Portugal’s Municipal Property Tax (Imposto Municipal sobre Imveis, or IMI) is an annual tax levied on the value of real estate held within the country. This includes rural and urban buildings, as well as land. The tax rate, determined by each municipality within set limits, is applied to the rateable value of the property, which is periodically assessed by the tax authorities. A typical example might involve a villa in the Algarve subject to a 0.4% municipal tax rate applied to its officially registered value.
This revenue stream plays a vital role in funding local government services and infrastructure projects. It contributes to essential public services like waste management, road maintenance, and local development initiatives. The system’s history traces back to previous property tax iterations, evolving over time to its current form, providing a stable financial foundation for municipal budgets. Furthermore, regular reassessments of property values contribute to a more accurate and equitable tax base.
