# Property evaluations: your VPT in 2019

The VPT of your property is not directly related to construction costs or its market value (except for the soon-to-be-overhauled location coefficient).
The property evaluation system (Valor Patrimonial Tributário, or VPT) is a mathematical formula comprised of six factors, working as follows:

VPT =
Vc x A x Ca x Cl x Cq x Cv
Factor nº1: Vc – the deemed value per m²

After several years without change, this value rises to €615 in 2019.

Factor nº2: A – constructed area and implantation
The property areas (A) are a function of the presumed cost base of the constructed area and implantation. From the current area value of €615, the specific values are determined as shown on table 1.
To calculate this factor, add the different areas, previously multiplied by the above coefficients, then multiply by the cost per m² (€615).
Next, this base is altered by the following coefficients.

Factor nº 3: Ca – type of usage (0.08 – 1.2)
The next factor is usage (residential, commercial, industrial, agricultural), each having been assigned coefficients. For residential usage, the coefficient is 1.0.

Factor nº 4: Cl – location (0.3 – 3.0)
The tax authority has plans to recalculate the location coefficient (CL) of immovable properties. The reform targets updates at 85% of average property prices in a given area. The new localisation component should be approved by December and come into effect in January 2020.

Factor nº 5: Cq – quality of construction (0.5 – 1.7)
This component works in opposing directions: attractive features, such as a swimming pool or central air conditioning, push up the value of your home. Living on a dirt track, as opposed to a tarmac road, diminishes the appraisal. See table 2.

Factor nº 6: Cv – age of construction (0.4 – 1.0)
Finally, the last coefficient is applied according to the year of construction, ranging from 1.0 for new property and 0.4 for buildings over 80 years old.

By Dennis Swing Greene
|| [email protected]

Dennis Swing Greene is Chairman and International Tax Consultant for euroFINESCO s.a.
www.eurofinesco.com