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 Tax and Customs Authority will now include appliances, machines and other equipment designed to capture and utilise energy in the reduced VAT rate of 6%. This change includes not only the purchase of this type of equipment, but also its installation, repair and maintenance. By reducing the tax, an incentive is created for Portuguese families who dont yet have this type of appliance in their homes, facilitating access through a less significant investment. In the circular published by the Tax and Customs Authority, the reduced VAT rate covers the acquisition, supply and installation, maintenance and repair of appliances , machinery and other equipment intended exclusively or mainly for the capture and utilisation of solar, wind and geothermal energy and other alternative forms of energy. This includes, for example, solar, thermal or photovoltaic panels, wind turbines and heat pumps , which also include reversible air conditioners. On the subject of sustainability, we recommend New energy efficiency directive receives EP approval , Renewable energy community: Coimbra presents proposal and Energy certificates: how they work and their importance
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 Buying a house at auction can involve a series of precautions that well alert you to in this article, explaining exactly what this type of business consists of. Were talking about houses that have been put up for sale following foreclosure proceedings against the state, banks or other organisations. Often, these are properties that, due to non-payment, have been taken from their owners or handed over to organisations to sell in order to pay off debts, which involves a series of legal processes. Which organisations use auctions for seized houses? Banks or financial institutions Youll find houses in this situation mainly on the websites of banks and other financial institutions , since they are the ones who take ownership of the property in cases where the owner defaults on their mortgage payments. The property is the guarantee, and once the agreement stipulated in the loan has not been met , it is the bank that gets the house. In this situation, it puts it up for sale again, either by using the property market to sell it or by holding auctions. In this situation, banks can offer lower spreads and the total amount of the financing of the amount requested for the house , offering special conditions to facilitate the sale. Tax and Customs Authority Another organisation that can put houses up for auction is the Tax and Customs Authority (AT), in situations similar to those that occur with banks - by failing to pay the tax authorities, taxpayers can have their properties seized. In the case of the AT, there is either a closed letter proposal or private negotiations. Social Security Like the AT, when there are debts, this organisation has the power to seize property from debtors and sell it through public tenders. These are held annually. Order of Solicitors and Enforcement Agents (OSAE) The OSAE has developed the e-leilão website, where it sells houses that have been seized in enforcement proceedings. Town halls Council houses can be sold at public auction. What do auction sales involve? Depending on the situation, which will vary according to the entity holding the auction, the auction may be scheduled in advance, usually through specific media such as specialised websites or newspaper advertisements. Immediately prior to the auction, there will be a public display of the goods to be auctioned so that potential buyers can examine and evaluate them. It is at this point that interested participants are required to register in order to take part. To complete registration, they must provide their personal information and, in some cases, deposit a sum of money as a guarantee. If you dont buy any goods, this deposit will be returned to you and, on the other hand, if you complete the deal, this amount will be taken as part of the down payment on the property, in whole or in part. On the day of the auction, the items for sale are presented one at a time by the auctioneer, allowing potential buyers to bid a price. When the highest bid is reached, the auctioneer declares the item sold to the winning bidder. However, before all this, there are a few things to be aware of: See all the propertys characteristics Before going ahead with any purchase offers, make an assessment of the property you are interested in. With prior notice, request a visit to the house and speak to the real estate agent, as what is portrayed online does not always correspond to reality. Make sure youre making a good investment. Buying auction prices with market prices Despite the special conditions often offered at auction, this type of purchase may not pay off when comparing asking prices with market prices for properties with the same characteristics . Do your research and evaluate all the options. Ask for the propertys Certificate of Title Its important to realise that the property you want to invest in has no associated charges, especially in the case of an auction sale, where there are often associated liens and mortgages. So, to make sure youre buying a house free of encumbrances, you can go to the Land Registry Office and request the propertys Certificate of Title. This request can also be made online, but there is always an associated cost. Check if there are tenants in the property or if there are heirs who can claim it This is a measure that could save you headaches in the future. Make sure that there is no one who can claim the right to the house you want to buy , such as tenants or heirs to the property - or even the spouses of the owner of the seized house. If there are tenants living in the property for more than two years, they can exercise their right of first refusal and, in the case of heirs (spouses, children and parents), they can exercise their right of redemption to buy the house. How does bank financing work? If you end up buying a property at auction, you will have to sign a Promissory Purchase and Sale Agreement, thus formalising the transaction. However, if you need a mortgage to make the purchase, you should first ask for pre-approval of the loan before committing to any deal. Ideally, you should do this before even registering for the auction, regardless of whether or not you know the value of the property, in order to check that you meet all the conditions necessary for the loan to be granted. Buying a house at auction is a simpler process than it looks , requiring only a few standard procedures when it comes to participating in the auction itself . For the rest, it resembles a traditional buying process. If you have any doubts, we recommend you read the following articles : Donation in life or receiving an inheritance: tax implications , What is Usucaption?
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 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 The three-month deadline for taxpayers to reinvest gains from the sale of property in the amortisation of the loan for the house they live in, without incurring taxation, may be extended until March 2025 , according to the Tax Authority. This opportunity for exemption from IRS taxation for profits from the sale of property, such as building plots or homes, is provided for in the Mais Habitação legislation. To qualify for this exemption, the sale of the land or homes must take place between 1 January 2022 and 31 December 2024 , and the proceeds of the sale must be reinvested in the total or partial repayment of the taxpayers own permanent housing loan or that of one of their descendants, within three months of the date of sale. In a communication to the services and in order to ensure the consistent application of the new rules established by Mais Habitação regarding the taxation of capital gains, the Tax and Customs Authority (AT) clarifies that the amortisation of any loan taken out for the acquisition of the property and the application of the realisation value (possibly deducted from that loan) can, at the most, be carried out until March 2025 . This understanding stems from the fact that the loan must be amortised within three months of the sale , and the capital gains tax exclusion regime applies to sales made between the beginning of 2022 and the end of 2024. In addition, the AT clarifies that the exclusion from capital gains taxation applies even when the taxpayer reinvests only part of the amount obtained from the sale in the amortisation of the loan , either because that is their intention or because the credit is less than the amount generated by the transaction. In such cases, the exclusion from taxation only applies to the proportional part of the profits corresponding to the amount reinvested. This regime applies regardless of whether the sale of one or several plots of land or residences is involved, as the realisation value of a property sold (or several) can be distributed to amortise housing loans intended for the permanent residence of several eligible beneficiaries. This means that, in a family where more than one person has a loan for their own permanent home, the money obtained from the sale of land and homes can be used to amortise several loans , as the scheme allows for the amortisation of any housing loan intended for own permanent home. The Tax Authority has previously clarified that, in cases where the sale of these types of property took place before Mais Habitação came into force (October 2023) and capital gains tax has already been paid, taxpayers can request a refund of the tax paid by submitting a replacement declaration for IRS Model 3 . This request can be made within two years of the end of the legal deadline for submitting the tax return, or within the same deadline for submitting an administrative claim, as provided for in the IRS code, generally until the end of June 2025. Also read: Selling on Real Estate Portals: 3 essential reasons , More families opt for mixed rates on home loans and Public tenders for housing are not attracting candidates
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 Theres still time to validate all invoices with a tax number on the Finance Portal , via e-Fatura. This way, youll be able to take advantage of the IRS deductions to be declared this year, relating to income in 2023. You have until 26 February to do so. Communicating your household Dont forget that you have until 15 February to report any changes to the composition of your household (change of residence, marriage, divorce, etc.). It takes no more than 2 minutes on the Tax Office Portal. How to validate invoices To validate invoices correctly, simply access e-Fatura and associate the sector of activity with the respective invoices , indicating, in the case of green receipts, whether the expenses are related to the exercise of the activity to which it is associated, in whole or in part. Read more about: Taxes: until when can you validate IRS invoices? , Tax authorities issue warning about new IRS discount rule
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