Portuguese Government to Offer Tax Exemption for Renting Homes at Affordable Prices

5 December 2017

People who rent part of their home (individual rooms) at affordable prices and with long-term contracts – three or more years – will not be required to pay the 28% income tax on the rent charged.

This measure is to be inserted in the affordable rental program, which is part of the New Generation of Housing Policies, a resolution approved in October that is in public consultation until December 16.

According to the Jornal de Notícias, which cited the Secretary of State for Housing, Ana Pinho, the decree should be ready by March 2018.

The minister revealed that, given the large number of under-occupied houses in the country, it makes sense to extend the affordable lease program – which includes rental prices that are at least 20% below the prevailing market rate – to the shared homes, so as not to limit benefits to owners who can  rent out entire properties.

After the last public session on the New Generation of Housing Policies in Oporto, Secretary Pinho said that the government would “allow under-occupied housing to enter into the rental program, with a legal lease agreement, so that they can lease part of these houses,” the publication reported.

It should be noted that the affordable rental program establishes that landlords who charge a monthly rent that is at least 20% lower than is what is practiced in the market will be exempt from paying IRS on incomes from rents, in addition to benefiting from a reduction in the Municipal Property Tax (IMI) of at least 50%. The Executive now intends to assign the same tax exemption to owners who rent out rooms.

Original Story: Idealista

Translation: Richard Turner