IRS, IMI, IMT and other OE2020 real estate news - Part 1

The 2020 State Budget (SO2020) has already been delivered to Parliament. The document anticipates measures that impact on the lives of families and businesses, from health to wages, public debt management and pensions, to justice, education or culture. There are also many new developments for real estate, particularly in the areas of leasing and taxes, such as IMI, IMT or capital gains. We have prepared an explanatory guide from A to Z with everything you need to know about the new budget.

 

AL in containment areas will pay more IRS

The OE2020 will penalize those who have Real Estate (AL) properties in the containment areas defined by the municipalities. Homeowners for tourists will pay more IRS, meaning they will be taxed at 50% of income instead of the current 35%. In practice, and according to the SO proposal, it is that instead of 0.35 the coefficient becomes 0.50 whenever a dwelling or apartment located in these areas is concerned.

 

With this measure, the Government expects to raise about 10 million euros, which will be destined to the Institute of Housing and Urban Rehabilitation (IHRU).

 

Houses taken from AL for free rental free of capital gains

Facilitating the “giving up” of the tourist house business is also in the plans of the António Costa Executive. According to the preliminary version of the OE2020, those who remove a house from LA will no longer be subject to capital gains. But there is one condition: Anyone who does so will have to transfer these properties to (traditional) housing for a period of five years.

 

New IMT Tier: Aggravated Tax for Real Estate Over 1 Million

The Municipal Property Transfer Tax (IMT) on property (purchase price) of more than one million euros is expected to increase by 2020. The Government wants to introduce a 7.5% property tax property purchase price above this amount - so far the maximum rate was 6% for buildings above 574,000 euros. That is, the rate of 6% for real estate remains between 574,000 euros and one million euros and there is a new rate of 7.5% for properties that cost more than one million euros.

 

Banks lose IMT exemption on properties held for more than 5 years

The preliminary version of the OE2020 brings bad news to the banks. Financial entities will lose their exemption on acquisitions of properties received under credit enforcement proceedings if they are not sold within five years.

 

"They shall cease to be exempt from purchases [of real estate by credit institutions] if the buildings are not divested within five years from the date of the acquisition or the acquirer is a special relationship entity", says a preliminary version of the SO2020 proposal. According to the document, banks will no longer benefit from exemption from IMT on acquisitions where the buyer is an entity with whom they have special relations or resident in a tax haven.

 

Source: Idealist / News