Portugal scraps mansion tax, huge relief for owners of houses above one million Euros.
In a surprising move, the government budget proposal has eliminated a 1% stamp duty tax levied on houses appraised by the tax office as being worth more than 1 million Euros. In Portugal houses are valued for tax purposes according to criteria of location, size, age, commodities like pools and garages and also sun exposure and views. This tax valuations are in average 30% below market prices, the difference being more pronounced on older houses.The 2011 budget introduced a controversial stamp duty tax of 1% on houses valued at more than one million euros. This tax came on top of the IMI, a council tax levied on all houses ranging from 0,3 to 0,5 on the tax value of the house. The stamp duty of 1% will be substituted for an additional IMI tax of 0,3 levied on all houses above a 600.000,00 (six hundred thousand) Euros tax valuation. However the additional tax will only be levied on the value above said 600.000,00 Euros. This measure, if approved, will come into force on the 1st of January 2017.