Portimão council has approved a proposal by Mayor Isilda Gomes to reduce the local Municipal Property Tax (IMI) from 0.50% to 0.45% for urban buildings in 2017.
As the municipality is in the government lending scheme to switch short-term debt to long-term, successfully having borrowed €130 million to ease the pain, it should be charging an obligatory 0.5% but as the council has demonstrated that it is able to repay the long-term debt interest, there now is some flexibility in IMI rates.
The reduction to 0.45% is the first sign of relief for local property owners for seven years.
As an example, the municipality says that a family living in Portimão that previously paid €600 of IMI per year, will now pay €540 with an overall annual saving to Portimão locals of €2 million.
In order to make this decision possible, the economic and financial results of the last few years had to be analysed but with the 2016 budget set to yield a surplus of €8.1 million, the IMI rate can reduce.
The IMI for rural buildings will remain at a painful 0.8% but the proposal for urban property was approved at council meeting and now will be voted on in a full session of the Municipal Assembly.
2017 is an election year for Portugal's local councils.
