Banks Are Charging AIMI on Leasing Contracts of Less Than 600,000 Euros

20 March 2018

There are banks, among them CGD, which are charging the Municipal Property Tax surcharge (AIMI) to real estate leasing clients whose properties have a Taxable Asset Value (VPT) of less than 600,000 euros, the legal minimum for charging the tax.

AIMI began to be charged last year, targeting homeowners with valuable homes. The tax is levied on people who have properties that are valued above 600,000 euros. Individuals are subject to an AIMI rate of 0.7% of the VPT, rising to 1% when the value exceeds one million euros. Companies, for their part, are subject to a rate of 0.4%.

At issue is the fact that some banking institutions, such as CGD or Santander Totta, are charging this tax to leasing customers, even those whose VPT amounts are below the threshold of 600,000 euros, ECO reported. However, the lessee (user of the property) should only be obliged to pay the AIMI if the VPT exceeds the set amount.

Left Block Demands Answers

Some banks, such as CGD, must pay AIMI on their portfolio of properties whose values exceed 600,000 euros. What did they opt to do? Repass the tax charges to their customers. The practice has been denounced by the Left Block’s deputy Mariana Mortágua, who has already questioned the state-owned bank as to why the tax is being charged to customers with properties beneath the cut-off.

“The amount charged should be obvious: for legal entities such as CGD – the AIMI rate corresponds to 0.4% of the VPT. The state-owned bank charges the tax that it owes, due to its vast real estate portfolio, to its clients, including the owners of property whose VPT is well below the tax’s threshold,” the deputy petition states, as quoted by the Jornal Econômico.

“It is logically inferred that a tenant of a residential property whose value does not qualify for payment of AIMI will not pay the said tax since there are no other charges relating to those properties,” the deputy added. The Left Block also fears that “such malfeasance” will end up “distorting the purpose of the AIMI.”

Original Story: Idealista

Photo: Creative Commons

Translation: Richard Turner