IMT-Municipal Tax on Real Estate Transfer

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Tax rate

Regarding the charges for the IMT system, it was established a level of exemption for buildings used exclusively for permanent residence, corresponding to 92,407 euros. In parallel, a new predicted frame for which the maximum value is established for the permanent residence is a rate of 8%.

Sheet for calculation of IMT with a view to acquiring urban building or autonomous fraction of urban building intended to be a permanent home:

Property value
IMT rate (%) Amount to be deducted
Inferior to 92.407 euros 0 0
Superior to 92.407 Inferior to 126.403 euros 2 € 1.848,14
Superior to 126.403 Inferior to 172.348 euros 5 € 5.640,23
Superior to 172.348 Inferior to 287.213 euros 7 € 9.087,19
Superior to 287.213 Inferior to 574.323 euros 8 €11.959,32
Superior to 574.323 euros Únique rate 6%

Sheet for calculation of IMT with a view to acquiring urban building or autonomous fraction of urban building intended to be a secondary home or rental:

Property value IMT rate (%) Amount to be deducted
Inferior to 92.407 euros 1% 0
Superior to 92.407 Inferior to 126.403 euros 2% 924,07 euros
Superior to 126.403  Inferior to 172.348 euros 5% 4.716,16 euros
Superior to 172.348 Inferior to 287.213 euros 7% 8.163,12 euros
Superior to 287.213 Inferior to 550.836 euros 8% 11.035,25 euros
Superior to 550.836 euros 6%



When the value on which the tax is levied is higher than € 92.407, it shall be divided into two parts, one equal to the limit of the highest bracket therein comprised to which the average rate corresponding to such bracket applies, and the other equal to the excess amount, to which the marginal rate corresponding to the immediately higher bracket applies.

c) Acquisition of rural property – 5 per cent rate.

d) Acquisition of other urban property and other acquisition against payment – 6.5 per cent rate.

On the onerous acquisition of partial items of the ownership right there shall apply the rate referred to under the preceding sub-paragraphs according to the nature of the property in connection with the acquired right; the rate referred to under sub-paragraph a) shall only apply where the transfer of fruition, use or habitation of an urban property or an autonomous fraction thereof exclusively intended for dwelling purposes is concerned.
The rate shall always be 8 per cent if the acquirer has his domicile in a country or territory subject to a clearly more favorable tax regime.

Tax assessment and collection

The IMT assessment is incumbent upon the persons concerned, who are required to produce a tax return on an official model form, duly filed for that purpose in any finance office or by electronic means. Such tax return must also lodge with any finance office or by electronic means prior to the act or event of transfer of property, in case of exemption.
The assessment is officiously promoted by the competent tax offices whenever the persons concerned do not take the initiative within the legal deadlines, or if an additional assessment is needed, without prejudice to the compensatory interest it may give rise and to the penalty imposed.

The IMT is assessed by the DGCI central services, either officiously or on the basis of the taxable person tax return, the tax act being considered for all legal purposes as carried out at the competent tax office. In respect of alienation of an inheritance or hereditable share, as well as in case of transfer following a judicial or extrajudicial partition, the IMT assessment is always carried out by the competent tax office dealing with to the stamp duty assessment. If stamp duty is not due, the IMT assessment is carried out by the tax office where the property in question is situated.

The IMT assessment is prior to the act or event of transfer of assets/goods; however, if such transfer does not take place within two years, the tax assessment shall become null and void.

In case of real estate omitted in the register or inscribed therein without its TNW, the IMT is assessed on the amount shown in the deed or contract; if necessary, the tax assessment shall be officiously corrected as soon as the evaluation value becomes a final one, according to the provisions of the IMI Code.

Where the TNW registered in the cadastral register on which the IMT assessment was based is considered as excessive, the taxable person may apply for the valuation of the property, prior to the act or contract; if necessary, as soon as the valuation becomes definitive the assessment shall be the object of an adjustment.

The IMT must be paid on the assessment day or on the first subsequent working day; otherwise it may become null and void. However, if the transfer is operated by way of a deed or contract concluded abroad, the tax is payable during the next month. If the assets are transferred by way of bidding, judicial or administrative sale, award, transaction
or settlement, the tax is payable within thirty days counting from the signature of the competent record or judicial proceedings for ratification of the transaction.

The IMT shall be paid within thirty days counting from the notification in case of additional assessment, transit in rem judicatam in case of preferential right, from the date of the contract if the acquirer is benefiting from such goods or from the conveyance date in relation to purchasing, sale or exchange processes.
The IMT is payable at the Treasury offices or any other authorized place by way of an official collection document.


Objective and territorial scope

The IMT is levied on the transfer for consideration of ownership rights or parts thereof on real estate (immovable property) situated in the Portuguese territory, regardless of how such transfer is carried out.
The fiscal concept of «transfer» for the purposes of this tax is coincident, in principle, with that of private law, but also includes a number of situations assimilated to the conveyance or transfer of goods or rights on assets provided for by law with the purpose of preventing tax avoidance. The IMT Code also includes an exemplification listing of such situations. Thus, there shall be treated as a conveyance of assets:

a) Promise of purchase and sale upon delivery to the promisor buyer, or when this is benefiting from such goods, except in the case of acquisition of a dwelling house as a permanent home of its owner or of his household and provided that
any of the conditions laid down in Article 2 (3) of IMT Code occur;

b) Letting with a clause under which all leased goods become leaseholder’s possession
after settlement of all agreed payments;

c) Long term letting or subletting, being considered as such those lasting for more than 30 years, whether they are in force for a period of time established at the beginning of the contract or it results from a prorogation by mutual agreement of the parties concerned, even if there is a change concerning the lessor, the rent or any other contractual clause;

d) Acquisition of corporate rights or shares in a partnership, in a limited partnership or a joint-stock company, when such companies own immovable property and if by reason of such acquisition, amortization or any other event, one of the partners obtains at least 75 per cent of the capital stock, or if there are only two partners,
husband and wife, married under a joint ownership of subsequently acquired
property regime.
There shall also be considered as a transfer for consideration the granting of the following
acts or contracts:

a) Promise agreement of purchasing and sale of immovable property containing a provision under which promissory-buyer may assign his contractual position to a third party;

b) Assignment of a contractual position in the exercise of the right granted under the promise agreement as above referred to;

c) Granting of a proxy conferring the power to dispose of immovable property or corporate rights in real estate companies, where by waiving the right of repeal or a similar provision, the represented person is not entitled to revoke the proxy;

d) Granting of an instrument with sub-establishment of a proxy/power of attorney with the powers and effects provided for under the preceding sub-paragraph;

e) Assignment of a contractual position or arrangement for resale by the promissory-purchaser in a promise of sale, where the final contract is to be concluded between the promisor seller and a third party.
The granting referred to under subparagraph e) shall not apply whenever the final contract is concluded with a designated third party or with a company under incorporation at the moment the contract is entered into, that is going to purchase the real estate, provided that the promisor-buyer is the holder of the capital stock in that company.

Also subject to IMT are:

♦ The rescission, voidance or extinguishment by mutual consent of the contract of purchase and sale or exchange of immovable property, as well as the rescission, voidance or extinguishment by mutual consent of promise-agreement where, in the last-mentioned case, this event takes place 10 years after its tradition or possession;

♦ Barters or exchanges according to the declared difference in the amounts or the difference between the taxable net worth , depending on which is the higher;

♦ The excess of the proportional share in immovable property belonging to the purchaser in an allotment deed or partition of a succession, as well as the alienation of an inheritance or hereditary share;

♦ Sale or transfer of the right to certain waters, even as an authorization for exploitation or mining in any land belonging to another person;

♦ Capital contribution of immovable property by the members of a trading company or civil company under a commercial form, or a civil company recognized as a corporate entity, as well as the award of immovable property to company members upon the winding-up of those companies, and the transfer of immovable property as a result from the merger or demerger of such companies;

♦ Capital contribution of immovable property by the members of all other civil companies, for that part giving rise to community property or any other right on such property to the other company members, as well as the transfer of corporate rights or quotas, or the admission of new partners, under the same conditions;

♦ Transfer of betterment’s and acquisition of real estate by way of accession.

Personal scope

The IMT shall be due by any individual or legal person to whom the immovable property is transferred, without prejudice to the rules provided for under sub-paragraphs of Article 4 of IMT Code.

A great number of tax exemptions are provided for, namely:

♦  Acquisitions made by the State, local authorities, the Autonomous Regions and the associations and federations of municipalities of public law, as well as any of their services, establishments and bodies, even if personalized, including public institutes of a non business nature;

♦  Purchase of immovable property qualified as of public or municipal interest;

♦  Purchase of immovable property situated in economically less favored areas if carried out by commercial or civil companies under a commercial form, designed for the exercise of an agricultural or industrial activity considered as having an upper economical and social interest for such region;

♦  Public administrative legal entities and mere public legal entities, private social solidarity institutions and any persons assimilated thereto under the law with regard to property designed to the direct and immediate achievement of their statutory aims;

♦  Exemptions agreed upon between the State and any other entity of public or private law in accordance with the respective law;

♦  Purchase of property by physical education associations if designed to facilities usually not used for payable shows;

♦  Acquisition of property by museums, libraries, schools, public enterprises responsible for the public schools network, teaching or educational associations, cultural, scientific, literary or artistic, charitable or social welfare institutions or associations, if designed, directly or indirectly, to the achievement of their statutory aims;

♦  Acquisition of rural property designed for the first establishment of young farmers applying for the aids provided for under the applicable legislation, even if taking place in different moments, up to the amount of € 92.407, irrespective of the fact that the amount that would be liable to tax should exceed that limit;

♦  The Foreign Governments on the acquisition of property exclusively affected to their respective diplomatic or consular missions, or designed as the domicile of the head of such mission or consul, as well as building land, provided there is reciprocity of treatment;

♦  Acquisition of property for religious purposes carried out by religious legal persons recognized as such under the law governing the freedom of religion;

Purchase of immovable property for resale provided that a statement of start-up, change or termination of an activity, as the case may be, in respect of the activity performed by a dealer on real estate for resale has been produced previously to such acquisition;

♦  Acquisition of immovable property by financing institutions or trading companies the capital of which is directly or indirectly controlled by them, in an enforcement or prosecution proceeding brought by such institutions or any other creditor, as well as the acquisition carried out following a bankruptcy or insolvency suit, provided that, in any case, such acquisitions are meant for credits in connection with loans or guaranties;

♦  Acquisition of urban property or an autonomous fraction thereof intended exclusively for the acquisition of a permanent owner-occupied dwelling house, provided that the amount on which the tax would be levied should not exceed €92.407.

Determination of taxable amount

The IMT is levied on the amount shown in the respective deed or agreement, or on the taxable net-wealth of the real estate (TNW), depending on which is higher. In respect of real estate omitted in the register or inscribed therein without its TNW, as well as assets or rights not subject to registration, the TNW shall be determined in accordance with the IMI Code.

The TNW of real estate shall be increased by the declared amount of its parts if not included therein. However, some special rules must be taken into consideration for the determination of the taxable amount:

♦ Where any co-owner or share-owner transfers his right, the IMT shall be assessed on the corresponding part of the TNW of real estate, or shall be levied on the amount shown in the respective deed or agreement, depending on which is higher;

♦ Upon the constitution of a temporary surface right, whether the building works are finished or not, or the plantation concluded, the provisions of 2nd and 3rd rules of Art. 12 (4) of the IMT Code shall apply;

♦ Upon the exchange of immovable property, there shall be deemed to be the assessment base the difference of amounts declared if such difference is higher than the difference between both TNW;

♦Upon the conveyance by way of accord and satisfaction, the IMT shall be calculated on its TNW, or on the amount of the debt to be paid by the transferred property, if higher;

♦ Whenever a conveyance is carried out by way of a waiver or cession, the IMT shall be calculated on the TNW of the respective immovable property, or shall be levied on the amount shown in the deed or agreement, if higher;

♦ If a real estate is transferred separately from the usufruct, use or habitation, the IMT shall be calculated on the tenancy amount, in accordance with subparagraph a) of Art. 13 of the IMT Code, or on the amount shown in the deed or contract, if higher;

♦ In case of usufruct, use or habitation, as well as if any of such rights is waived, or the usufruct is transferred separately from the property, the IMT shall be assessed according to the fruition, use or habitation current value calculated in accordance with Art. 13 (b) of IMT Code, or shall be levied on the amount shown in the deed or contract, if higher;

♦ If the pensioner acquires the property charged with a pension, the IMT shall be levied on the TNW after deduction of the pension current value, or in the amount shown in the act or contract, if higher;

♦ In case of long term letting and subletting, the IMT shall be levied on the amount corresponding to 20 times the annual rent, if equal to, or higher than, the TNW of he real estate, and shall be levied on the difference between the net-wealth of the immovable property at the date of letting and that at the date of acquisition, or on the amount declared, if higher, in case the lessee should acquire the property concerned;

♦ According to the provisions of Article 2 (5) (c), in a judicial and an extrajudicial partition, the amount of real estate in excess of the acquirer proportional part is calculated on the TNW of such property increased by the value attributed to the real estate not subject to a cadastral registration or, if higher, on the amount on which the partition was based;

♦ With regard to contributions of immovable property made by members of a company for the capital of such company, the value of such immovable property is the TNW or the value shown in the company assets, depending on which is higher;

♦ In relation to mergers and demergers, the IMT is levied on the TNW of all immovable property belonging to merged or demerged companies that is transferred to the fixed assets of those companies resulting from a merger or demerger, or on the amount shown in the fixed assets of the companies, if higher;

♦ The value of the immovable property or of the surface right established on leased real estate purchased by the lessee by way of a contract of sale, upon the expiration of the leasing agreement, and under the conditions agreed upon, shall be the residual value as determined or determinable under the contract;

♦ The value of property expropriated for public interest reasons shall be the value corresponding to the indemnity amount, unless such indemnity is established by way of an agreement or transaction, in which case the general rules shall apply.

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