benefit from exemption from IMI, that is, not having to pay this tax, is a great help if the family budget is not comfortable. However, not all families and properties are entitled to this exception.
Anyone who owns a home knows that in May, August and November it’s time to save a slice of the family budget to pay for the Municipal Property Tax (IMI). Depending on the amount, this payment can be made in two or three installments.
The IMI is calculated based on the Tax Asset Value (VPT) of the property – which may differ from the market value.
The revenue from this tax goes to the municipality where the rural or urban building is located and, therefore, the IMI rate also varies depending on the municipality.
On the other hand, chambers may determine a reduction in the IMI rate based on the composition of the owner’s household. The deduction will be higher in the case of larger families.
Who can benefit from the IMI exemption?
With regard to individuals, the exemption from IMI is based on two assumptions: low asset value of the property and low-income households.
Thus, the first condition for receiving exemption from IMI is that the property in question is destined to own and permanent housing of the owner or his household.
And, for the purposes of this tax, it is understood that this is the property “in which the respective tax domicile is fixed”.
There are still two types of exemption from IMI: the permanent and the temporary exemption. Both depend on the household income and the Tax Asset Value (VPT) of the property. The temporary exemption, however, only applies for a maximum period of three years.
Requirements to be exempt from permanent IMI
The total gross income of the household cannot exceed 2.3 times the annual amount of the IAS. However, and despite the Social Support Index being, in 2022, €443.20, the reference value for IMI accounts is different.
So, the IMI code (Article 11-A) establishes that, until the value of the IAS is equal to the minimum guaranteed monthly remuneration in force in 2010 (475€), this last indicator will be used.
In this way, the family income, for the purposes of exemption from IMI, cannot exceed the 2.3 x €475 x 14, that is, 15.295€.
On the other hand, the global tax asset value of all rural and urban properties belonging to the household cannot exceed 10 times the annual value of the IAS (in this case, €475)that is, the family’s immovable property must not be worth more than €66,500 (10 x €475 x 14).
This exemption is granted on the basis of previous year’s earnings. That is, the exemption from IMI in 2022 is calculated based on the income of 2021, being done automatically.
The IMI exemption not only covers the house, but also the storage, pantries and garages, provided that they are part of the same building or housing complex.
However, they must be used exclusively by the owner or his household, as a complement to the exempt housing.
There is, however, an exception with regard to own and permanent housing: if, on December 31 of the year to which the tax relates, the taxpayer you are residing in a nursing home, does not lose the exemption. However, you will have to prove to the Tax and Customs Authority that the property in question was your own permanent home until you went home.
Are you the beneficiary of an undivided inheritance?
Since 2021, the permanent IMI exemption for owners of buildings with low equity value also came to apply to heirs who benefit from an undivided inheritance. Heirs must meet the requirements for the exemption. That is, the property must be your permanent home.
Requirements for the temporary exemption
The IMI exemption can be permanent or temporary. The permanent exemption is granted to families with low incomes (less than €15,295) and properties with an asset value below €66,500 and remains in effect as long as these requirements are not changed.
already the temporary exemption is intended for families who acquire a property for their own and permanent housing and only lasts three years.
It also takes into account the value of the property and the financial situation of its owners. But in this case, the property cannot be worth more than €125,000 and the income must not exceed €153,300 annual (no. 1 of article 46 of the Tax Benefits Statute).
There are, however, limits. The same owner or household can only benefit from this exemption twice and at different times.
Other cases of exemption from IMI
The legislation on IMI has changed over the years, adding to the list of exemptions other cases related to social, historical, economic or environmental issues.
Rehabilitated urban buildings
Thus, the exemption from IMI started to apply also to urban buildings that have been rehabilitated, that are inserted in urban rehabilitation areas or that were built more than 30 years ago.
However, and for this to happen, they must be aimed at lease for permanent housing or own and permanent housing. In this case, the exemption lasts for three years, up to five years. (article 45 of the EBF).
Built or improved buildings intended for housing
Urban buildings constructed, expanded, improved or acquired for consideration, intended to own and permanent housing or to the housing lease are also exempt from municipal property tax for a period of three years (article 46 of the EBF).
stores with history
Stores that have been recognized by the Municipalities as establishments of historical, cultural or social interest and that are part of the national inventory – the so-called stores with history – also benefit from exemption from IMI. (subparagraph q), no. 1, article 44 of the EBF).
The exemption may also cover rustic buildings intended for forestry, buildings integrated in real estate investment funds, tourist utility enterprises, among others.
How to apply for IMI exemption?
In the case of the permanent exemption, if you meet the necessary conditions, the only thing you have to do is deliver, within the deadline, your income statement. If you don’t, you run the risk of losing your right to this benefit.
The permanent exemption of IMI, precisely because it depends on income and assets, is automatically assigned and based on data made available to the Tax Authority (AT).
already in temporary exemption, depends on the situation. When it’s about an acquisition of the property for own and permanent housing and the aforementioned requirements are met, the assignment is also made according to automatic way by AT.
In the case of buildings constructed, expanded or improved for their own and permanent housing, this benefit has to be requested and analyzed.
The request is made through the Finance Portal, in the Municipal Property Tax tab, then choosing the option indicated for the reason for which you are requesting the exemption.
If you go to Finance, you must bring your Citizen Card or Taxpayer Card (NIF) and the deed or building book. To access the Finance website, simply use your usual password.
How to confirm exemption from IMI?
If you want to know if a certain property is covered by the IMI exemption, you can obtain this information from the finance services or online, through the Finance Portal, by selecting the options Services > Consult > Properties .
Can IMI be aggravated?
Just as there are exemptions, there are aggravations. One of them is the AIMI, or Additional to IMI – also known as the “Mortágua tax”, which is levied on high-value real estate (more than 600 thousand euros).
The proceeds from this additional tax are intended to finance the Social Security Financial Stability Fund.
The IMI is also increased for vacant buildings in areas of urban pressure, such as the historic centers of cities.
In these cases, the rate to be applied may be six times the normal value. For each year that passes, the IMI is increased by an additional 10%, up to a maximum of 12 times the normal rate.
Article originally published in May 2019. Updated regularly in the month to which the tax relates.