The Algarve Property Specialists

Saving on IMI: is it worth asking for a new home review?

There are owners paying too many IMI. Deco Simulator helps you do math and decide if it's worth moving forward with request.

Wednesday, 15 December 2021 - Fiscal

This article is Google Translated:

Every year property owners receive notification from the Finance to pay the Municipal Property Tax(IMI),which is charged by local authorities. A tax that, according to the Organisation for Economic Cooperation and Development (OECD), has scope to rise in Portugal. But will there be those who are paying too many IMI? Deco – Portuguese Association for Consumer Protection has a simulator that helps to do accounts and reminds that it is possible to ask the Tax Authorities for a new evaluation of the house by December 31.

"Only the simulation of the fair value of IMI can reveal whether there is scope to save next year. If that's the case, ask the Irs by December 31," Deco said, notingthat through its simulator it is possible "if a possible new assessment could guarantee savings in the tax payable".

According to the association, to ask for the new evaluation of the house over the Internet just present in finance the imi model 1 correctly completed. Request that is free and can be submitted online, through the Finance portal.

How can I save on IMI?

"Applications submitted during the year 2021 will only have an effect on the calculation of the tax payable next year. Thus, whether you submitted the application earlier this year or still do so until the last day of 2021, the calculation only changes in 2022 and in the following years", recalls Deco, explaining that the new assessment is sent in writing to the owner's tax domicile.

To calculate IMI is taken into account the Tax Asset Value (VPT) of real estate, which is automatically updated by the Finances every three years, based on the coefficients of devaluation of the currency, which always increases the value of the houses. However, deco explains, this review does not cover, for example, the vetustez coefficients (age of the property) and the location coefficients,which can lower the value of the house.

Ask for evaluation yes, but only every three years

"Only simulation allows you to determine the fair value of IMI for your property. If there is savings possible, it is worth asking the Finance for a new evaluation of the house. If you can't get savings, don't make the request, because it can dictate a tax increase payable", advises.

It should also be noted that it is only possible to allow an IMI assessment every three years. That is, the owners can only do so this year if they have not done so in the last three years.

Didn't you pay the last IMI installment? What's next?

The deadline for paying the last IMI instalment has ended on 30 November. But what happens to those who forgot to settle the tax within the expected period? What's going to happen?

According to Multinews,which consulted experts from EY, "the lack of payment of IMI within the legally fixed deadline for voluntary payment determines that late interest is settled (at the annual rate of 4.786% for 2020) and legitimizes the Tax Authority (AT) to trigger a tax enforcement process with a view to coercive collection of the missing tax".

The same publication writes that "taxpayers may request payment from TA in installments of the tax debt,the payment or the compensation of the tax debt with tax credits or other credits on the State".

It should also be noted that "there is no penalty if IMI is paid in benefits in accordance with the provisions of the law". "However, if payment in instalments is requested following the initiation of the enforcement process, the amount to be divided into instalments does not include late paymentinterest, which continues to be due in relation to the debt included in each instalment and up to the full payment of the same", concludes.