of date, the new values came in on Jan 09, as John says check everything yourself anyway.

[John999]

Thanks for that omostra, now we all know exactly what IMI we are paying when purchasing a property. I wasn´t trying to take from you your popularity regarding the advice you give to the expats, about buying in Portugal. The reality is that the IMI Portuguese TAX has 53 different guide lines, and they change from council to council. My advice is, hire a local solicitor because a lawyer will cost you more than the double of the general price. In general a lawyer will hire a solicitor to do the job, and then, he will put his fees on the top of your bill. Get advice from the locals. You know the fraise; In Rome be a Roman.
regards
Jhon999

[omostra06]

Originally Posted by John999

Thanks for that omostra, now we all know exactly what IMI we are paying when purchasing a property. I wasn´t trying to take from you your popularity regarding the advice you give to the expats, about buying in Portugal. The reality is that the IMI Portuguese TAX has 53 different guide lines, and they change from council to council. My advice is, hire a local solicitor because a lawyer will cost you more than the double of the general price. In general a lawyer will hire a solicitor to do the job, and then, he will put his fees on the top of your bill. Get advice from the locals. You know the fraise; In Rome be a Roman.
regards
Jhon999

John everyone is welcome to offer advice, we all have different experiances here.

IMI can be viewed as council tax, paid once or twice per year.
When purchasing a property the tax you pay is IMT.

Both of these taxes can be worked out exactly. IMT is on a sliding scale % with allowances. easy to work out yourself. IMI can be easily worked out by going to the finances or asking the owner how much they pay each year. no need to hire a lawyer or solicitor to help with working out tax, your agent if you use one can also help get these figures for you.

The cost to retain a Lawyer to purchase a house in our region is around 500 to 600 euros. i guess a solicitor will be less, but i have no experiance of what they charge as most people we have come into contact with use a Lawyer.
legally in Portugal you can buy a house without the services of a Lawyer or Solicitor, very few locals would spend money on a lawyer or solicitor to buy a house, but anyone not from Portugal, I would always advise using a lawyer to help with the purchase of a house here, regardless of using a estate agents or buying private.

[John999]

Thank you, Omostra. I am glad that in your area solicitor fees seem to be a lot cheaper then on Silver Coast, because the fees that the expats who moved over here paid to lawyers or solicitors vary between the hundreds and thousands. Give you two examples. A family moved near us and they hired one of the most known, English speaking lawyers, From Caldas da Rainha. They bought a piece of land with a project approved. They have been here for over two years, and they haven’t yet complete the deal, the escritura hasn´t been made yet, but they already had 3 different bills to pay from the lawyer. A family moved over here a few months ago and they bought a piece of land also; the deal included a project approved by the council for a house. The wife goes to the same ladies club where my wife goes to, so I end over getting involved with them, (I have been doing some pro-bono work with the expat community on Silver Coast), found them a solicitor near the property area to help them with all the process. The solicitor offered to attend the escritura, she wasn´t involved in that process, she is producing a legal contract between them and the builder they hired to build the new house, to make sure the builder will be penalized if he don´t respect the construction time agreed, she will be doing the property registry when finished, residence orders, water, gas and electric contracts, police house number, (not urbanized), and also sorting their council tax exemption for the property, around 8 years in that council. Total fees, all included, under a 1000.00 Euros
John999