Information

Information

Information

Taxable Value (Valor Patrimonial)

 
The vast majority of taxable values of properties are out of date. From the 1st of January 2004, the Local Tax Departments will be updating the values of all properties; obviously this will take a long time to carry out. However, any property which is sold after the 1st of January 2004 will be automatically revalued and the Portuguese Valuation Commissioners have advised that the new taxable values for both IMT and IMI purposes will be between 80% and 90% of the property's market value. Note: It is estimated that the annual tax applied in 2004 will be between 0.4 and 0.5% of the taxable value (but 5% for offshore).
 
Taxation

If you intend to become a resident in Portugal, advice should be taken from a local accountant. If you do not intend to become resident, there are only two taxes that will concern you, Capital Gains TAX and TAX on the rental income should you decide to let your property out. Your lawyer and, if necessary, your accountant, can advise you of your future liability to any of these taxes. Note: If you are acquiring the shares of an offshore company, care should be taken as to any past Capital Gains Tax liability that the company has accrued (25% of gain).

Wills

It is always advisable to purchasers of property that they immediately make a Will in Portugal dealing with the assets in Portugal. If this is not done, probate in the country of residence has to be taken out then transferred and translated into Portuguese. Making a Will in Portugal will reduce the expense and avoid time delays. The Portuguese Will is in addition to and not in place of your existing Will. As from the 1st January 2004 inheritance tax will be zero-rated for residents leaving assets to immediate relatives. The rates for non-residents will be very low and set off against any double taxation agreements in place with the owner's home country.

 

The information within this document should be used as a guide only. It is correct at the time of writing and is subject to change at any time. Algarve Homes assumes no responsibility for the accuracy of the content and, you should consult with your lawyer and financial advisor for professional information and advice.