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Portugal warns couples to register, to pay less property tax

Portugal warns couples to register, to pay less property tax

LISBON: Couples who live together in Portugal are being encouraged to report such to the tax authority, to be eligible for a lower bill under the country’s new municipal property tax.

The municipal property tax (IMI) was introduced in January 2017. It is charged at a rate of 0.7 percent for properties worth more than EUR600,000 (USD715,912), with a one percent rate applying to the value of a property beyond EUR1m. A number of other rules apply.

For couples, one of the benefits of the new tax is they access an exempt threshold that is double that for individuals. Instead of the EUR600,000 allowance for individuals, couples become liable to IMI for properties valued over EUR1.2m, but they are also jointly and severally liable for the tax due.

In addition, for couples, the one percent rate is levied on the portion of the property value above EUR2m, rather than EUR1m (for individuals).

The tax authority is allowing taxpayers until the end of this month to make a declaration. The deadline had been May 31.