Back

The trend of increasing taxes on real estate continues, as has been the case for several years.

 

IMT – Increase of the maximum rate

The SB proposal foresees a new maximum IMT rate of 7.5% levied on the purchase of residential urban buildings or housing units of residential urban buildings for a price higher than EUR 1,000,000.

The previous maximum 6% rate now applies to properties intended exclusively for owner-occupied and permanent housing with a purchase price of between EUR 574,323 and EUR 1,000,000 and to exclusively residential buildings with a purchase price of between EUR 550,836 and EUR 1,000,000.

 

IMT – Expiry of exemption on purchases by credit institutions

According to the SB Proposal, credit institutions will no longer benefit from the IMT exemption applicable to the acquisition of real estate in execution, bankruptcy or insolvency proceedings, or when they are intended for the realization of credit claims resulting from loans made or guarantees provided, whenever these are sold to a related party, pursuant to the IRC Code.

To date, the IMT exemption would only expire if the properties were not sold within five years from their purchase date.

 

IMI – Disclosure of vacant buildings

According to the SB Proposal, City Halls must disclose the identification of any buildings or housing units deemed vacant, of ruins and of "building plots in urban land qualifying as fit for residential use in a municipal land use plan" on their official websites, sent annually to the tax authority.

 

IMI – Increased rate in "urban pressure zones"


Decree-Law 67/2019, of 21 May 2019, which comes into force on 1 January 2020, levies six times the IMI rate, increased by a further 10% in every subsequent year, capped at 12 times the IMI rate foreseen for urban buildings, on urban buildings or housing units located in "urban pressure zones" and which have been vacant for more than two years.

The SB Proposal extends the IMI rate increase to ruins and "building plots in urban land qualifying as fit for residential use in a municipal land use plan ".

 

EBF - Urban Rehabilitation

Within the scope of the urban rehabilitation framework set out in Article 71 of the EBF, the SB Proposal considers that the concept of rehabilitation is fulfilled if the upkeep of the property is at least "good" as a result of works carried out in the previous four years and provided that the other requirements of the framework are also met.

Currently, only works carried out in the two previous years are eligible.

This change is relevant for the application of the 5% IRS rate to property income earned in the lease of rehabilitated real property, to the extent that it increases the period to take advantage of the benefit.