The proposal with the new values for location coefficients for Council tax purposes has been completed and has been sent to the Revenue Department, but the process has been suspended since the beginning of the pandemic and there is no schedule for starting over. Values for Lisbon should rise.
The revision of the location coefficients for Council tax purposes, which should have been completed in 2019, remains stalled, following the pandemic and with no date for resuming activities, as ascertained by Jornal Negócios. These coefficients, which are used to determine the tax asset value (VPT) of the buildings and, consequently to ascertain the council tax band payable following the evaluations, have already been reviewed by the evaluating experts of the Revenue services. However, they were not validated and published by the Treasury, who have the last word.
Figures pointed to increases
The review by the experts and which CNAPU sent to the Revenue at the end of 2019 pointed to substantial increases in coefficients, especially in large urban centers, as the Jornal Negócios then reported. Compared to the maps now in force, practically the entire city of Lisbon recorded increases: throughout the riverside area – especially the Expo area – in Baixa and Avenidas Novas, Campo de Ourique or Telheiras, just to give some examples that not only saw increases but were approaching or were already at the maximum level of the coefficient (between 0.4 and 3.5). In Porto there were also rises, but less expressive, particularly in the area of Foz, Hospital de São João or Gaia, on the South side of the river.
The location coefficient reflects variables such as accessibility, proximity to social facilities, transportation services or areas of high real estate market value. This raises the question of whether values have to be re-revalued now that the housing market suffering the effects of the crisis.
What dividing into areas means and what is it for?
For the setting of the location coefficients used in the definition of the tax asset value of the buildings, the territory is divided into as equivalent areas as possible taking into account a set of criteria. The higher it is, the more it will influence the real estate VPT and, consequently, the council tax to pay on an annual basis. These coefficients are periodically revised to reflect the changes that are taking place in urban centres and the evolution of the real estate market.
Fiscal measures for the ride of the pandemic
At the beginning of the pandemic, the Government soon launched some tax relief measures for the immediate time. The supplementary budget proposal brings more and longer lasting changes in time.
Source: Jornal de Negócios (28-06-2020)