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Legislative Housing Package Includes Powerful Tax Incentives

23 April 2018

The Portuguese Prime Minister announced today a possible reduction to the withholding taxes charged to landlords entering into long-term rental contracts and the renewal of contracts for the elderly and disabled.

António Costa presented these measures at the end of the session dedicated to the Portuguese government’s new legislative package entitled “New Generation of Housing Policies”, after speeches by Secretary of State Ana Pinho and Environment Minister João Pedro Matos Fernandes.

In his speech, the Prime Minister criticised “the enormous instability” associated with the current urban rental program and proposed a tax incentive that would grant owners a 50% reduction to their withholding taxes, from 28% to 14% when applied to rental contracts that exceed ten years.

“This withholding rate should fall to 10% for contracts that exceed 20 years,” António Costa added, subsequently denying that the government is encouraging “the administrative fixation of rents or rental periods.”

“It is an appropriate incentive for the parties to negotiate,” the prime minister countered at a session in which the independent socialist MP Helena Roseta, the author of a housing law bill, was sitting in the front row of the audience.

In addition to this tax measure, the prime minister spoke next about the elderly, “who have the right to live until the end of their days in the house where they have always lived.”

“We will also propose to the National Assembly that those over 65, and citizens with more than 60 percent disability – and who have lived in their homes for a significant number of years – necessarily have the right to contract renewal,” he announced.

Original Story: Lusa / Diário Imobiliário

Translation: Richard Turner