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Go Back      12-Feb-2012 11:07 AM
                                                                                

IUP - Property Tax


There are two types of Unique Property Tax (IUP):


 1. When you buy, inherit or are given a property you must pay 3% property tax.
2. Pay an Annual Property Tax.

 This is the link for the Decree Law (in Portuguese) which has been provided by the Camara Municipal, Espargos, Sal Island.
(REF law:-    Lei n° 79/V/98, de 7 de Dezembro. - Decreed from: Decreto – Lei no 18/99 de 26 April 99). 

Decree Law:   IUP - Boletin Official

ANNUAL PROPERTY TAX


You can pay your IUP at the Camara Municipal Building in Espargos or the Delegacao Municipal office which is situated near to the Correios (Post Office) in Santa Maria. For online payments see details below.

The following information concerning IUP, has been obtained from the Camara Municipal in Espargos, May 2011:

If your annual calcualted tax amounts to over 5.000cve, the law states that you can pay 50% between 1st April – 30th April and then the 2nd 50% between 1st – 30th Sept. (Ref: Article 26).

If the annual amount due to be paid is less than 5.000cve you must pay the full amount in the month of April each year.  

The amount of property tax you pay in April and September, is for the previous year. The tax paid this year (2011) is related to the period from January 1 to December 31, 2010.

If you registered your property for the first time in 2010 you will not have been subject to tax until 2011, your tax for 2010 will be calculated from the date the property was first registered by you as the new owner. Those that registered their property for the first time in 2010 will have to pay the new calculated property tax. The owners that will pay the IUP for the first time this year, will be subject to the new formula for calculating the IUP.

VALUE : The Camara base their calculations on what the owner declared was the valuation of the property for tax purposes when they registered the property.

If you can't remember what you declared as the value, you can contact the Camara and they will be able to tell you what it is.

Prior April 2011, the previous calculation of the annual property tax was:


The value of your property as recorded with the Camara, divided by 20 and multiplied by 3% (in some cases were reduced by over 15% of the costs of conservation).

If you had registered your property pre 2010 and paid IUP on previous years, but not paid any tax for 2010-2011:


Your IUP for 2010 (April 1st 2010 - 30th April 2011)  is still based on the following example:

VALUE  / 20 x 3%

Example:
Value of property: 3000000cve  / 20 x 3% = 4.500cve

COMPARISON:


VALUE e.g.
   OLD SYSTEM
  NEW SYSTEM
 3000000cve
    4500cve    19125cve

Those that have been paying IUP have been subject to the following interest for late payments:

INTEREST AND RELAXATION RATE:
Payment Period
  IUP May
2011
 June

  July

 Aug

  Sept

  Oct

  Nov

  Dec

  Jan

  Feb

  Mar

  April

 Total Interest and Relaxation Rate:- April 2011-April 2012
    TOTAL
 1st Amount April
  9562.5 4%  1%  1%  1%  1%  1%  1% 1%
 1%  1%  1%  1%  15%    10996.88
                                 
 2nd Amount  September
  9562.5



   4%  1%  1%  1%  1%  1%  1%  10%    10518.75
                                 
 TOTAL  19,125  4%  1%  1%  1%  1%  5%  2%  2%  2%  2%  2%  2%  25%    21,515.63

In the first month in which the value is in debt, interest rate and relax is 4% (1% +3%), and that in the months following benefits increased by 1%, cumulatively. The two amounts should be analyzed separately but equally.

 Because there have been problems with the computer system during the month of April, the Câmara decided to extend the normal period of recovery in this year 2011, until the month of May.

So, interest and relaxation rate, will increase only from June of this year (if the owner does not pay tax on time).

New calculation


A new calculation has now been introduced on Sal and I am told, Boavista too. The new calculation will also include the late monthly payment interest (as above).

Reason for the new calculation


The new calculation is not exactly new. The 'new' calculation was actually introduced by the government a number of years ago. The programme that was introduced and adopted by the by a number of Camara Municipals on a few of the islands, including Sal had an error in the calculation, therefor people owning property on those islands who had been paying IUP were not paying the correct amount, they were underpaying.

The error in the calculation was identified last year, this is why the Câmara decided to introduce the new calculation on Sal.

Islands that had not previously introduced the programe for the calculation may have just followed the law which stipulated the correct calculation.

EXAMPLE: Novo calculio de IUP (New calculation for IUP)


From 2011 the correct (new) calculation is:

 
(Value of property x 25%)  x  (1-15%)  x  (3%).

EXAMPLE: 
For the year starting from 1st May 2011 and ending 30th April 2012:
Value of property = 3000000 x 25% x 0.85 x 3% = 19125.00 cve.


OR:   VALUE  x 25% x 85% x 3% = ......................cve

  Or it can be calcualted as follows:
3000000 x 25% = 750.000
750.000 x 15% = 112.500
750.000 - 112.500 = 637.500
637.500 x 3% = 19.125cve



 

I have been informed that this new calculation effects everyone - local people, foreigners, businesses and hotels etc.

If you wish to make further enquiries regarding the above please contact your Management Agency or your lawyer as the information above is meant as a guide only for property owners, the rules could change at anytime from this date without notification.

Please feel free to share this information with owners on Sal, within your resort i.e. Vila Verde, Paradise Beach, Tortuga Beach, Dunas Beach, Porto Antigo (1, 2 and 3) or other.

Camara Municipal


Email contact Camara do Sal for IUP enquiries to : 
Directora dos Serviços de Administração, Finanças e Património :   adelaide.m.l@cmsal.gov.cv  
Please quote:   'Cape Verde Tips - IUP info'  in your email.

If you have property on other islands you will need to contact the Camara Municipal on the island on which your property is situated.

NOTE: Staff at some of the Camara offices may not speak other languages.

Online payments:

The Camara Office on Sal Island has confirmed that payments can be made online.This is the information supplied by the Camara Office on Sal Island regarding making IUP online payments:

'Regarding the payment, people can make international bank transfer to the bank accounts of the Municipality, as long as they want.
We provide the account number and the data, so that they can make transfers.
However, We ask them to send us where the evidence of the transfers, so we can confirm that the value was received on the Camâra Bank’s account, or not.
We also warn that they should always pay the bank charges, because when they do not, value is deducted and the money that goes into the account of the Câmara is less than the debt (the tax), and so it is hard to issue the entire receipt'.

Bank details - Camara Municipal - Sal Island

NIB:  000300000612409610176

IBAN:   CV64 000300000 6124096 101 76

SWIFT:  BCATCVCV

BANK :  Banco Comercial Do Atlantico

Queries, please contact:  CMSAL - Adelaide Lima, Directora dos Serviços de Administração, Finanças e Património : 

Email: adelaide.m.l@cmsal.gov.cv  

Further developments:


The Municipality of Sal, has decided to create the Office of enforcing payment for recovery of debts.

Literature Item


Some information about Cape Verde Tips and the Expats Cape Verde websites:  


Commments from owners:


We have an oceanfront property in Porto Antigo 2 that we bought only in May 2010. 

In April this year, I was in Camara Municipal several times to pay our IUP for the first time. I was quoted the amt. of ESC97.709 and thought this was a mistake. It was too high compared to what other property owners declared to be paying. I know that many have under-declared the value of their property for tax reasons but we did not.

If I think that in 5 years I would be paying some 45,000Eur just in tax, that's already the value of a nice studio flat. I strongly believe that Cape Verde will be killing the "hen that lays the golden egg" by imposing this exorbitant IUP. I can understand that we pay as much in Europe, but we do get a lot in exchange, in terms of communal services i.e. garbage disposal, stable water and electricity supply, good TV program choices, etc. We are already paying expensively in condominium monthly fees. Adding a high IUP tax does not really make Cape Verde living any easier............by Sheilah Kälfors- 22.5.11