Process: 81/2014-T

Date: November 17, 2014

Tax Type: Selo

Source: Original CAAD Decision

Summary

This CAAD arbitration case (Process 81/2014-T) concerns the application of Stamp Tax under item 28.1 of the General Stamp Tax Table (TGIS) to properties owned by an investment fund. The Tax Authority assessed annual Stamp Duty totaling €38,343.19 on two urban properties with patrimonial tax values exceeding €1,000,000, classifying them as residential properties subject to the tax introduced for luxury assets. The fund challenged these assessments, arguing that the properties function exclusively as golf courses and cannot be classified as having residential use. The central legal dispute focuses on the interpretation of 'properties with residential designation' under item 28.1 of TGIS. The applicant contends that absent a specific definition in Stamp Tax legislation, the classification criteria from the Municipal Property Tax Code (CIMI) should apply. Under CIMI article 6, urban properties are categorized as residential, commercial/industrial/service, land for construction, or others. The fund argues golf courses fall under the 'others' category, as evidenced by subdivision permits, property registry entries, and tax declarations consistently identifying the properties as golf courses since 1994. The applicant invokes constitutional principles prohibiting the Tax Authority from extending tax scope through analogy or extensive interpretation, asserting that golf courses cannot be subsumed under residential use either by statutory language or legislative intent. The fund successfully filed gracious appeals in August 2013, which were dismissed in September 2013, leading to this arbitration request in February 2014 under the Legal Regime for Tax Arbitration (RJAT). The case illustrates the procedural rights of investment funds to challenge Stamp Tax assessments and the interpretive challenges surrounding property classification for taxation of high-value assets.

Full Decision

ARBITRAL DECISION

I. REPORT

  1. A, with Tax Identification Number ..., managed and legally represented by management company B, S.A., hereinafter identified as the Applicant, requested on 3 February 2014, the constitution of an arbitral tribunal, in accordance with the provisions of articles 2, no. 1, paragraph a), and 10, no. 1 and 2, of Decree-Law no. 10/2011 of 20 January (hereinafter, Legal Regime for Tax Arbitration or RJAT) and of articles 1 and 2 of Ministerial Order no. 112-A/2011 of 22 March, with a view to:

a) the declaration of illegality of the express decisions of dismissal of the amicable appeals through which it challenged the assessments of Stamp Duty ("IS"), nos. 2013 ... (whose annual collection assessed is of € 11,604.80) and nos. 2013 ... (whose annual collection assessed is of € 26,738.39), in the total amount of € 38,343.19 and which gave rise to these amicable appeal proceedings; and,

b) the annulment of those assessments;

  1. The Contested Assessments have as their object the taxation, in accordance with item 28.1 of the General Table of Stamp Duty ("TGIS"), of the ownership of "property with residential use" with a tax patrimonial value ("VPT") equal to or greater than € 1,000,000, with reference to the year 2012.

  2. They were issued to the Applicant, with the obligation of their payment divided into three instalments.

  3. Because it considered them illegal, the Applicant submitted, on 27 August 2013, amicable appeals of those assessments requesting their respective annulment.

  4. The amicable appeals submitted by the Applicant were the subject of an express decision of dismissal on 26 September 2013.

  5. The period for submitting a request for constitution of an Arbitral Tribunal, counted from the date of notification of the dismissal of the amicable appeals, was respected.

  6. In the request, the Applicants chose not to designate an arbitrator.

  7. In accordance with no. 2 of article 6 of the RJAT, the Ethics Council of the Arbitration Centre designated the undersigned Sole Arbitrator, having notified the parties thereof.

  8. The tribunal has been regularly constituted since 9 April 2014, to examine and rule on the subject matter of the proceedings.

  9. The grounds supporting the request for arbitral ruling by the Applicant are, in summary, and as to the facts, the following:

10.1 The Applicant, by acquisition made from C, on 22 December 2006, is the owner and legitimate holder of the following urban properties:

(i) Urban property located at ..., Plot ..., described in the Real Property Registry Office of Sesimbra under no. ..., parish ... and registered in the urban property registry under article ...; and,

(ii) Urban property located at ..., Plot ..., described in the Real Property Registry Office of Sesimbra under no. ..., parish ... and registered in the urban property registry under article ....

10.2 At the date of the said acquisition, both properties already formed part of the urban development project at ..., for which the corresponding subdivision permit (with no. ...) was issued.

10.3 In the subdivision permit, the said plots were already intended for the construction of a golf course.

10.4 The successive amendments made to this initial permit did not alter the purpose assigned to the said plots.

10.5 The aforesaid plots were inaugurated as a Golf Course in 1994, so that at the date of their acquisition, they already had that purpose, that is, they were effectively golf courses.

10.6 Considering that on the date of their acquisition, the properties in question had not yet been valued, the Applicant promoted that valuation by submitting, for that purpose, the respective Form 1 declaration, where, as their purpose, was stated "Others/Golf Course".

10.7 In September 2010, the Applicant, under article 130, no. 3, paragraph a) and no. 4 of the CIMI, promoted a new valuation request, considering that the Tax Patrimonial Value (VPT) was outdated, and in the new Form 1 declarations submitted for that purpose, was, once again, stated the purpose previously assigned to the properties, that is, Golf Courses.

10.8 The valuation promoted by the competent Finance Service was made on the basis of the elements declared by the Applicant, from which it resulted that both properties were considered, by the evaluating entity (Tax Authority), as being and being intended as Golf Courses.

10.9 Which led to the fact that, when definitively transcribed to the registries, it was to that nature, type, use and composition that was assigned to them, as appears in the documents attached to the initial petition.

10.10 In March 2013, the Applicant was notified of the IS assessment relating to these properties, issued under the provisions of item 28.1 of the General Table of IS (TGIS), assessment with which the Applicant, as it could not agree with it, filed the corresponding amicable appeals for each of the properties in question.

10.11 To these appeals were assigned the numbers ... and ....

10.12 Subsequently, the Applicant was also notified of the assessments relating to the second and third instalments of this tax.

  1. As to the law, the Applicant supports its request with the following grounds:

11.1 As a preliminary matter, the Applicant, considering that the factual and legal reality is the same in the two tax matters sub judice, intends, under the principle of procedural economy, to submit for its examination and judgment the illegality of the two dismissal decisions and the underlying tax acts of assessment.

11.2 The Applicant considers that the contested assessments are illegal, in the following terms:

i) Item 28.1 of the TGIS envisages properties with residential use, and in its understanding there is no legal definition of this concept.

ii) Given this absence of legal definition, one should, in accordance with the Stamp Duty Code and the reference made therein in its article 67, no. 2, take into account the concept and classification of properties contained in the Municipal Property Tax Code, more specifically in its article 6.

iii) In article 6 of the CIMI urban properties are divided into "Residential", "Commercial, industrial or service", "Land for construction" and "Others", and in this provision is clarified and defined, clearly and unambiguously, each of these concepts.

iv) In this sense, article 6, no. 2 of the CIMI provides that buildings or constructions for such purposes are considered residential or, in the absence of a license, those that have as their normal purpose this end.

v) The AT, in the case in question, and inexplicably, takes the position that the properties in question have as their purpose residential use, deliberately ignoring the approved licensing for the properties in question, namely the subdivision permit and the entry in the registry.

vi) The Applicant considers, therefore, that Golf Courses, which is the actual use of the properties in question, can only constitute the class "Others", which is a class totally and completely autonomous and distinct from the class of properties classified as "residential".

vii) In accordance with the Constitution of the Portuguese Republic (CRP), the AT cannot, through analogy and/or extensive interpretation, alter the scope of taxes, which is what it intends to do in this case, by altering the scope of the tax mentioned (Stamp Duty) assimilating a golf course to a property with residential use.

viii) Now, the Applicant considers, a "Golf Course" cannot, in any way, be subsumed in the concept of property with residential use, whether looking at the letter of the law or looking at the intention of the legislator itself.

ix) It sufficing, in the latter case (intention of the legislator), to pay attention to what was expressly assumed in the said Law 55-A/2012, where it is indicated that it is intended to tax "assets considered luxury", which presupposes that the taxed (taxable person) should be the consumer/user thereof.

x) What was intended to be taxed, as results from the parliamentary debate itself prior to the approval of that statute, was, therefore, residential buildings, or in the terminology adopted there, houses, or high-value properties.

xi) The concept "houses" is, in the Applicant's understanding, sufficient to clarify which type of urban properties are covered by the norm created.

xii) The fact that some type of residential coefficient was used in the valuation of the properties is not capable of confusing or influencing the purpose to which the properties are intended, which is the touchstone for the application of the norm contained in item 28.1 of the TGIS.

xiii) Now, as these properties are Golf Courses they do not meet the functional characteristics (not even in potential terms) to be habitable, so they do not meet the elementary requirement in the mentioned norm for its application.

xiv) It concludes its argument by citing the Arbitral Decision handed down in the context of Case 42/2013-T, with particular emphasis on the part where the Tribunal interpreted the expression "residential use", therein considering that the expression urban property with that type of use reconduses to that of residential urban property, provided for in article 6, no. 1, paragraph a) of the CIMI.

11.3 Finally, the Applicant argues that if the contested assessments were maintained, they would violate the provisions of articles 103 and 104 of the Constitution of the Portuguese Republic (CRP), and therefore should also be annulled on those grounds.

  1. In its reply, the AT argues that the properties on which the assessments complained of fall, being golf courses, have the legal nature of properties with residential use, and therefore the assessment acts should be upheld.

The AT supports its position with the following arguments:

12.1 In the absence of any definition of the concepts of urban property and residential use under IS, one should, in view of the provision in article 67, no. 2 of the Stamp Duty Code, resort to the CIMI in search of a definition that allows determining the possible subject to IS.

12.2 In the CIMI, the notion of use of urban property is found in the part relating to the valuation of properties, which in the view of the AT is justified and understood because the valuation of the property (purpose) incorporates value to the property, constituting a determining fact of distinction.

12.3 The legislator chose to determine the application of the methodology of valuation of properties in general to the valuation of land for construction, so that the residential coefficient provided for in article 41 of the CIMI is applicable to them (cf., for that purpose, Judgment no. 04950/11 of 14.02.2012).

12.3 Thus, for the purposes of determining the VPT of urban properties it is clear the application of the residential coefficient under valuation, so its consideration for the purposes of applying item 28 of the TGIS cannot be ignored.

12.4 Item 28 of the TGIS, in referring to the expression "properties with residential use", appeals to a classification that overlaps with the categories provided for in article 6, no. 1 of the CIMI.

12.5 Thus, the AT considers that the concept of "properties with residential use" for the purposes of item 28 of the TGIS includes both built-up properties and land that does not integrate the concept of rural property, and whose final purpose is its residential use.

12.6 The AT considers that the legislator, by not referring to "properties intended for residential use", opting for the notion "residential use", intends to integrate into this concept other realities beyond those identified in article 6, paragraph a) of the CIMI.

12.7 The properties on which the contested assessments fell were valued as properties with residential use and form part of an urban nucleus of residential nature.

12.8 In the property registry entry of these properties, they were expressly classified as residential and, therefore, were valued as such.

12.9 Thus being, the requirements for these properties to be subject to taxation under IS by item 28.1 of the TGIS are met.

12.10 The AT further understands that the provision of item 28.1 does not constitute the violation of any constitutional command, as item 28 of the TGIS does not, in any way, call into question the principles of equality and proportionality.

12.11 Insofar as it is a general and abstract norm that is applicable, indistinctly to all cases in which its respective requirements are met, whether of fact or of law.

12.12 The AT considers that the different suitability of a property supports the difference in treatment, having been the choice of the legislator, for economic and political reasons, to exclude from the scope of IS properties intended for purposes other than residential.

12.13 So that the measure implemented seeks to achieve maximum effectiveness regarding the objective to be achieved, with minimum damage to other interests considered relevant.

12.14 The violation of the mentioned principles does not occur because this measure is applicable, indistinctly to all holders of properties with residential use that have a VPT exceeding € 1,000,000.00.

  1. On 4 September 2014, the meeting referred to in article 18 of the RJAT took place, following which the Applicant submitted its arguments on 15 September.

  2. The Respondent did not exercise that right to submit arguments.

  3. In the said arguments, the Applicant maintained the arguments already made in the request for constitution of the Arbitral Tribunal, already described in detail above, so the Tribunal dispenses with referring to them at this stage.

II. REASONING

II.1 FACTUAL MATTER

  1. The Applicant is the owner and legitimate owner of the following properties on which the Stamp Duty assessments (IS) fell:

(i) Urban property located at ..., Plot ..., described in the Real Property Registry Office of Sesimbra under no. ..., parish ... and registered in the urban property registry under article ...; and,

(ii) Urban property located at ..., Plot ..., described in the Real Property Registry Office of Sesimbra under no. ..., parish ... and registered in the urban property registry under article ....

  1. All properties on which the IS assessment fell are classified, in their respective registries, as Golf Courses.

  2. The contested Assessments have as their object the taxation of the properties identified above in accordance with item 28.1 of the TGIS, as they are urban properties with residential use with VPT exceeding € 1,000,000.00.

  3. On 27 August 2013, the Applicant filed an amicable appeal of these assessments, to which were assigned the numbers ... and ....

  4. These amicable appeals were the subject of dismissal on 26 September 2013.

  5. On 3 February 2014, the Applicant submitted the request for constitution of the Arbitral Tribunal, in accordance with the provisions of articles 2, no. 1, paragraph a), and 10, no. 1 and 2, of Decree-Law no. 10/2011 of 20 January (hereinafter, Legal Regime for Tax Arbitration or RJAT) and of articles 1 and 2 of Ministerial Order no. 112-A/2011 of 22 March, with a view to the declaration of illegality of the IS assessment acts and the subsequent acts of dismissal of the amicable appeals.

  6. The Arbitral Tribunal was constituted on 9 April 2014.

The decision on the facts proved was based on the documents attached to the proceedings and on the non-objection of the Tax and Customs Authority as to facts invoked by the Applicants.

There are no unproven facts with relevance to the decision of the case.

II.2 QUESTION TO BE EXAMINED

The first, and it might also be said the main question, has to do with the legal classification of the properties identified in number 1 of section II.1 above, within the scope of item 28.1 of the TGIS.

As already mentioned, the assessments contested by the Applicants were issued under the rule of scope contained in item 28.1 of the TGIS, with the wording it had at the time to which the facts refer.

The Applicant understands that, as the properties subject to taxation are classified and registered in the registry as Golf Courses, it is manifestly illegal the assessment, because those properties cannot, in any way, be considered as "properties with residential use".

The fundamental question is, therefore, to determine whether the properties in question can have "residential use".

As we have seen, Law 55-A/2012 of 29 October introduced various amendments to the Stamp Duty Code, and added to the TGIS item 28, to which it gave the following wording:

"28 – Ownership, usufruct or right of superficies of urban properties whose tax patrimonial value contained in the registry, in accordance with the Municipal Property Tax Code (CIMI), is equal to or greater than € 1,000,000 – on the tax patrimonial value used for IMI purposes:

28.1 – For property with residential use – 1%

28.2 - ……….."

The said Law later, in its article 6, established some transitional rules of application, having therein, in the same way as in the cited and transcribed item 28, used, again, the same concept of property with residential use.

It should be noted that this concept is not used by the legislator in any other legislation of a tax nature, namely in the CIMI, which, in several provisions of the Stamp Duty Code is indicated as the diploma of subsidiary application regarding the tax provided for in item 28 of the TGIS (see, for this purpose, articles 2, no. 4, 3, no. 3 u), 5 u), 23, no. 7 and 46 and 67 of the Stamp Duty Code).

Indeed, in the CIMI, as is referred to by both Parties in their procedural documents, more specifically in its articles 2 to 6, the types of properties are enumerated and defined as follows:

Article 2

Concept of Property

1 - For the purposes of this Code, property is any fraction of territory, encompassing waters, plantations, buildings and constructions of any nature incorporated or based thereon, with permanent character, provided that it forms part of the assets of a natural or legal person and, in normal circumstances, has economic value, as well as waters, plantations, buildings or constructions, in the aforementioned circumstances, endowed with economic autonomy in relation to the land where they are located, although situated in a fraction of territory that forms an integral part of different assets or does not have patrimonial nature.

2 - Buildings or constructions, even if movable by nature, are deemed to have permanent character when intended for non-transitory purposes.

3 - Permanent character is presumed when buildings or constructions are based in the same location for a period exceeding one year.

4 - For the purposes of this tax, each autonomous fraction, under the regime of horizontal property, is deemed to constitute a property.

Article 3

Rural Properties

1 - Rural properties are land located outside an urban agglomeration that should not be classified as land for construction, in accordance with no. 3 of article 6, provided that:

a) They are intended or, in the absence of specific intention, have as their normal purpose use generating agricultural income, such as are considered for the purposes of personal income tax (IRS);
b) Not having the intention indicated in the previous paragraph, they are not built or have only buildings or constructions of accessory character, without economic autonomy and of reduced value.

2 - Land located within an urban agglomeration are also rural properties, provided that, by force of legally approved provision, they cannot have use generating any income or can only have use generating agricultural income and are actually having this intention.

3 - There are also rural properties:
a) Buildings and constructions directly intended for the production of agricultural or livestock income, when located on the land referred to in the previous numbers;

b) Waters and plantations in the situations referred to in no. 1 of article 2.

4 - For the purposes of this Code, urban agglomerations are considered, besides those located within legally fixed perimeters, agglomerations with a minimum of 10 dwellings served by public roads, with their perimeter delimited by points distant 50 m from the axis of the roads, in the transversal direction, and 20 m from the last building, in the direction of the roads.

Article 4

Urban Properties

Urban properties are all those that should not be classified as rural, without prejudice to the provision of the following article.

Article 5

Mixed Properties

1 - Whenever a property has rural and urban parts it is classified, in its entirety, in accordance with the principal part.

2 - If neither of the parts can be classified as principal, the property is deemed mixed.

Article 6

Categories of Urban Properties

1 - Urban properties are divided into:
a) Residential;
b) Commercial, industrial or service;
c) Land for construction;
d) Others.

2 - Residential, commercial, industrial or service are buildings or constructions for such purposes licensed or, in the absence of a license, that have as their normal purpose each of these ends.

3 - Land for construction is considered land located inside or outside an urban agglomeration, for which a license or authorization has been granted, prior communication admitted or favorable prior information issued for a subdivision or construction operation, and also those that have been thus declared in the acquisition title, except for land where the competent entities prohibit any of those operations, namely those located in green spaces, protected areas or which, in accordance with municipal territorial planning plans, are intended for public spaces, infrastructure or equipment.

4 - Those falling within the provision of paragraph d) of no. 1 are land located within an urban agglomeration that are not land for construction nor are covered by the provision of no. 2 of article 3 and also buildings and constructions licensed or, in the absence of a license, that have as their normal purpose other ends than those referred to in no. 2 and also those of the exception of no. 3.

It is easy, therefore, to note that, as already mentioned above, the concept of "property with residential use" is not used by the legislator in the CIMI.

Thus, a literal interpretation of the rule contained in item 28.1 of the TGIS leads to the conclusion that the intention of the legislator was to include in its scope of application urban properties that have residential use.

Starting from this intention, one should determine when a property is intended for residential purposes, namely whether it is when that purpose is assigned to it in some licensing act or in an act of similar nature, or whether it is only when the attribution of that purpose is actually concretized.

From the wording given to item 28.1, it seems clear that the intention of the legislator was to consider necessary an actual use and not merely when the properties, land, buildings or constructions were licensed for that purpose - or, in the absence of that license, those that have as their normal purpose that end.

If the legislator, in item 28.1 had been satisfied with these facts would have used the expression "residential properties" contained in article 6 of the CIMI and not the expression "properties with residential use".

From this it results, therefore, that a property with "residential use" cannot be merely a property licensed for residential use or intended for that purpose, having to be "something more than that", that is, it must be a property with actual use for that residential purpose.

Having to be, in this way, something actually built.

Now, the properties classified as Other/Golf Courses do not have, obviously, any type of building with a residential purpose (except for a building intended for the practice of that sport, normally called "Club House"), not meeting, in this way, any condition that could lead them to be considered as residential properties, and therefore, by a fortiori, "properties with residential use".

Insofar as the correct understanding is that the rule of item 28.1 will only be fulfilled when the residential use is actually concretized.

In this way, it does not seem possible for us to follow the thesis defended by the Respondent (AT), that it is sufficient to have used, in the process of valuing the properties, the residential coefficient to be faced with a property with residential use.

Being, in this way, appropriate to accept the thesis supported by the Applicant that residential use cannot be attributed to Golf Courses.

In conclusion, this Tribunal considers that the contested assessments are tainted with illegality, insofar as they fall on properties whose purpose is to be Golf Courses, a reality which, for the reasons that have been set out, cannot be included in the concept of "properties with residential use" enshrined in item 28.1 of the TGIS.

II.3 QUESTIONS PREJUDICIALLY AFFECTED

In light of the Tribunal's decision declaring the illegality of the assessments contested, subject of the present proceedings, the examination of the remaining defects questioned by the Applicants is prejudicially affected, namely that these assessments violated the constitutional principles of equality and proportionality.

III. DECISION

In light of the foregoing, it is decided to declare the request for annulment of the Contested Assessments well-founded, due to the defect of violation of law, and of the acts of dismissal of the amicable appeals submitted by the Applicants relating to these assessments.

IV. VALUE OF PROCEEDINGS

In accordance with the provision of article 315, no. 2, of the Code of Civil Procedure and 97-A, no. 1, paragraph a), of the Tax Procedure Code and 3, no. 2, of the Regulation of Costs in Tax Arbitration Proceedings, the value of the proceedings is set at € 38,343.19 (thirty-eight thousand three hundred and forty-three euros and nineteen cents).

V. COSTS

In accordance with Table I attached to the Regulation of Costs in Tax Arbitration Proceedings, the amount of costs is € 1,836.00 (one thousand eight hundred and thirty-six euros).

Notify.

Lisbon, 17 November 2014

(João Marques Pinto)

Frequently Asked Questions

Automatically Created

What is the Stamp Tax (Imposto do Selo) obligation under clause 28.1 of the TGIS for residential properties valued over €1,000,000?
Under item 28.1 of the General Stamp Tax Table (TGIS), properties with residential use (prédios com afetação habitacional) having a patrimonial tax value (VPT) equal to or greater than €1,000,000 are subject to annual Stamp Tax. This tax obligation, introduced by Law 55-A/2012 as part of austerity measures targeting luxury assets, applies to the ownership of high-value residential properties. The tax is assessed annually based on the property's VPT as of the reference year and is payable in three installments. The obligation falls on the property owner as of the taxation date, including investment funds and real estate entities. The tax rate and specific calculation method are determined by the applicable TGIS provisions for the relevant fiscal year.
How does the CAAD define 'prédios com afetação habitacional' (properties with housing designation) for Stamp Tax purposes?
The CAAD (Administrative Arbitration Centre) addresses the definition of 'prédios com afetação habitacional' (properties with residential designation) by examining the absence of an explicit definition in Stamp Tax legislation. In arbitration cases, tribunals typically reference article 67(2) of the Stamp Tax Code, which directs to Municipal Property Tax Code (CIMI) classifications. Under CIMI article 6, urban properties are categorized into four classes: residential, commercial/industrial/service, land for construction, and others. CIMI article 6(2) defines residential properties as buildings or constructions licensed for residential purposes or, absent licensing, those with residential use as their normal purpose. CAAD case law analyzes the actual use, licensing documentation, property registry entries, and tax declarations to determine whether a property has residential designation. Properties classified as 'others' under CIMI, such as golf courses, sports facilities, or specialized infrastructure, generally fall outside the scope of item 28.1 taxation.
Can investment funds challenge Stamp Tax assessments on urban properties through tax arbitration at CAAD?
Yes, investment funds can challenge Stamp Tax assessments on urban properties through tax arbitration at CAAD. Process 81/2014-T demonstrates that an investment fund (A), managed by B, S.A., successfully initiated arbitration proceedings under articles 2(1)(a) and 10(1)-(2) of the Legal Regime for Tax Arbitration (RJAT - Decree-Law 10/2011). Investment funds have legal standing to request arbitral tribunal constitution after exhausting the gracious appeal procedure. The fund must file a gracious appeal (reclamação graciosa) against the Stamp Tax assessment, and upon dismissal, can request arbitration within the statutory deadline counted from notification of the dismissal decision. Investment funds can choose whether to designate an arbitrator or allow the CAAD Ethics Council to appoint one. The arbitration covers both the legality of dismissal decisions and the underlying tax assessments, including requests for declaration of illegality and annulment of contested liquidations.
What is the procedure for filing a gracious complaint (reclamação graciosa) against Stamp Tax liquidations in Portugal?
The procedure for filing a gracious complaint (reclamação graciosa) against Stamp Tax liquidations follows these steps: (1) The taxpayer receives notification of the Stamp Tax assessment, typically issued with payment divided into three installments; (2) Within the statutory deadline (generally 120 days from notification), the taxpayer submits a written gracious appeal to the Tax Authority challenging the assessment's legality and requesting annulment; (3) The gracious appeal must identify the contested assessment, state factual and legal grounds for illegality, and include supporting documentation; (4) The Tax Authority examines the appeal and issues a decision (either granting the appeal, partially granting it, or dismissing it); (5) The taxpayer receives notification of the decision; (6) If dismissed or the taxpayer disagrees with the decision, within 90 days of notification, the taxpayer may either file a hierarchical appeal, initiate judicial review in administrative courts, or request constitution of an arbitral tribunal at CAAD under RJAT. Process 81/2014-T illustrates this timeline: assessments notified in March 2013, gracious appeals filed August 27, 2013, dismissal decision September 26, 2013, and arbitration request February 3, 2014.
Does the patrimonial tax value (VPT) of undeveloped urban lots with approved building permits qualify for the €1,000,000 Stamp Tax threshold?
The application of item 28.1 Stamp Tax to undeveloped urban lots with approved building permits depends on their classification under CIMI. Undeveloped urban lots with approved building permits are typically classified as 'land for construction' (terrenos para construção) under CIMI article 6(1)(c), not as residential properties. Item 28.1 of TGIS specifically targets 'properties with residential use' (prédios com afetação habitacional), which under CIMI article 6(2) refers to buildings or constructions actually licensed or normally used for residential purposes. Mere approval of a building permit for future residential construction does not transform undeveloped land into a residential property for Stamp Tax purposes. The patrimonial tax value (VPT) threshold of €1,000,000 applies only when the property itself has residential designation. However, if the lot contains existing residential buildings or constructions valued at or above €1,000,000, those would qualify. The classification depends on the actual state and licensed use of the property as reflected in property registry, tax declarations (Model 1), and municipal licensing, not on future intended development.