Source: Freepik Author: Redaction The Lisbon City Council launched a proposal following the presentation of the results of the public consultation of the Municipal Housing Charter, at the 7th meeting of the Lisbon Municipal Housing Council, last Friday, April 19, which includes measures of positive discrimination. The proposal was launched by the Councilor of Housing, Filipa Roseta, and includes affordable rental programs for long-term residents in parishes with strong housing pressure, keeping the competitions open to all. According to the councilwoman, we will propose affordable income programs in which 50% of the houses in competition are intended exclusively for those who live or work in Lisbon and the rest for all candidates . It has been suggested that in the five parishes of the historic center where pressures are highest, namely Arroios, Santo António, Misericórdia, Santa Maria Maior and São Vicente, the percentage rises to 75% for those who live or work there. The goal, as explained to Filipa Roseta, is to provide solutions to many who are forced to leave the city and to displaced professionals from essential professions, such as nurses, teachers and police, or who, without available housing, are forced to refuse job offers in the city of Lisbon. He declared: positive discrimination in affordable income programs is necessary to counteract the outflow of population from the parishes that have suffered the most housing pressure . Keep abreast. Read also: Houses for sale without a license have skyrocketed since the beginning of the year
Source: Freepik Author: Redaction The Complaint Portal registered an exponential increase in the number of complaints against the various Government housing support programs. In the first quarter of the year alone, the decrease was about 600% compared to 2023 and, at the origin of the complaints, there are lengthy processes, delays in payments and lack of response by the competent authorities. Most of the complaints are addressed to IHRU - Institute of Housing and Urban Rehabilitation, with the Porta 65 program leading the number of complaints. However, the values continue to increase in several other supports, with expressiveness registering more sharply in May 2023. From 2022 to 2023, there was an increase of 373.3% in the number of registered complaints , with 60 occurrences in 2022 and 284 in 2023 and, until April 15, had already been collected 106 complaints, which, compared to the same period, represents an increase of 606,7%, with occurrence of 15 situations. The most targeted supports for this type of claim are Porta 65 Jovem plus the youth rental support program (34.4%) and Porta 65+ (2.2%), followed by Income Support (32.2%) and Extraordinary Income Support (13.3%). On the other hand, the Supported Lease and Accessible Lease support registered a decrease, in each one, to 4.4% of complaints. Also accompany: Bank received more complaints about housing loans in 2023
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 owners of real estate that is exclusively intended for rent may benefit from a support for conservation works in the interior , provided by the Municipality of Amadora. Designated PARAH ARRENDAR , this program will be available in May, after being approved at the end of February and published in Diário da República last Monday. According to Vítor Ferreira, vice president of the Municipality of Amadora, the objective is to promote the rental market, since, as a result of public housing policies and our strategy, we think we should also give here a support to the rental market and this was the best way we found to put some discarded fires in that market. The regulation of the program stipulates eligible conservation works inside homes that include interventions in telecommunications, water, gas, sewage or electricity networks, being excluded from the interventions in special technical installations, including installation of air conditioning, central heating or acquisition of electrical or burning equipment, such as stoves, water heaters, washing machines or refrigerators . Depending on the typology of the property, the maximum values also vary for the limits of the support assigned by the municipality, which corresponds to 30% of the total value of the intervention, and which will be paid in two phases. Thus, 60% before the start of the works and the remaining 40% at the end of a lease of 36% months, explains the mayor. Owners must have the license to use the property for at least 15 years to be eligible for the program , and additional information can be consulted on the Amadora City Council website. Also stay abreast: Downtown Lisbon wants to rehabilitate vacant municipal properties
Source: Freepik Author: Redaction The rent support subsidy is losing beneficiaries, with several landlords allegedly forcing their tenants to sign new rental contracts and, since this extraordinary support only covers rental contracts signed until 15 March 2023, with the signing of a new contract, access to the subsidy is lost Thus, even if there are families who fulfil the eligibility requirements for the support created under Mais Habitação in 2023, the signing of a new contract cancels the validity of the support, regardless of whether or not they continue to live in the same house. In the second, third and fourth quarters of 2023 alone, according to the National Statistics Institute (INE), more than 69,000 new housing rental contracts were signed in Portugal, but it is still unknown how many of these households were eligible for the other support criteria. The extraordinary rent support is granted automatically to households with an effort rate of over 35% when paying their housing rents, with incomes up to the sixth IRS bracket and contracts signed by 15 March last year. On the subject of renting, read the following articles: Portugals rental market grows by 4.5 per cent , New 25 per cent rate to cover all rents received in 2023
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 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 The Parish of Bonfim will benefit from 48 new social housing , and the Municipality of Porto launched, this Friday, March 15, a public tender with a base price above 7.2 million euros. The announcement, published in Diário da República, intends the construction of housing buildings at controlled prices, having as destination the rental supported , as clarified by the municipality. Thus, interested parties may, until April 22, submit their proposals, and the work is expected to start at the end of the first half. Four buildings will be contemplated by the contract, with the same number of fires, but with different typologies, being planned the installation of elevators to make them fully accessible , in a work that will take place in Eirinhas , in the parish of Bonfim. The construction of housing buildings in Eirinhas promotes the renovation and transformation of this area of the city, points out the municipality. Also read: Living in Mealhada: a place of good conviviality , Lisbon wants to open applications for housing cooperatives and Torres Vedras will strengthen responsiveness in housing
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 During 2023, activity in the national real estate sector was mainly marked by a challenging climate , along with a wait and see strategy on the part of investors. So, according to the Real Estate Market Overview , prepared by Savills Portugal and sent in a statement to SUPERCASA Notícias , discover the main indicators of the national real estate market for 2023. Investment At the end of 2023, Portuguese real estate investment stood at 1.6 billion euros, marking a 50% drop compared to the previous year. This scenario reflects the trajectory observed across the European continent, which has seen a sharp decrease in investment volumes. In 2023, with the exception of the retail and hospitality segments, all the others saw significant drops in investment volumes compared to 2022. Investment in the hospitality sector totaled 571 million euros, demonstrating a clear interest and commitment on the part of investors in this segment. It is important to note that, for the first time, investment in alternative segments exceeded the volume of investment seen in the star and more traditional segments , with investment of more than 100 million euros in student residences located in Lisbon and Porto standing out. In 2023, 79 investment transactions were concluded, 54% of which were signed by national investors, representing 30% of the total volume of real estate investment. Alternative Segments - PBSA (Purpose Built Student Accommodation) This segment has been one of the most dynamic in real estate . In 2023, there was a 3% increase in the number of students compared to the previous year, demonstrating that, despite an uncertain economic context, families continue to prioritize access to higher education, with demand for student accommodation continuing to grow. However, the reality of the PBSA segment in Portugal has been marked by a shortage of student accommodation , which is one of the major challenges facing the government, universities, families and students. The current supply in the cities of Lisbon and Porto is just 3,800 beds, serving only 2% of the total number of students enrolled in higher education in Portugal. There are currently 23 operators in Portugal, offering a total of approximately 9,600 beds. Offices At the end of 2023, the office market in Lisbon had an absorption volume of 112,474 m2, a decrease of 59% compared to 2022 , a trend consistent with other European markets. The year ended with 152 transactions. Prime rents ended the year at €28/m2/month, indicating an increase of 8% compared to 2022. This increase underlines the resilience of all market fundamentals. In addition, the average rent for the Prime CBD zone closed at €23.81/m2/month, reflecting an increase of 9% compared to 2022. Portos office market, on the other hand, had a total take-up volume of 50,048m 2 , reflecting a decrease of 14% compared to 2022. Despite this, the Invicta city maintained a resilient level of activity, recording 64 transactions. Looking to the future, the city of Porto foresees a substantial pipeline over the next two years, covering around 90,000 m 2 . Among the most emblematic projects planned are the Slaughterhouse, VIVA Offices and Mutual. Industry & Logistics In 2023, the Portuguese industrial and logistics market demonstrated robust activity, totaling a take-up of approximately 430,000 m2, with logistics operations accounting for 300,000 m2 of this figure. However, after two years of historic occupancy volumes, 2023 saw a decrease of -16%. In Greater Lisbon, 70% of the Gross Lettable Area (GLA) occupied in 2023 was dedicated to logistics, with 85% of this space exceeding 5,000 m2 and being used by distribution and logistics operators. Meanwhile, in the North & Porto region, the total take-up volume reached 125,111m2, up 4% on 2022, with logistics operations making up 65% of the total volume of closed transactions. With a logistics stock of around 3.3 million m2 in Greater Lisbon, demand for prime assets is becoming increasingly competitive, especially with regard to ESG & Sustainability standards. Retail 2023 proved to be a year of resilience and adaptation for the Portuguese retail market. Despite facing macroeconomic headwinds that impacted private consumption, the retail segment overcame the challenges with innovative approaches. In a context of economic uncertainty and changing consumer behavior, the sectors turnover index contracted by 0.8% over the course of 2023, following growth of 4.7% in the previous year . Portuguese families, who have a greater propensity to save, contributed to the decrease in turnover, reflecting a cautious approach in a context of economic pressure. However, there was room for various retail sectors to prosper, as was the case with food distribution and low-cost non-food retail concepts , which emerged as the most resilient segments, recording growth and defying market downturns. In addition, demand for proximity retail continued on an upward trajectory, highlighting consumers preference for convenience and accessibility. In particular, high street retail saw significant activity, driven by growth in the tourism sector. In cities such as Lisbon and Porto, there was an increase in new high street stores, with a notable presence of brands catering to various sectors, such as catering, fashion and lifestyle. Residential The national residential market has faced significant challenges due to rising construction costs , with a direct impact on the value of properties for customers. The predominant challenge continues to be the cost of labor, largely attributed to its scarcity. At the end of December 2023, construction costs had risen by 1.8% year-on-year. House sales in mainland Portugal, particularly in Greater Lisbon, Greater Porto and the Algarve, fell by approximately 17%, 24% and 25% respectively. The cautious economic scenario also had an impact on the number of dwellings licensed in Greater Lisbon, with a significant drop of 33.6% compared to the previous year. On the other hand, Greater Porto ended 2023 with positive results, showing an increase of 14% compared to 2022. The new Simplex Urbanístico promises to address these issues and simplify licensing processes, but these effects have yet to be felt in the market. As far as the rental market is concerned, Lisbon and Porto have seen price increases and decreases in the number of contracts signed, driven by the rising cost of housing. At the end of 2023, average rental prices peaked in Lisbon and Porto at 19.9 €/m2 and 16.3 €/m2 respectively, reflecting increases of 22.8% and 25.4% respectively. Follow SUPERCASA News for all the relevant topics for the real estate market
Source: Freepik Author: Redaction The parish of Lordelo do Ouro, in the municipality of Porto, is going to have a new urban project aimed at building 291 new homes for affordable rent , after the Porto Municipal Assembly approved the transfer of a plot of municipal land where the project will take place. With an area of more than 45,000 meters , this project involves an investment of more than 64 million euros , and the allotment process was submitted for public consultation at the beginning of December. According to the information made public by the municipality, the divestment of the municipal land will allow for the restructuring of the urban fabric and the consolidation of the relationship between the buildings and the existing public space , as there are several housing shortages in the city. Read more: Coimbra wants to attract more technological investment , Construction helped mitigate the effects of inflation
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