Over a two-year period, the value of the tax benefit in terms of Municipal Tax on Onerous Transfers of Real Estate (IMT) granted to buildings for resale more than doubled between 2016 and 2018, exceeding €268 million. In 2018, the municipality of Lisbon accounted for nearly 40% of these exemptions, followed by the municipality of Porto. Four Apollo subsidiaries are among the top eight companies that obtained the most benefits in terms of value.
The Customs and Tax Administration (AT) exempts all transactions declared for resale within a certain period from paying tax on onerous transactions. In other words, when the transfer of ownership of the property is made through a purchase and sale agreement within three years of acquisition.
According to official data collected by the newspaper on the Customs and Tax Administration (AT) website, in 2016 the value of tax exemptions granted under Article 7 of the IMT Code (CIMT) was €120.9 million. In 2017, the tax benefit granted grew by 47%, reaching €177.9 million. And in 2018, that figure shot up again by more than 50%, reaching €268 million.
The amount of IMT exemption on the resale of properties was, in 2018, €104 million in the municipality of Lisbon (38.4%), with Porto occupying second place in this ranking - with a weight of 6.6% and tax benefits of €17.8 million, according to data accessed by the newspaper through a response given by the Finance Ministry to the Left Bloc parliamentary group.
The four subsidiaries created by Apollo to park the 271 properties it acquired (Neptunecategory, Fragrantstrategy, Meritpanorama, and NotableFrequency) are among the top eight business entities that obtained the most benefits, in value, in 2018, as Público also writes.
The exemption is a category of tax benefits assumed as an exceptional measure, taking into account extra-fiscal public interests. In other words, it is granted when it is more advantageous for the public treasury not to collect this tax than to tax it, explains Público, noting that, by law, the exemption is automatically recognized by the finance system - and if the property is not resold within that period, the owner will have to pay the respective tax.
Source: idealistanews