Municipal property tax to rise in 2011

The vast majority of municipal and local câmaras say they will charge the maximum permitted under the law for IMI property taxes next year.

From a total of 308 municipal councils, 176 have already decided the level of taxes to charge on properties and of these 106 have opted to apply a 0.7 per cent tax.

Nationwide, local authority property taxes range from 0.4 to 0.7 per cent on the value of the property.

But cash-strapped local councils with huge budgetary black holes to fill say that next year they’ll charge the maximum allowed.

On November 3, Lisbon Câmara approved the IMI taxes it intends to charge next year, maintaining a maximum tax of 0.7 per cent on buildings which have not been valued according to IMI regulations since 2004 – constituting the majority of properties in Portugal.

In was in 2004 that the PSD Government headed by Durão Barroso decided to substitute the old municipal authority property contribution (Contribuição Autárquica) with the new IMI (Imposto Municipal sobre Imóveis) tax.

In the cases of those properties that have been valued, the câmara will raise property taxes from 0.35 per cent to 0.4 per cent.

In the Diário Económico list of 176 municipal councils nationwide that had decided on the property taxes to set for 2011, not one Algarve Câmara was included, which means none had yet made a decision at the time of going to press.