Increased Energy Efficiency Can Reduce IMI in Lisbon

29 November 2017

The Lisbon City Council will give tax benefits to property owners who increase the energy efficiency of buildings or urban areas through rehabilitation, allowing a reduction to the Municipal Property Tax (IMI).

During the presentation of the municipal budget for 2018, in which 833.4 million euros in funds are to be allocated, the Finance Councillor of the Lisbon Chamber explained that this issue “is to be verified by the Tax Authority”, but the municipality “has the power to define rules”.

“Our proposal is that if an urban rehabilitation project can increase a property’s energy efficiency by two levels, or find a solution can be found that permits the re-utilisation of rainwater, an incentive linked to the IMI will be available,” said the mayor.

João Paulo Saraiva affirmed that this “is a mechanism that is already in use”, and that, next year, the reduction will go from 10% to 15%.

With this measure, “Lisbon is proposing mechanisms to incentivise urban regeneration to an even greater extent. We all need to adapt to climate change by implementing changes to our environment, he argued.

“This is a significant measure that is consistent with what we have been doing in our policy to combat climate change,” the councilman stated.

The municipality currently allocates a reduction of 10% in IMI over five years to urban buildings with energy efficiency equal to or higher than one or two classes higher than the old one, and which reuse treated wastewater or rainwater.

These increased efficiencies must be the result of construction, renovation, alteration, expansion or conservation, the municipality’s website indicates.

The measure will now be presented to the remainder of the council, and then proceed to a vote before the Municipal Assembly.

In the presentation of the budget for 2018, which will be unveiled at a meeting of the city council on December 14, requiring a subsequent Lapproval by the Municipal Assembly of Lisbon, the Finance Councillor also referred to the municipal companies, which mostly will have a slight increase in their consolidated budgets.

The only exception is the Urban Rehabilitation Society (SRU), whose budget goes from 21 to 16 million euros, down 23.8%.

Original Story: Diário Imobiliário

Translation: Richard Turner