Taxation of Municipal Property Tax (IMI) in Portugal varies according to the use of the property, whether for own residence or as local accommodation. Here are the main differences:
Own Residence
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Base IMI Rate:
The IMI rate for properties with tourist or commercial use (including most Local Accommodations) is, as a rule, different from the residential rate, varying between 0.2% and 0.5% of VPT (Art. 112, no. 1, of CIMI), with many municipalities applying the minimum rate (0.2%).
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IMI Aggravation / Surtax (More Housing Law):
Law no. 56/2023 (More Housing) introduced a significant aggravation of the IMI rate for Local Accommodation. In urban pressure zones, Municipal Councils may increase the IMI rate by up to 100% of the normal municipal rate value (Art. 112, no. 18, of CIMI). This surtax is the most important factor of recent tax distinction.
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IMI Exemption: Properties used as own and permanent residence may be exempt from IMI, depending on criteria such as the household’s gross annual income and the global VPT of the household’s properties.
Local Accommodation
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IMI Rate:
The IMI rate for properties used as local accommodation is the same as that applied to residential properties, varying between 0.3% and 0.45% of VPT, as defined by the municipality.
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Additional to IMI (AIMI):
Properties used as Local Accommodation may be excluded from AIMI (Additional IMI Tax) if the owner opts to allocate the property to economic activity (commerce, industry, or services), as permitted by Art. 135-C of CIMI.
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Extraordinary Contribution on Local Accommodation (CEAL):
Although CEAL was revoked in 2024, previously, it was applied to properties registered as local accommodation, especially in areas of high tourist density.
General Considerations
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Change of Use:
If a property initially intended for own residence is converted to local accommodation, this may affect IMI exemption (which is specific to own and permanent residence) and, crucially, subject it to IMI aggravation if located in an urban pressure zone.
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Local Regulation:
It is important to check local regulations, as some areas may have specific rules for taxation of properties used as local accommodation.
In summary, the main difference lies in the possibility of total IMI exemption for own and permanent residence and, for Local Accommodation, in the application of a different IMI rate (between 0.2% and 0.5%) and, above all, in the potential application of a surtax of up to 100% of IMI in urban pressure zones, according to the More Housing Law.