Obligatory revaluation of all properties from next Jan 1st

If your property has been revalued since Jan 1st 2004 then breathe easy. If not, read the following notice from Sovereign Group's eagle-eyed Algarve team. In fact read it anyway as it is another bureaucratic nightmare in the making.

"Together with the proposed 2012 Portuguese Budget is a document proposing rectification to the 2003 general property reform.

The 2003 changes established a 10 year period to achieve a general revaluation for tax purposes of all property in Portugal. In addition the Memorandum of Understanding concerning the economic assistance promised earlier this year to Portugal by the EU and IMF established a promise that the conclusion of the general revaluation should be achieved by the end of 2012.

Thus the Government has made various alterations to the IMI Code (CIMI) in order to regulate the general revaluation of urban property including alteration to the body responsible for achieving this.

As from 01.01.2012 the old rules established to value existing property will be revoked and there will be a general revaluation of all properties that have not been revalued since 01.01.2004 and that, at 01.12.2011, are not undergoing revaluation under the CIMI scheme.

This revaluation will be led by the Finance Department (DGCI) assisted by other authorities and the local Câmaras who will be obliged to send property plans either electronically, or in paper format, to the Finances to assist with valuation. It will not be obligatory for the property to be visited to be revalued and the new values obtained will come into effect on 31.12.2012 for payment of IMI in 2013.

There will be some changes to the existing formulas used to value property and the levels of those will be established by 30.11.2011.

Notification of the new values will be made electronically where possible and by registered post where not.

There will be a period of 30 days in which an appeal can be lodged and a second valuation requested at a cost to the taxpayer of not less that €204. This second valuation must be made within 60 days of original notification of the valuation.

Sovereign comment:

Many properties that have been registered with the same title holder for many years including those held by companies could see a dramatic increase in the tax value and consequently in the municipal tax payable. In addition, the “capping” system introduced in 2003 to prevent a tax payer suffering large increase in municipal taxes payable, will no longer apply.

Whilst every effort has been made to ensure that the details contained herein are correct and up-to-date, this information does not constitute legal or other professional advice. We do not accept any responsibility, legal or otherwise, for any error or omission.