Who is entitled to IMI exemption?

The first installment of the Municipal Property Tax (IMI) is due in May. If you own a property, you've probably already been notified to pay this tax.  
IMI is levied annually and is calculated on the basis of the property's asset value as well as its location - within minimum and maximum limits, it is the City Council that sets the IMI rate to be applied.

However, there are situations that exempt taxpayers from paying IMI. There are two types of exemption: permanent and temporary. In both cases, the exemption depends on the household's income and the property's taxable value (VPT). But there are differences.


Permanent exemption

Permanent exemption from paying IMI is granted to low-income households. According to article 11A of the IMI Code, in order to benefit from this exemption, the total gross income of the household must be less than 2.3 times the annual value of the Social Support Index (IAS). In addition, it is also a requirement that the property's VPT does not exceed 10 times the annual value of the IAS.

Although the IAS was set at 438.81 euros in 2020, this is not the value used for IMI purposes. The IMI Code establishes that the value of the IAS considered corresponds to the value of the guaranteed minimum monthly wage in force in 2010, i.e. 474 euros.

"Until the value of the social support index (IAS) reaches the value of the guaranteed minimum monthly wage in force in 2010, the latter value will continue to apply for the purposes of the indexation provided for in article 11-A of the Municipal Property Tax Code," we read.

Thus, in order to benefit from permanent exemption, the household's gross income must not exceed 15,295 euros (2.3 x 475 x 14 months).

In addition to this requirement, the property's VPT must not exceed 66,500 euros (10 x 475 x 14 months).

In other words, households whose gross income did not exceed 15,295 euros in the previous year and whose property value is less than 66,500 euros have a permanent exemption.


Temporary exemption

The temporary exemption is granted for three years to families who purchase a property for their own permanent residence. However, according to Article 46 of the Tax Benefits Statute, in order to benefit from this exemption, the property's asset value must not exceed 125,000 euros.

According to the legislation, the temporary exemption from IMI is also granted to owners of properties that have been “built, extended, improved or acquired for a consideration, for their own permanent residence”. In this case too, the VPT of the property cannot exceed 125 thousand euros.





Source: doutorfinancas