Municipal Property Transfer Tax (IMT)

Municipal Property Transfer Tax

• 1. Tax basis

  IMT is levied on the transfer for consideration of real estate located in the Portuguese territory. Such transfers may also be subject to Stamp Tax.
  
  IMT is due by the purchaser and levied on the purchase price or on the VVPT, whichever is higher.
  IMT extends the taxable basis to several types of legal acts which grant an economic result similar to the transfer of the ownership over a real estate, such as:
  
  - The assignment of promissory agreements ensued by the utilization of the property;
  
  - Lease agreements for more than 30 years;
  
  - The acquisition of 75% or more of the share capital of a company owning real estate located in Portugal, if certain conditions are met;
  
  - The assignment of promissory agreements which contains clauses under the terms of which the purchaser may transfer his contractual position to third parties;
  
  - The assignment of contractual position by the purchaser in promissory agreements;
  
  - Irrevocable power of attorneys granted by the promissory purchaser to third parties.

• 2. Rates

  Rates depending on the type of building:
  
  - Rural property - 5%;
  
  - Urban property used for purposes other than residential and other acquisitions - 6.5%;
  
  - Urban and rural property acquired by a resident in a blacklisted jurisdiction - 10%;
  
  Urban property or autonomous fraction of urban property exclusively intended to permanent place of residence:
  
  

  Value (€)	Marginal Rate (%)	Average Rate (%)
  Up to 104,261	0	0
  + 104,261 up to 142,618	2	0.5379
  + 142,618 up to 194,458	5	1.7274
  + 194,458 up to 324,058	7	3.8361
  + 324,058 up to 648,022	8	-
  + 648,022 up to 1,128,287	6 (single rate)
  Above 1,128,287	7.5 (single rate)

  
  Urban property or autonomous fraction of urban property exclusively intended to residence non-permanent:
  
  

  Value (€)	Marginal Rate (%)	Average Rate (%)
  Up to 104,261	1	1.26890
  + 104,261 up to 142,618	2	1.2689
  + 142,618 up to 194,458	5	2.2636
  + 194,458 up to 324,058	7	4.1578
  + 324,058 up to 621,501	8	-
  + 621,501 up to 1,128,287	6 (single rate)
  Above 1,128,287	7.5 (single rate)

• 3. Payment

  IMT is assessed by the central tax services based on the information filed by the taxpayer, in a local tax service or by internet. It should be assessed before the transfer.
  
  IMT must be paid when the tax is assessed or in the following business day. It is valid for 2 years. Whenever the transfer is executed by an agreement signed outside the Portuguese territory, IMT should be paid during the following month. When an exemption lapses, taxpayer must request IMI’s assessment in the following 30 days to the local tax services of the property and must pay the tax in the same deadline.

• 4. Exemptions

  There is a list of exemptions that includes, amongst others:
  
  

  4.1 Urban property subject to rehabilitation
  
  

  An IMT exemption is applicable to urban properties whenever the rehabilitation of the building begins within three years from the acquisition date.
  
  

  An additional IMT exemption is also foreseen for the first acquisition of an urban property following its rehabilitation, to be exclusively used as a place of residence, when located in a special urban rehabilitation zone.
  
  

  4.2  Buildings acquired for resale
  
  

  Acquisitions of urban or rustic buildings for resale are exempt from IMT, provided that:
  
  

  - The purchaser normally and habitually carries out the activity of buying and reselling real estate;
  
  

  - The competent declaration of intent is presented in the deed and confirmed in the PIT or CIT;
  
  

  - Resale takes place within 1 year.
  
  

  4.3  Restructuring operations (such as mergers and demergers)
  
  

  Restructuring operations based in sound economic reasons may benefit from an exemption from IMT, Stamp Tax and legal fees.
  
  

  4.4  Other exemptions
  
  

  - Acquisition of buildings individually classified as of national/public/ municipal interest;
  
  

  - Buildings acquired by credit institutions or commercial companies whose capital is directly or indirectly controlled by them, in enforcement proceedings, as well as bankruptcy/insolvency;
  
  

  - Buildings located in the areas of business location, provided that they are allocated to eligible economic activities.