Source: Freepik Author: Redaction Last Thursday, 28 March, the National Statistics Institute revealed data on the rental market in Portugal , which grew by 4.5% in 2023 compared to the end of 2022. At the end of last year alone, 23,637 new rental contracts were signed, despite an 11.6 per cent increase in rents over the same period. The year-on-year change was thus higher than that seen in the previous quarter, at 10.2 per cent, the sharpest since 2020. According to INE, the median rent for new rental contracts reached 7.71 euros per square metre in the fourth quarter of 2023, representing the highest value in the last four years , and an increase of 11.6% year-on-year, the highest variation since the first quarter of 2020. Compared to the previous quarter, according to the Portuguese statistical office, the median income for the fourth quarter of 2023 increased by 6.6 per cent. Thus, although more families have signed leases despite the rise in prices, the reality is not uniform across the country, with 6 of the 26 sub-regions seeing year-on-year falls in the number of new contracts signed, with the most striking case being in the Douro , with a drop of -13.3 per cent. On the other hand, with growth of over 15 per cent, the West (22.8 per cent) and Baixo Alentejo (15.8 per cent) stood out, says INE. Greater Lisbon and the Oporto Metropolitan Area, without bucking the trend, accounted for 41.7 per cent of new contracts signed. Want to know more about the property and rental market in Portugal? See: New 25 per cent rate will cover all rents received in 2023 and Overcrowded homes: figure is at the highest level since 2010
Source: Freepik Author: Redaction Data from the Survey of Living Conditions and Income released by the National Statistics Institute (INE) confirms the increasing difficulty of buying or renting a home in Portugal, both because of the scarcity of available homes and because of the high prices. These factors have affected families from all walks of life, especially young people, forcing many people to move back in with their parents or share rooms with their children. According to the figures, in 2023, one in five families lived in a property without enough rooms for the number of people in the household . Thus, 12.9 per cent of the population lives in overcrowded housing , of which 21 per cent are young people and 14 per cent are adults. The rate of housing overcrowding increased last year by 3.5 per cent compared to 2022, and is already the highest since 2010, when it stood at 14.6 per cent. The increase can be explained by the fact that many of these families were forced to sell their homes and, without finding an alternative they could afford, ended up in a situation of overcrowding. Other situations may be due to forced evictions from homes where landlords have not renewed contracts. The fact is that between 2022 and 2023, the number of people living in overcrowded situations rose by 37 per cent , which is 370,000 more people than the previous year. Read on: Property scams: what you need to do to avoid this situation , Fewer residents in Portugal bought a house in 2023 or Median bank valuation increased by €10 in February
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
Source: Freepik Author: Redaction If youre looking for a house to rent, there are some important points to bear in mind when taking this step. See below the tips that SUPERCASA Notícias brings you. Filter your searches You can start by doing a search on property portals, where you can filter the search by various characteristics (we suggest two national ones: SUPERCASA and CASASAPO ) , to see what you like best and what matches what youre looking for: house? Flat? What type? Do you want the house already furnished or not? Rent Another important point, which you should take into account in your search, is: how much rent can you afford and are you willing to pay? Evaluate the impact this will have on your financial and family budget. Consider that the effort rate should not exceed 35 per cent. See if it really pays to pay a rent that is beyond your means. Location The area where you are going to rent a house is important, as you will have to see what is ideal for you: is it close to essential services (schools, work, supermarkets, hospitals)? Is it quiet, with nature or parks and gardens nearby, or is it in the city centre? If its far away, take other expenses into account, such as the fuel youll spend to get around, or the cost of a monthly transport pass. Visit the property To make sure you make the right choice, make an appointment to visit the various properties youre interested in . You can take the opportunity to ask the owner of the property or the real estate agent who is helping you for more information and some documents about the property, such as the owners identification, land registry and certificate, energy certificate, licence to use or fire risk insurance. Take advantage of the visit to analyse the property in detail, especially its condition, and clarify any doubts that may arise. Analyse and read the rental contract carefully As we mentioned above, before signing the contract, make sure you have copies of some official documents: Condominium regulations (if applicable); Identification of the owner; Land registry certificate; Caderneta predial; Licence to use; Energy certificate; Compulsory fire risk insurance; Make sure that the contract contains all the important information: Identification and details of the landlord and tenant; Amount of rent and method of payment; Authorisation to carry out work and identification of the person doing the work; Who pays the common expenses (stairs, lift, gardens, etc.) Identification of guarantor (if any); Whether or not you can have pets; Duration of the contract and time limit for cancellation; Annex to the contract with a list of goods and their condition; Date, time and place and signatures. Dont forget to also check the rent update regime, carefully review the contract and clarify any doubts you may have. Read more about: Renting a house: how to find a good tenant and Compulsory insurance for landlords and tenants: find out
Source: Freepik Author: Redaction The start of the annual IRS tax returns is just around the corner, and the Portuguese have to fill them in between April 1 and June 30 with their 2023 earnings. However, there is news: the changes introduced to the IRS Code will begin to have an impact on tax returns this year, which well explain in this article. This Friday, February 2, the new Model 3 forms were published in the Diário da República , two months before the deadline for submitting the IRS declaration and, among the various new features, we highlight the increase in the tax on speculative income and the tax relief on rents from long-term housing contracts. Find out more about all the changes: Capital gains generated by the sale of assets are now included Capital gains generated by the sale of assets must now be included in the tax return if they have been held for less than a year and when the taxpayer has very high income, corresponding to the last IRS bracket, i.e. with annual gains of more than 78,834 euros. In this way, the profit obtained from the sale of the securities will be taxed at an autonomous rate of 28%, or 35% in the case of tax havens, to pay the maximum tax rate of 48%. Thus, these speculative capital gains will now be reported in Annex G of the personal income tax return , following the measure approved in the State Budget for 2022, with effect from January 1, 2023, and will therefore be mandatory for this years return. On the other hand, profits generated from the sale of assets held for more than a year will continue to be taxed at the standard rate of 28% , or 35% for income from securities paid in Portuguese territory by entities in tax havens. Declaration of gains from the sale of crypto-assets becomes mandatory According to what is stipulated in the State Budget for 2023, all gains from the sale of cryptoassets will now be mandatory to declare, either in Annex G, which refers to capital gains, or in Annex B, which refers to income from self-employed workers , or so-called green receipts. In the case of self-employed professionals who buy and sell crypto-assets, they must not only register their activity with the tax office , but also declare the gains from the sale of the assets in question in Annex B. Landlords with long-term leases will see a tax reduction As part of the Mais Habitação (More Housing) measures, there will now be a distinction in Annex F between short and long-term rental contracts . In general, the autonomous tax rate has been reduced from 28% to 25% for all rental income from contracts for own permanent housing. Thus, there are now tax benefits for landlords with rents from long-term leases of more than five years, in situations where the landlord does not choose to include the income in the tax return. On the other hand, for leases of five to ten years, a 10% reduction will be applied to the respective autonomous rate and, for each renewal of the same duration, a 2% reduction will be applied, with the reductions relating to the renewal of the contract being subject to a 10% limit. For contracts with a duration of up to 20 years, a 15% reduction is applied , with the rate falling to 10% and, f or contracts longer than 20 years, income is taxed at an autonomous rate of 5%. Incentives for employees to buy start-ups With the measure in the State Budget for 2023, there is now a field in Annex A designated for the purchase of shares in startups by their employees , who now benefit from exemption from the 28% rate until the moment of sale . When the asset is sold, the tax will be levied on only 50% of the income. It is important to mention that there are conditions to the benefit , which relate to the characteristics of the startup, which is only eligible for this incentive application if it is micro, small or medium-sized, and cannot employ more than 250 workers or have a turnover of more than 50 million euros. Also excluded from the benefit are employees who hold more than 20% of the share capital or voting rights, managers and directors, i.e. members of statutory bodies. Foreign income from the sale of real estate in Portugal There will also be changes to the tax framework for foreign income generated by the sale of real estate in Portugal, in the capital gains section of Annex G. As a result, this years tax returns will now include property sales by non-resident foreigners, who will be included in the same regime as Portuguese citizens. Offshore assets and income from national capital are excluded Excluded from this years tax return are all types of income that exceed €500 , even those that are exempt from tax or assets in offshore companies. Read also: Taxes: until when can you validate IRS invoices?
Source: Freepik Author: Redaction The deadline for the annual reporting of rents from rented urban buildings to the tax authorities , for landlords with long-term contracts, is now underway, so that they can benefit from a discount on their personal income tax (IRS). The tax reduction may be greater or lesser depending on the term of the contract, however, in order to benefit from this relief, landlords must report it to the Tax Authority (AT) by February 15th. Between January 1 and February 15 there is a deadline for the annual reporting of rents for rented urban buildings, the tax office said on its social networks. In order to file this report, landlords must present the rental contract, which can be either a contract for residential purposes signed before 1990, or a contract for non-housing purposes, before 1995. According to the tax authorities, for these situations, the taxable value is calculated by multiplying the annual value of the rents by 15. If this value is lower than the taxable value resulting from the valuation of the property, the IMI rate will be levied on this value . Owners of this type of contract can submit this report on the Finance Portal until February 15. Related topics: Model 44 declaration: landlords must submit document this month
Source: Freepik Author: Redaction The National Association of Property Owners (ANP) points to a widespread number of cases of scams with contractors , calling for caution when contracting work. According to the association, the complaints are daily and involve money being handed over for work that, in many cases, never actually takes place. We have cases of complaints against contractors who receive the down payment and dont even start the work and, in other cases, companies who simply abandon the work because theyve already spent the money , points out ANP President António Frias Marques. As a result, many homeowners have suffered , which worries the association, which also points out that these situations are more prevalent in the countrys two main cities, Lisbon and Porto. Stay informed and attentive with SUPERCASA Notícias!
Source: Freepik Author: Redaction The deadline for submitting the Model 44 Declaration to the tax authorities for IRS purposes is the end of this month. All landlords with rented properties that do not require an electronic rent receipt are obliged to submit it. It is the Tax Authority (AT) itself that reminds landlords of the payment deadline, having launched a campaign on its social networks entitled Declaration 44 - Who must submit it?, reminding them that the communication identifying the rents received must be made during the month of January on the Finance Portal. What is Model Declaration 44? This is a document that reports the annual communication of rents received, and is intended for the declaration of sums received from tenants for the payment of rents relating to leasing, assignment of use of the building or part of it, which is not considered a lease, subletting or the rental of machinery and real estate installed in the leased property. This declaration must therefore be submitted by taxpayers with category F income, i.e. landlords, who have been granted exemption from issuing the rent receipt electronically, or who have not opted for this method. If you are a landlord and issue your receipts electronically, you do not need to submit this declaration. Are you clear? Read also: What are Liberatory Taxes? Learn more
Source: Freepik Author: Redaction The Liberatory Rate is an IRS (Personal Income Tax) rate that is taxed definitively when the income is made available to the taxpayer. Its particularity is that it is taxed definitively, without the need for a declaration when filling in the Income Tax form. Provided for in article 71 of the Personal Income Tax Code, this rate is applied to personal income tax depending on the type of income subject to it. Thus, depending on the income being analysed, the rate may be 28%, 25% or 35%. In what situations can the rate be applied? This rate can be applied in various legal situations in Portugal, which you can find out about in this SUPERCASA Notícias article. Some of these include: Capital gains Rent Income earned by taxable persons. In the latter case, income subject to the application of the tax-free rate includes interest on bank deposits , income realised in Portugal by taxpayers resident abroad, profits from shareholdings or profits from gambling. Rates of 28%, 25% and 35%: in which situations are they applied? Considering that the tax-free rate is not included in the annual personal income tax return, several financial institutions can collect the tax directly, which is then paid to the state . Directly, it can be charged in situations where there is interest from bank accounts, dividends from shares, interest from bonds, income paid by investment funds, profits shared by entities subject to IRC or other capital income received by non-residents in Portugal that is not otherwise taxable. In these situations, the discount applied to the tax-free rate is 28%. The 25% discount applied to the rate in discharge of tax includes income from dependent work, business and professional income , which can be derived from isolated acts , pensions or compensation aimed at repairing non-pecuniary/emergency damage. On the other hand, when the exemption rate is 38%, it is subject to collection on income paid or made available to accounts opened in the name of one or more holders , on behalf of unidentified third parties, capital income acquired by non-resident entities without a permanent establishment in Portugal , provided they are domiciled in a territory with a more favourable tax regime, or in situations of income paid or made available to the respective holders, resident in Portuguese territory, owed by non-resident entities without a permanent establishment in Portugal and which are domiciled in a country, territory or region subject to a more beneficial tax regime. How do rental taxes work? The property sector is one of the sectors where these taxes have an impact , and they began to be levied in 2013 on landlords through the way in which they choose to declare the income derived from their rents. Currently, landlords have two options: they can continue to declare their rental income in the annual tax return, or they can choose to pay the tax autonomously. This flexibility allows them to choose the modality that is most advantageous to them and also encourages greater investment in the sector. For rentals, the tax rate applied is 28 per cent. Did you like this information? We suggest you also read: What is an Isolated Act? Find out , Find out what a utilisation licence is and what its for or What is a bank moratorium? Find out more
Source: Freepik Author: Redaction With the start of the year comes new goals, as well as renewed opportunities to increase your income. One of the most common ways to do this is by investing in property. However, to make a successful investment, its not enough just to buy a home; you need to do the maths to be able to make well-considered decisions. To be successful in this type of investment, SUPERCASA Notícias gives you 4 tips for investing in property and starting 2024 on the right foot. 1. Taxes and costs When you buy a property, there are several associated costs that you need to take into account, such as Municipal Property Transfer Tax (IMT), Stamp Duty , Municipal Property Tax (IMI), the condominium and property insurance. As a property owner, these are fixed costs that you are obliged to pay, some of which are one-off payments (such as IMT) and others are recurring payments (such as IMI). In addition to these, there are also other unexpected costs that you need to take into account, such as maintenance or building work. However, you should know that you can deduct most of these costs from your property income before you are taxed. This means that you will deduct the total of these charges from the annual amount of rent received and then apply the tax rate . 2. Price to rent One of the calculations you should make before committing to buying a property to rent out is the price to rent , which consists of the value of the property divided by the total annual rent . With this calculation, you can better understand how long it will take to recoup your investment. For example, if the property is worth 150,000 euros and you receive a monthly rent of 500 euros: - 500 x 12 = 6,000 (total annual rent) - 150,000 / 6,000 = 25 (total years until you recoup your investment) To achieve a good investment, the ideal ratio is less than 15. It is not advisable to buy the property when the total number of years to recoup the investment is more than 20, since the longer the expected term, the lower the return obtained from renting. 3. Tax benefits Long-term residential rentals can allow the property owner to benefit from certain tax incentives . Since 2019, a tax benefit has been in force for long-term permanent rentals, which allows landlords to benefit from a reduction in personal income tax on contracts lasting two years or more. Rents are taxed separately from other income (autonomous taxation) at a special rate of 28%. However, the longer the contract, the greater the reduction in the IRS rate . Its important to remember that for contracts entered into after 1 January 2024, where the monthly rent exceeds the general rent price limits by type by 50%, depending on the municipality where the property is located, the rate reduction will not apply, as provided for in the Rental Support Programme. In turn, the Mais Habitação (More Housing) programme has also brought some changes, including to property taxes, so you should pay attention and check with the relevant authorities for all the applicable benefits. Find out about the changes to IMI and IMT here . 4. Contracts When renting out your property, you should also pay attention to the type of contract you present to the future tenant . This is because the contract will protect you, so it is important to mention in the document the conditions and value of the deposit, the term of the propertys lease and the possibility of renewal. This point is important to emphasise since, as of 2019, all contracts with a duration of less than three years will be automatically renewed if nothing has been stipulated. In other words, if you enter into a two-year contract, it will automatically renew for two years, unless there is a decision to terminate the contract or the owner needs the house for themselves or their children. Read more: Support for landlords with old rents: how does it work? , Subletting rules: know them all
Source: Freepik Author: Redaction From July next year, landlords with rents prior to 1990 will be able to apply for compensation from the Institute for Housing and Urban Rehabilitation (IHRU), as announced by the Ministry of Housing. If you have any doubts about how it will work, where you can apply or what kind of documents you need to submit , SUPERCASA News will answer your questions and explain everything about this measure, which aims to support and provide stability for tenants aged 65 and over. As published in the Diário da República this Wednesday, December 27, the support is limited to 1/15 of the Tax Asset Value (VPT) of the rented property, divided into 12 months, and covers residential rental contracts signed before November 18, 1990. Who can benefit from this support? All landlords with rental contracts prior to the stipulated date, which is November 18, 1990 , can benefit from this support. It is estimated that there are already around 124,083 private landlords with eligible rental contracts. And the measure, as announced by the Ministry of Housing, has a total cost of 26.6 million euros per year. Where can I claim this compensation? Since the measure only comes into force on July 1, 2024 , the landlord, meeting the eligibility conditions mentioned above, must submit an application for the compensation to the IHRU, to which he must send all the relevant information so that the final decision on the application can be considered. You will need to submit the following documents: Proof of the date on which the lease contract was signed, by registering the contract , which you must submit to the Tax and Customs Authority; The framework of the rental contract, which must correspond to one of the situations set out in articles 35 and 36 of the NRAU, by providing proof of the request for exemption from Municipal Property Tax (IMI) in accordance with the situations described in these articles; Proof of the monthly rent, through a rent receipt, model 44 or invoice issued by the landlord to the tenant; The Tax Asset Value (VPT) of the rented property, by means of a copy of the urban land registry proving the VPT on the date the decree-law came into force. How is the support awarded? After submitting your request, with all the necessary documents and information, the IHRU has 30 days to decide whether or not to award the compensation to the landlord. The request for compensation to be awarded takes effect from the date the request is submitted to the IHRU. If a request for exemption from IMI is subsequently rejected, the landlord must inform the IRHU within 30 days in order to receive a refund of the compensation received. How is the support paid and how long does it last? If the application is accepted by the IHRU, the compensation is paid to landlords for a period of one year, which can be renewed for equal and successive periods , provided that the landlord can prove, before the end of this period, that the requirements initially considered for the award of the compensation have been maintained . This proof must be provided again to the IHRU. If there is an annual update of the rent, the amount of support will change, and the landlord is responsible for informing the IHRU, within 30 days of the update, that there have been changes in the rent to the tenant. This may result in a change in the amount of compensation , by recalculating the support, which will be communicated to the landlord for subsequent payment, with retroactive effect to the time of the update. The amount of compensation awarded is exempt from personal income tax and social security contributions. The support ends when the rental contract comes to an end and the rent is no longer subject to compensation , or if the right to compensation lapses due to the death of the landlord without a successor entitled to maintain the support. If the property is transferred to another person , in the event of the landlords death, the right to compensation is maintained, subject to the new landlords request to maintain this support , no later than 60 days after the original landlords death. In what other situations can the support end? This rent compensation may be terminated if the landlord fails to comply with his obligations regarding access to and maintenance of the compensation, specifically by failing to provide legally valid evidence requested by the IHRU within the time limits established for this purpose. Read other related topics in SUPERCASA News
Source: Freepik Author: Redaction If youre thinking of renting a house, you should know that its very likely that youll be asked to pay a deposit. In this article, SUPERCASA Notícias will clear up all your doubts about the rental deposit. What is the security deposit for? According to Article 1076 of the Civil Code, a security deposit is a guarantee required when a contract is made between parties, in order to ensure compliance with contractual requirements . In the real estate context, the security deposit usually corresponds to a monetary sum that the tenant pays to the landlord at the time the rental contract is signed. The amount of the deposit varies according to the terms of the contract, but it is common for it to correspond to one or two months rent. At the end of the contract , this amount is returned to the entity that paid it , once all the requirements have been met. The security deposit is a form of guarantee that ensures the tenants responsibility towards the landlords property , protecting them in the event of late payment, refusal to leave the property, damage, reckless use, unauthorised works or other situations. How does it work? The amount of the deposit is set by negotiation between the two parties , and the conditions to be met in order to receive this amount in full will be established in the rental agreement. If the tenant does not default during the rental period, the landlord is obliged to return the amount in full and a receipt must be issued. If the tenant defaults , the landlord reserves the right to keep part or all of the security deposit to cover the damage caused. If the damage is greater than the value of the deposit, in addition to the landlord keeping the entire deposit, he can also require the tenant to pay the remaining costs of repairing the damage. What kind of guarantees can be used in addition to the security deposit? There are other alternatives to the security deposit that can be required in a rental agreement, such as: - Guarantor: a person appointed by the tenant who is responsible for guaranteeing the fulfilment of the tenants obligations; - Surety Bond: a financial product that acts as a guarantee, provided by an insurance company, which guarantees the fulfilment of contractual obligations; - Advance rents: the landlord can request one or more advance rents, to be paid when the lease is signed. The request for a deposit and advance rents can exist simultaneously, with the amount of the deposit being imposed by the landlord (usually equivalent to one or two months rent), and the request for up to three advance rents. After the end of the contract, the landlord has a period of 20 days to return the deposit , under penalty of paying damages. In turn, the advance rents will be deducted from the final months of the contract. In the event of any default, the landlord may also withhold this amount until the outstanding amount is totalled. Rights and obligations In order for a rental contract to be correctly concluded, both the landlord and the tenant have rights and duties that they undertake to fulfil. The landlord is therefore responsible for: - Issue monthly receipts for the rents, as well as the security deposit and advance payments; - Carry out maintenance work; - Bear condominium costs; - Relocate the tenant in the event of works carried out during the rental period; - Communicate any rent increases by letter with acknowledgement of receipt. Rights: - Receive rent payments on time; - Demand payment of a security deposit; - Receive the property in the condition in which you handed it over; - Retain the security deposit in the event of damage caused by the tenant; - Examine the property when there are reasons to do so; - If the contract is of indefinite duration, the landlord can terminate it at any time if he needs the property for his own home. A contract between two parties presupposes the fulfilment of all rights and duties , in order to ensure that there is no damage and that a healthy relationship is maintained between landlord and tenant . The security deposit ensures that the landlords property remains intact, safeguarding any damage that may occur. Also find out What is Usucaption? SUPERCASA explains , Subletting rules: know them all and Wooden buildings: trend for 2024?
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