The Additional to the Municipal Property Tax (hereinafter, AIMI) was created by the Government Budget of 2017 (Law no. 42/2016, of December 28th) and entered into force on January 1st of 2017.
Firstly, it can be said that this is a manifestation of personal and individual taxation on wealth. The objective is to tax the net asset value of real estate intended for housing or building purposes, following progressive rules for individuals and a proportionate rate for legal persons.
According to the general framework, it is assumed that the owners of the real estate are those registered in the property title, thus reversing the burden of proof and enabling the automatic assessment of the tax by the Tax Authority (AT).
Regarding to natural persons, the AIMI allows them to opt for a joint taxation, through a delivery of a statement (mandatory and annual) to the AT.
If the joint taxation option is effective, only a single payment of the AIMI is due, thus doubling the taxable asset value to which the rates apply.
Nevertheless, the ownership of the real estate belonging to a married couple may not be duly registered in the property title. Given that, this option for joint taxation is, in most cases, less burdensome for families, and the existence of this reporting obligation constitutes an unreasonable and disproportionate measure, from a constitutional point of view, in light of the purpose that the law aims to achieve.
In this first “experience” of the AIMI, it is proven that many married taxpayers were unjustly taxed, since they have assumed that taxation would be automatically done jointly – both because the property does not belong to one only, and for the fact that the family real estate should be considered as only one.
Finally, in order to safeguard the interests of our clients, Caiado Guerreiro has advised the necessary steps towards a reduced taxation of the AIMI.