Source: Freepik Author: Redaction The Tax Authority (AT) clarified last Friday, April 5, that the rents paid in s ocial housing are also included in the IRS deductions, provided that up to the limit of 586 € . Moreover, it informed that if the values do not appear automatically in the income statement, the tenant must enter them in Annex H of the model 3 declaration. Leasing contracts for urban buildings belonging to local authorities, concluded under the rent-supported regime [...] are subsumed under the legal regime established by the New Urban Lease Regime (NRAU), and, in these terms, the value of 30% of their rent, be deducted from the IRS collection of the respective tenant, up to the limit of 586 euros , indicates the TA. This clarification was passed after a request for information launched by a tenant about the possibility of inserting social housing rents in the Portal efatura, for the purpose of deducting expenses in the IRS. Thus, the amount to be deducted from the tax on expenditure on social housing rents is higher than the amount deductible with benefits outside the supported scheme. Therefore, in the normal system, tenants can deduct 15% of the rent costs from the tax payable, up to the limit of 502€, while social housing rents are deductible up to 586€, with a 30% discount. Also find out about New rate of 25% will cover all rents received in 2023 and VAT reduction for housing: APPII is happy with proposal
Source: Freepik Author: Redaction The Portuguese Tax Authority (AT) has released last years income statistics for 2022, making it possible to analyse the income earned by families that year , as well as the number of households that had to pay IRS or didnt even declare income. According to the statistics, in 2022, 5,807,704 Portuguese families submitted their annual income declarations to the IRS. Of this total, 42.4 per cent didnt have to pay IRS , which represents a universe of more than 2 million taxpayers exempt from paying the tax. The remaining 57.6 per cent had to pay 16,292 million euros , representing revenue for the state of 1,462 million euros more than in 2021, and 3,132 more than in 2020. It was also possible to conclude that, in 2022, only 70,000 households earned more than 100,000 euros gross per year . With regard to the distribution of the number of households with IRS paid, divided by income brackets, 74.2 per cent declared a gross income of between ten thousand and 40 thousand euros. But it was households with gross incomes between 13,500 euros and 50,000 euros that paid the highest percentage of the tax, which represents 7,022 million euros. The remaining revenue comes from households with incomes of more than 50,000 euros, with the tax paid in 2022 by this total of families reaching 7,789 million euros, or 48 per cent of the tax assessed and 986 million euros more than the same year last year. Number of families submitting tax returns is up According to AT data, between 2020 and 2021 the number of families who filed their tax returns increased by around 6% and, between 2021 and 2022, the growth was around 4.17%: this growth in the number of tax returns is due to the 3.35% increase in Model 3-1 tax returns [dependent work and pensions only], and the 5.78% increase in Model 3-2 tax returns [dependent work, pensions and other income], the AT states. It was also possible to conclude an increase in gross household income , with more families earning more than 100 thousand euros. In 2022, gross income rose by 9.25 per cent, the year in which the national minimum wage was increased by 40 euros. Read more: Inflation in Portugal rose 2.3 per cent in March, above the EU average , More than 400,000 personal income tax returns have already been submitted
Source: Freepik Author: Redaction The official figures available show that almost half a million IRS returns were filed on the first day of the filing deadline , which opened on Monday 1 April. By 1am yesterday, 2 April, just over 24 hours before the deadline for filing the annual IRS tax return, the Finance Portal had already registered 494,066 tax returns. Of these, 408,857 were from taxpayers who, in 2023, only collected income from dependent labour, i.e. category A, or from pensions, i.e. category H. The number of returns submitted by taxpayers with other types of income, according to the Finance Portal, was around 85,000. However, in either case, the figure includes the approximately 40,000 returns previously submitted this year, which relate to replacement returns or the first instalments of income from previous years, which are excluded from the current IRS campaign. Remember that the deadline for submitting your personal income tax return is 30 June , and you have three months to do so on the Finance Portal. By 31 July, as the law dictates, assessments must be completed and refunds paid by 31 August. Explore SUPERCASA Notícias and find more topics like this one
Source: Freepik Author: Redaction This Monday, 1 April, the IRS tax return for income earned in 2023 began to be submitted on the Finance Portal. The calculation is made on the basis of withholding tax, taking into account the income that is subject to this tax, and the deductions have changed as a result of the State Budget law for 2023, by updating the taxable income brackets. As a result, the annual accounts of individual taxpayers will be adjusted, which may or may not result in a reduction in the refund , applied to salaries from employment and pensions. According to the Ministry of Finance, the average time taken for a refund last year was 19.5 days and 16 days for the automatic IRS , with the refund being paid more quickly once the tax return has been submitted, although it is advised not to submit it in the first few days. The ideal is to avoid the first and last days of the deadline, as corrections may have to be made. National Association of Accountants warns that haste is a bad counsellor The deadline for submitting the IRS tax return isnt until 30 June and, with taxpayers having to spend three months submitting the return on the Finance Portal, i ts advisable not to rush to submit it in the first few days, as there may be corrections or system errors and failures that could compromise its correct validation. The National Association of Accountants (ANC) warns that haste is a bad counsellor, so taxpayers should instead make sure they have all the information they need to fill in the declaration properly . And they add: sometimes there are things that dont pay tax, but that need to be declared, emphasises Vítor Vicente, President of the ANC. Therefore, to avoid these constraints, taxpayers should check that the data on automatic expenses, health, education, uploaded to the system throughout the year and then validated or not, is correct . If they arent, they can still be validated, but not automatically, and all the amounts will have to be uploaded one by one. The ANCs advice is that its best to let a few days pass , and only then start the process: sometimes, in some income categories, everything isnt right from the start. If you wait a few days, you wont lose anything. Other current news: National public debt fell again in February , Rental market in Portugal grows by 4.5% and Social tariff for natural gas: 3.1% discount to be maintained
Source: Freepik Author: Redaction If you have not done so, know that you have until next Sunday to donate 0.5% of your IRS collection to an entity of your choice , such as kindergartens, victim support associations, social institutions, volunteer firefighters or homes. The list, which can be consulted on the website of the Tax and Customs Authority, includes 5,037 entities. This IRS consignment takes place every year before the filing of the declaration, which begins as of next Monday, April 1, without any impact on its reimbursement. So, if you are thinking of donating this portion of your IRS, you only have to point out the NIF of the entity to which you want to make the consignment, fill out your IRS declaration 2024 in the Finance Portal and select the option Consignment of 0.5% IRS , selected, then the type of beneficiary entity and the NIF of the entity. Then, just select the IRS option. You can also pay VAT by selecting the IRS option, however, this already impacts your refund. What is the 0.5% IRS consignment? This is a mechanism that aims to help and support entities with an active and relevant role in the community in which they operate . Through this consignment, they can obtain funding for their actions, with the money donated to be removed from the tax due to the State, without any impact to the taxpayer. The consignment of VAT, on the other hand, already implies that the taxpayer abdicates part of his refund , which would eventually be paid by the tax authorities. It is important to note that this consignment should be made until March 31 for taxpayers who are covered by the automatic IRS and who wish to change or add the consignment to an entity of their choice, because if they do not do so, the provisional declaration developed by the Tax Authorities becomes definitive. And remember: the delivery of the IRS statement starts already on April 1, next Monday, having until June 30 to make the submission. The IRS refund will be paid by the State until the end of July. Keep abreast: Natural Gas Social Tariff: 3.1% discount will remain , Public Administrations achieved positive balance in 2023 and Change of time occurs next Easter Sunday
Source: Freepik Author: Redaction As indicated by the Tax and Customs Authority (AT), the IRS rate borne by landlords who do not choose to encompass the income at the time of filing the IRS statement becomes 25% , and includes all housing rents that have been received over 2023 in leases of less than five years. The new rate of 25% provided for in paragraph 2 of article 72 of the IRS Code will apply to all real estate income resulting from housing lease agreements received in 2023 , explains the AT. Provided for in the More Housing Law, the special rate on housing rents, before 28%, thus falls to 25% and only excludes rents that previously benefited from an IRS rate below 25%, maintaining the most favorable tax regime. Property income resulting from permanent housing leases for less than five years that already benefited from a lower IRS rate, shall keep this rate lower until the end of the contract or until its renewal, depending on what happens first , he concludes. On the other hand, the rate of non-residential rent is maintained at 28% , corresponding to the level that results from it when there is the inclusion of income. Continue reading, on this topic: Landlords who have not raised rents will have discount in the IRS
Source: Freepik Author: Redaction Moving forward with works at home requires, from the outset, a good available budget and some patience , and it can be a complex process and with some associated concern, since unforeseen events can always appear that force you to spend more money. However, you do not need to be apprehensive, because there are tax benefits for certain properties that are subject to rehabilitation , and which we are making known today. If you are reading this article because you are selling your home and would like to improve it in order to increase its sale value and attract potential buyers , we suggest reading the article 4 essential valuation strategies in selling a house . And if you are in fact planning to move forward with works or renovations , you will find here all the necessary information about the expenses you can count on, charges and possible tax benefits. Get to know it! What is the first step before the work? Before hiring a team or construction company, we advise you to ask for different budgets . This is step number one when it comes to contractors, whether in your home or any other building that needs interventions. Any person responsible for the property, should start by asking for different budgets, contacting different professionals, and ask them for a complete evaluation of the specifications: how long the work will take, how much it will cost, what materials will be needed and what is the feasibility of the intervention. Based on the various scenarios, when analyzing the proposed budgets, you will have an initial perception of how much money you should have available for the renovations you want to perform in your home, preparing also for potential unforeseen and acquiring knowledge of the prices that are practiced in the market, for a better decision about which company is ideal to perform the work . It is important that you only consider budgets that already include VAT, because without this tax the value will be higher in the end, and may surprise you at the time of payment. When considering VAT, you get a real sense of the final value, being able to make adjustments to the materials contemplated according to the limit you have in your budget. A few points to remember: • You should not accept a budget just because yes , however, if you exceed the deadline that determines the period in which the conditions presented to you are valid, there may be changes and adjustments that were not contemplated. • To formalize the acceptance of the service ask for a written agreement to safeguard your rights - you can, in this case, sign the budget document, asking for the signature of the entity that will do the works, and this officialization makes the document a contract. • After all completed - contract, payment - an invoice must be issued . What fees are associated with construction costs? It is normal that the rates vary according to the type of goods or services provided, however, the Value Added Tax will be one of the taxes that will always have contemplated, varying its value. • In the case of a labour service, the 6% VAT rate will be applied; • Building materials are covered by a standard VAT rate of 23% (excluding value less than or equal to 20% of the total cost of the work; • For other complementary services, namely cleaning, maintenance of green spaces or other maintenance, the applicable VAT rate is 23%. It is most likely that different VAT rates appear on your invoice, and products and/or services in this situation should be identified separately. Note that the invoice must include the identification of the company providing the service , the identification of the customer , the detail of the goods and services invoiced, the dates on which the goods and/or services were delivered and the dates on which the payments were made, prior to the completion of the operations, if the date is not the same as the issue of the tax document. Know the tax benefits associated with the remodeling of a property Probably did not know, but the truth is that the rehabilitation of real estate can be associated with several tax benefits , namely through the reduction or exemption of VAT, IMI, IMT and IRS, generally applicable to properties located in Urban Rehabilitation Areas (ARU). With each benefit, there are criteria that we explain: VAT The lowest tax rate, of 6%, can be applied, according to the VAT Code, to contracts in real estate located in areas classified as ARU and to contracts carried out in real estate related to housing. IMI In the case of the Municipal Real Estate Tax, the exemption can last up to 3 years , in the event that the property targeted for rehabilitation is older than 30 years or is located in ARU, being exempt from paying the tax. IMT As with IMI, with the Municipal Property Transfer Tax you can also benefit from an exemption, in this case, if you buy a property with more than 30 years or that is located in an ARU, provided that it initiates rehabilitation works within 3 years from the date of purchase and, in case the property is already rehabilitated, is intended for the owner’s own and permanent housing, or even rented for this purpose. In the case of IMI and IMT, the benefits are still conditioned by the levels of conservation status, which must be improved, as well as a positive assessment and good requirements for energy efficiency and thermal quality. IRS In the IRS, there are some benefits associated, and in the case of the charges for the rehabilitation of real estate there may be a tax discount that reduces up to 30% of the expenses , up to the limit of € 500 if the property is located in an ARU and is recovered under the rehabilitation strategy - these are deductions applicable not only to works for own and permanent housing , but also to properties for rent. Then, in addition to the discount, you can deduct the expenses paid for maintenance and rehabilitation works in the properties for rent in Annex F of the IRS declaration, which concerns real estate income, provided that they are carried out up to 2 years before the start of the contract. Finally, associated with the IRS, it can obtain benefits generated by capital gains, provided that the property has been sold after the rehabilitation works, if it is located in an ARU and has an autonomous tax rate of 5%. In this specific case, the condition to receive this benefit is that the works have left the property in a state of conservation up to at least 2 levels above what was verified before the intervention, as well as a level of conservation, at least, Good. Are you ready to move forward with the redevelopment now that you know all the associated benefits, charges and taxes?
Source: Freepik Author: Redaction Announced at the same time as the rent brake applied in 2023, the compensation to landlords who did not change the value of rents in 2023 serves to mitigate the effects of the rise in inflation recorded so far , in practice being a discount on the value of income taxed in the IRS. This compensation mechanism can be used by owners who, by the rent brake standard implemented in 2023, have limited the update to 2% . This is compensation automatically applied by the Tax Authority (AT). In the case of a monthly rent of 500€ in a lease for a period of one year, renewable, the landlord could have increased to a maximum of 510€ in 2023, to instead of paying IRS on the amount of 6,120€, be taxed at 5,569.20€. However, it also applies to landlords who did not move the rent amounts, and in this example, the IRS will focus on € 5,460 instead of the previous € 6,000. These examples include gross values and do not include expenses that are to be deducted, such as rates, condominium charges, taxes such as IMI or works expenses in the rented fraction, to which the official source of the AT indicates: landlords who in 2023 did not make any increase in income benefit from the support coefficient provided that the other conditions are met. They add: the application of this coefficient is carried out by the TA automatically, based on the declaration in model 3 of 2023, in Annex F, Squares 4.1, 4.2, 4.3 and 5 (depending on the type of contract in question), as to whether the rents were or not, with a coefficient equal to or less than 1,02 . What are the conditions required to benefit from the compensation scheme? As stipulated, in order to benefit from the compensation mechanism, the rents due in 2023 in question must be paid and result from lease agreements in force before 1 January 2022 , duly communicated to the TA, and whose updating has not resulted in a value higher than the 2% limit stipulated by the Government. Calculated by the AT, this compensation should be calculated at the time of filing the IRS statement regarding last year’s income, which begins on April 1 and ends on June 30. Read also: IRS: learn how to deduct rental expenses , Salary cap for access to affordable rental increases and Security deposit is not considered taxable income at source of IRS
Source: Freepik Author: Redaction Expenditure on housing rents paid during 2023 can be deducted from this years IRS. To do this, it is crucial to ensure that all rent receipts are duly registered in e-Fatura . If the electronic receipts are not visible on the Finance Portal, there is no need to worry, as many of them were only available until 15 March. In e-Fatura, the information on electronic rent receipts may not be immediately visible in the tiles related to provisional IRS deductions or IRS deductible expenses. The Tax and Customs Authority (AT) explains that when you hover over the Housing and Real Estate tiles, you may see the message Electronic rent receipts not yet included. The lack of information on electronic rent receipts issued by the landlord in e-Fatura should not alarm taxpayers , since the information will be made available by the Finance Portal by 15 March of the year following the issue of the documents, as the AT explains. This information is crucial for tenants or those who lived in rented accommodation last year. House rents are tax deductible up to a maximum of 502 euros and can significantly influence the amount you pay or receive in your tax refund. Its important to note that with the State Budget for 2024, the limit for the deduction of rents in the IRS will increase from the current 502 euros to 600 euros, which will be applied to the IRS to be filed in 2025. Follow these and other topics in SUPERCASA Notícias
Source: Freepik Author: Redaction The deadline for validating invoices that allow you to benefit from IRS deductions is today, Monday 26th February! All invoices relating to health, education, housing and homes can be entered on the e-Fatura website and benefit from deductions in Personal Income Tax (IRS), provided they are correctly classified. Many of the invoices are automatically entered into the Finance Portal, but there are many others that youll have to enter manually yourself. To do this, all you have to do is log into e-Fatura, access the acquirer area, select the option to check invoices and, from there, consult the ones you have already validated or enter new ones. This is also possible via the official app, which you can install on your smartphone. If you have children, you should also check their invoice pages and validate them correctly so that they can be inserted into their respective categories. If you havent already done this validation, hurry up and complete it to regularise your tax situation!
Source: Freepik Author: Redaction The Ministry of Finance confirmed on Monday 6th February that automatic IRS will be extended to subscribers of Social Security retirement certificates, commonly known as State PPRs . This option has already existed since 2019 for taxpayers who have investments in private retirement savings plans (PPR). Following a path of support for voluntary compliance and broadening the universe of automatic IRS declarations, taxpayers who have investments in individual accounts managed under a public capitalisation scheme are now included, announced the official source from Fernando Medinas office. As a result, subscribers to these investments in a state pension plan are in a similar situation to subscribers to classic PPRs. On 1 February, a regulatory decree had already been approved that establishes the universe of taxpayers covered by the automatic income declaration, broadening the scope of the decree that was regularly in force , as was stated in the press release published at the time. Go to SUPERCASA News to find out more about current affairs
Source: Freepik Author: Redaction The rental of property almost always presupposes the advance payment of a security deposit , which serves to safeguard contractual requirements, as a guarantee. It is negotiated between both parties and returned at the end of the contract if all the agreed criteria have been met. The deposit has been considered to be property income subject to IRS by the tax authorities, however, the arbitration court has now clarified that, in fact, this payment is not subject to IRS, as it is not considered to be truly income. The security deposit is not truly income, neither from a civil law perspective, nor from an economic perspective, since it does not truly form part of the assets of its beneficiary, the arbitration court clarifies. Therefore, even when it is paid when renting a house or commercial property, it is not covered by the IRS. This was the decision shared in a case brought by a landlord before the Administrative Arbitration Centre (CAAD) . In this particular case, a company had rented a rustic building, asked for a deposit and failed to include it in its personal income tax return, which led to an additional tax assessment by the tax authorities of more than 160,000 euros, plus compensatory interest totalling 21,000 euros, after the respective inspection. What was decided, following the arbitration courts decision in October last year, is that this landlord will recover the 180,000 euros , as it was a decision that the tax authorities did not appeal, despite the fact that the tax authorities understanding ends up contradicting the circular that has been circulated since 2018, which states that anyone who receives a deposit must pay IRS, even after the amount has been returned. If the deposit is returned, the amount can be considered an expense for the landlord for IRS purposes. Find out more: Are you going to be a tenant? Care to take before and after , Subletting rules: get to know them all and Compulsory insurance for landlords and tenants: find out more
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