Finance Increases Tax Deduction For Landlords

The tax reform blueprint version presented by the Government in June stated that the profits proceeding from property rental will be assigned to a 50% deduction on the Personal Income Tax. However, the final regulation rises the exemption to 60%.

Although the amendment means improvement inside the reform, in fact it does not change the present situation. Today, taxpayers already enjoys a 60% deduction, paying only 40% of the rental gains. And if their tenant is below 35, the landlords have got a right to a 100% exemption.

The blueprint establishes only one treshold of 60% which does not vary in line with the lessee´s age. As a consequence, the 100% deduction will disappear in 2015.

Moreover, the final regulation to be approved by the Council of Ministers tomorrow still rules out deduction for tenants. Thus, presently, a tenant has got right to a 10.05% tax relief on the rental payment with an annual cap of 9.040 Euros. The removal will not apply to existing rental agreements signed before 2015.

Original article: Cinco Días (by J. Viñas)
Translation: AURA REE

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