Marcelo Gives Green Light to the Fiscal Package for Rents
The President of the Republic has promulgated the laws that allow the Government to move forward with tax incentives for housing through the revision of the urban planning “simplex”.
Marcelo Rebelo de Sousa promulgated this Monday the law passed by the Assembly of the Republic that authorizes the Government to proceed with the fiscal package for housing. The President also gave the green light to the decree that authorizes the Executive to review the regime applicable to the licensing of urban development operations, to amend the legal framework for urbanization and construction, as well as the legal regime for urban rehabilitation.
In both cases, since these are legislative authorization requests, once the two laws are published it will still be necessary to wait for the corresponding authorized decree-laws. Only after these are also promulgated and published in the Official Gazette (Diário da República) will the measures come into force.
Regarding the fiscal package, it includes several tax reductions, beginning with the VAT applicable to housing construction, which may be reduced to 6%—the reduced rate—provided that the properties are intended for primary and permanent residence and are placed on the market at “moderate” prices. More precisely, this means up to €2,300 in the case of rental properties and up to €660,000 in the case of properties intended for sale.
Landlords will also be able to benefit from an income tax (IRS) rate of only 10%, provided that the rents charged fall within the aforementioned moderate range. If the owner of the rented property is a company—or a self-employed professional operating under organized accounting—only 50% of the rental income will be taken into account for tax purposes.
The decree concerning urban planning licensing simplifies a set of rules and, in particular, reduces the deadlines within which municipalities must respond to urban planning licensing requests.
In both cases, the Government’s objective is to encourage housing supply, hoping that these measures will bring more homes to the market, whether through rental, rehabilitation, or the construction of new housing units.
Reference link: https://www.jornaldenegocios.pt/economia/detalhe/marcelo-da-luz-verde-ao-pacote-fiscal-para-as-rendas
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