Cabo Verde- Single Property Tax (IUP)
Understanding the Imposto Único sobre o Património (IUP)- Single Propery Tax
As a foreign real estate buyer in Cabo Verde, you'll encounter the Imposto Único sobre o Património (IUP)—the Unique Property Tax—early and often. It's essentially the annual "ownership fee" for your property, similar to property taxes in the US or council tax in the UK, but simpler and lower. Managed by the Tax Authority (Autoridade Tributária - AT), it funds local services like roads and schools. It's not a one-off purchase cost (that's the transfer IUP at 1.5% during closing, as mentioned in the buying guide), but an ongoing annual obligation starting from the year after you acquire the property.
Don't worry—it's straightforward, affordable (often under €500/year for mid-range homes), and payable online or at local offices. Foreigners pay the same as locals, with no residency requirement to declare it. Below, I'll break it down for buyers, including how it ties into your purchase.
What is the IUP and Why Does It Matter for Buyers?
Scope: Applies to all real estate (buildings, land, apartments) and even vehicles, but for property buyers, it's focused on your new asset. It replaces older fragmented taxes, making compliance easier.How It's Calculated
The tax is based on the Valor Tributário (VT)—a government-assessed taxable value, usually 50-70% of market price to keep it fair. (Your lawyer can request a VT update post-purchase if values have risen.)
Formula : IUP = VT × Applicable RateRates (as of 2025; set by municipalities and subject to minor annual tweaks)
Payment and Declaration Process
Declare the Purchase : After closing, your lawyer submits the deed to the AT via the Land Registry (integrated in registration). If not, you do it yourself within 30 days to avoid fines (up to 100% of the tax).In person: At AT offices, banks, or Casa do Cidadão balcões.
Bank transfer: To AT accounts (details on notice).
Penalties: Late payment adds 2-10% interest; undeclared properties can lead to audits.
Time/Cost: Declaration is free; payments are straightforward with English instructions online.
Exemptions :
New Builds/Investments: 5-year IUP holiday for tourism properties (e.g., if you buy and rent via an Lda company—apply through BUI at CV TradeInvest).
Residency Link: Golden Visa buyers (€200,000+ investment) often bundle IUP exemptions into their deal.
First-Time Buyers: Rare, but diaspora Cabo Verdeans may qualify for reductions
No Tax on Sale: IUP isn't a capital gains tax; that's separate (10% on profits if reselling).
Get a temporary break from paying the Imposto Único
If you buy a property and use it for tourism (like renting it out to vacationers or running a small hotel), the government can waive your IUP payments for the first 5 years. This is a perk to boost Cape Verde's tourism economy, which drives 25% of GDP. It's not automatic—you have to qualify and apply—but it's a big win for foreign investors, saving €250-1,000+ yearly on that tax.
Who Qualifies?
This exemption comes from the Investment Statute (Estatuto dos Benefícios Fiscais, updated 2023) and targets "tourism projects." Key rules:
Not pure personal homes—though you can convert a residential buy if you rent it out seasonally.
Investment Size: Often starts at €100,000-200,000, but smaller setups (e.g., a €50,000 apartment turned rental) can qualify if they create jobs or boost local tourism.Where to Go for Help as a Foreigner
Casa do Cidadão: Start here for NIF setup and initial declarations (balcões on Sal, Boa Vista, Santiago—e.g., Espargos on Sal for quick service).In short, IUP is a low-maintenance "welcome fee" that keeps your ownership legit without surprises. For your book, emphasize it's a pro-Cape Verde feature: transparent and revenue-neutral compared to higher EU taxes. Track updates on at.gov.cv, as rates are reviewed yearly. If buying for rental income, factor it into yields (net ~4-6% annually). Questions on specifics?