The new housing tax package brings changes to IRS, IMT and rents and requires careful financial decisions.
Source: Adobe Stock
Author: Redaction
A new framework for the housing market
The new housing tax package approved by the Government comes in a context of strong pressure on access to housing in Portugal. Rising house prices, high rental costs and expenses associated with mortgage credit make it necessary to create measures that stimulate supply and facilitate access to properties.
This set of tax changes aims to act on several fronts, from the purchase and sale of properties to renting and renovation, through adjustments in taxes such as IRS, IMT, VAT and Stamp Duty. However, the real impact of these measures depends on how they are implemented and on consumers’ ability to make informed financial decisions.
Tax benefits in rental housing
One of the most relevant changes relates to support for tenants. The possibility of deducting rents under IRS remains, but with an increase in the annual limit to 1,000 euros for residential lease contracts.
To benefit from this deduction, it is essential that the contract is properly registered on the Tax Authority portal and that rent receipts are issued. This measure may represent a significant relief for households living in rented accommodation, especially in a context where housing represents a large share of monthly income.
In parallel, the importance of regularising contracts is reinforced, allowing tenants to report rental agreements directly to the Tax Authority if landlords have not done so in time.
Capital gains and reinvestment incentives
Another relevant change concerns the taxation of capital gains from the sale of primary and permanent residences. Until now, there was an IRS exemption when the amount obtained was reinvested in a new primary and permanent residence.
With the new framework, this exemption may also apply to situations where the sale proceeds are reinvested in properties intended for rental housing at affordable or moderate rents, provided that the legal conditions are met.
This change aims to encourage the availability of properties in the rental market, promoting a better balance between supply and demand.
Buying a home with lower initial costs
On the purchase side, the tax package introduces measures that may reduce the initial costs associated with buying a primary residence, especially in properties considered cost-controlled.
In certain situations, there may be an IMT exemption on the first purchase, as well as additional benefits in Stamp Duty. These reductions have a direct impact on the initial stage of the buying process, which is often one of the biggest barriers for families looking to purchase a home.
The real impact depends on financial decisions
Despite the opportunities created by these tax measures, their impact on consumers’ lives is not automatic. The evolution of the housing market will continue to depend on factors such as income stability, access to credit and households’ ability to plan financially. Thus, more than a set of tax benefits, this package represents a change in framework that requires careful analysis. Decision-making must be considered, taking into account each household’s reality and the long-term financial commitments associated with housing.
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