The Old Age Coefficient for the purposes of calculating the IMI, Municipal Property Tax, is the factor that can make you pay less tax, as it is directly related to the age of the property. The older the property, the smaller this parameter and, as we will see, it lowers the IMI, if the other parameters are maintained.
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Tax Equity Value - VPT of the Property
To find out the VPT of your property, consult the Land Registry, in the reference “Data and Evaluation”.
O Tax Equity Value - VPT of a Property is calculated differently for urban buildings and for rural buildings.
The VPT for urban buildings is calculated as follows:
Tax Equity Value (VPT) = VC x A x Ca x Cl x Cq x Cv
VPT = Taxable asset value of the property;
VC = Base value of built buildings;
A = Gross construction area plus the area exceeding the implantation area;
Ca = Coefficient of affectation
Cl = Location coefficient
Cq = Quality and comfort coefficient
Cv = Old age coefficient
How is the old age coefficient calculated?
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.
At the time of publication of this article, the values to be considered are those in the following table:
However, to have updated values you can go to the website of Electronic Republic Gazette review updated legislation.
In the Municipal Property Tax Code, Chapter VI, Section II, Article 44 – Old age coefficient, it is determined that:
1 – The aging coefficient (Cv) is a function of the whole number of years that have elapsed since the date of issue of the use permit, if any, or the date of completion of the building works, in accordance with this table (see previous table).
Thus, the older the property, the lower the coefficient and, from the age of 60, the factor becomes fixed.
Updates from the Tax Authority – AT
Every three years the 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 old age coefficient is not updated, you will continue to pay your IMI as if the property was like new, when in fact it has been in existence for several years.
You need to have the land book to be able to simulate the VPT and understand if your IMI is well calculated or if you are being overcharged and, in this case, you may pay less IMI.
Review the aging coefficient that is in the “Data and Evaluation” of the building book, do the simulation and, if it makes sense, learn how you can do the IMI revaluation request.
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