How to calculate the IMI and the Tax Asset Value of the Property

Tax Equity Value VPT of the Property - Calculate

The Tax Asset Value (VPT) is the administrative value of the property determined by the Tax Authority (AT). In order to evaluate the Municipal Property Tax (IMI) it is necessary to first know how to calculate the Property Tax Asset Value. Next, this value must be multiplied by the tax rate applicable in the respective Municipality. So, let's get to know the parameters that go into the calculation of the VPT, such as the location coefficient, the aging coefficient and the elements of quality and comfort, among others. We will see, then, if it is possible to pay less IMI.

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How to Calculate the Tax Asset Value of the Property - VPT

To find out the VPT of your property, consult the Land Registry, in the reference “Data and Evaluation”.

The VPT is calculated differently for urban buildings and for rural buildings. The VPT for urban buildings is calculated as follows:

Calculate VPT = VC x A x Ca x Cl x Cq x Cv

on what:

VPT = property tax value of the property;

VC = base value of built buildings;

This value is fixed annually by Ordinance and corresponds to the average value of construction per square meter, to which is added the value of the square meter of the implantation land, which corresponds to 25% of the first.

This ordinance sets the average construction value per square meter, for the purposes of article 39 of the Municipal Property Tax Code

For example, if the average value of construction per square meter fixed by the aforementioned Ordinance is €500, the value of the square meter of the implantation land will be 25% of €500, that is, €125.

Adding the values ​​together, we arrive at €625, which will therefore be the base value of the built-up buildings (VC).

This value applies to all urban buildings.

A = gross construction area plus the area exceeding the implantation area;

This coefficient results from the following calculation:

A = (Aa + Ab) x Caj + Ac + Ad

Being that:

Aa = gross private area

Ab = dependent gross areas

Caj = area adjustment coefficient

There is a Table on the Tax Authority Portal with the Values ​​of the Adjustment Coefficient, for residential buildings.

Ac = area of ​​free land up to the limit of twice the area of ​​implantation

Ad = area of ​​free land that exceeds the limit of twice the area of ​​implantation

Ca = coefficient of affectation

It depends on the type of use, if housing the coefficient is equal to 1.

Cl = location coefficient

It can be obtained through the Simulator on the Finance Portal, with the Geographic Information System of the Municipal Property Tax – SIGIMI.

Access a map with the location coefficient of all areas in Portugal.

Example:

Insert the desired address or location in the search area. For example, Rua de São Marçal in Lisbon.

Simulate Tax Asset Value VPT Property Satellite View
Simulate Tax Asset Value VPT Property Satellite View

You have the option to identify the area with the street or satellite view, which is now presented.

Then you can zoom by clicking the “+” or “-“ button.

Click with the mouse on the building you want to know the location coefficient and to mark a blue dot. Hover your mouse over this blue dot to see the location coefficient (under “housing”, if the property is a house).

In this example, the location coefficient is 2,8.

Clicking on “simulate” allows you to find out which values ​​are used to calculate the taxable equity value of the property.

We will see a simulation example later.

Cq = quality and comfort coefficient

This coefficient has increasing and decreasing factors, as shown in the following table.

You can also see which one is considered in the simulator which, in the case in question, indicates an increase coefficient of 0,13.

Table - Elements of Quality and Comfort
Table - Elements of Quality and Comfort

Cv = age coefficient

It is calculated considering the number of years since the date of issue of the license to use, if any, or the date of completion of the construction works.

Old age coefficient table
Old age coefficient table

You can check for updates at old age coefficient  or consult the Municipal Property Tax Code – IMI.

Municipal Property Tax - IMI

The formula is simple:

IMI = Municipality IMI rate x Tax Asset Value (VPT)

IMI fee

The Municipal Property Tax rate of the Municipality in which the property is built - the Municipal IMI rates and how the IMI is calculated, can be consulted on the Finance Portal.

Let's take an example:

The Municipalities of the District of Lisbon are shown below.

2021 IMI rates, by Municipality, District of Lisbon
2021 IMI rates, by Municipality, District of Lisbon

Cascais has an IMI rate of 0,34% and Amadora has a rate of 0,30%. This rate is important to calculate the IMI.

Example:

Suppose you own a building, with a Property Tax Value (VPT) of 135.000 euros, located in Amadora. The IMI rate applied in 2021 (relative to the 2020 tax) is 0,30%.

In this case, the amount of IMI payable for the year 2021 will be 0,30% x €135.000 = €405.

What can you do to pay less IMI

Every three years, AT updates the VPT based on currency devaluation coefficients.

It may happen that some of the factors that go into the calculation of the VPT change over the years.

This is the case of the aging coefficient, which depends on the age of the property. Over time, the property depreciates and the aging coefficient serves precisely to take this factor into account.

If the age coefficient is not updated, you will continue to pay your IMI as if the property was new, when in fact it has been in existence for several years.

It is necessary to have the land register to be able to simulate the VPT and understand if the IMI is well calculated or if you are having an excessive charge and, in this case, you may pay less IMI.

Example:

Let's simulate the Tax Asset Value of the property located at Rua de S. Marçal, Lisbon, Parish of Misericórdia.

Searching for the street name, the map appears. We can switch to satellite or street view, which is now displayed.

Simulate Tax Asset Value VPT Property
Simulate Tax Asset Value VPT Property

Once the street has been found, which appears with a blue dot, we can even click on the building for which we want to determine the taxable equity value of the property.

Relatively close streets have different coefficients of location.

The box shown shows the value of the location coefficient for housing is 2,8.

It remains now to click on the “simulation” (arrow to the right) to start the process to calculate the Property Tax Asset Value VPT.

Fill in the various fields with the information contained in the building book.

Let's assume that it is a fraction of a building in horizontal ownership and that the building is 110 years old.

The private gross area of ​​the fraction is 80 m2, the area of ​​land that is part of the fraction and fractions and the gross area dependent on the fraction is 0,00 m2

The permil is 140.

The building's implantation area is 182,50 m2 and the total land area is 197,5 m2.

Simulation of the Tax Asset Value of the Property
Simulation of the Tax Asset Value of the Property

In the end, the result of the simulation of the Property Tax Asset Value is available and is a first step to calculate the IMI and verify if you will be able to pay less IMI.

Result Simulation Tax Asset Value VPT Property
Result Simulation Tax Asset Value VPT Property

In this example the calculated value is €57.390.

You can try other simulations and analyze the impact on the property's VPT and, consequently, on IMI. For example, the coefficients of quality and comfort, if possible. By simulating some alternatives, you will see if it is possible to pay less IMI.

How to request a revaluation of IMI

If the result of the simulation is lower, it may justify making a request for a revaluation of the Tax Asset Value of the Property to the Finance Service (AT) and paying less IMI. You can do it every three years, free of charge.

If so, you may know how to do the IMI revaluation request because, after calculating the IMI, you only have to fill in the Model 1 of the IMI and keep in mind that the request for reassessment must be made by December 31st.

Finally, wait for the AT to meet you and pay less IMI.

In the case of selling the house, it is necessary to know how to calculate capital gains on real estate.

See also other features

Download IMI Code

Download the Municipal Property Tax Code, IMI, Version dated 14-6-2021.
FREE DOWNLOAD

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