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.

  - 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

  Applicable rates are the following:
  
  - Rural property - 5%;
  
  - Urban property exclusively used as a permanent place of residence:
  
  

  IMT Taxable amount	Rate
  		Marginal rate	Deductible amount  (€)
  0 - €92.407	0%	0
  > €92.407 a €126.403	2%	1.848,14
  > €126.403 a €172.348	5%	5.640,23
  > €172.348 a €287.213	7%	9.087,19
  > €287.213 a €550.323	8%	11.959,32
  > €550.323 a €1.000.000	6% (fixed rate)
  > €1.000.000	7,5% (fixed rate)

  
  - Urban property exclusively used for residential purposes:
  
  

  IMT Taxable amount	Rate
  		Marginal rate	Deductible amount  (€)
  0 - €92.407	1%	0
  > €92.407 a €126.403	2%	924,07
  > €126.403 a €172.348	5%	4.716,16
  > €172.348 a €287.213	7%	8.163,12
  > €287.213 a €550.836	8%	11.035,25
  > €550.836 a €1.000.000	6% (flat rate)
  > €1.000.000	7,5% (fixed rate)

  
  - 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%.

• 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

  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. Rehabilitation should be certified by the municipality by the end of the works (or by the Residence and Urban Rehabilitation Institute, when applicable). Such municipality must communicate to the respective local service the exemption within 60 days. In the following 15 days, the local tax service must cancel previous tax assessment and refund the IMT paid.
  
  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. The beginning and the conclusion of the construction works must be certificated by the municipality. The exemption and relevant conditions are approved by the municipal assembly.
  
  4.2 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.
  
  4.3 Other exemptions
  
  - Acquisition of properties for resale by real estate companies;
  - Acquisition of buildings individually classified as of national/public/ municipal interest.