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?
Source: Freepik Author: Redaction With the entry into force of the Mais Habitação (More Housing) Programme, the compensation mechanism to be awarded to landlords with rents prior to 1990 was decided . According to information released by the Ministry of Housing, the request for compensation can be submitted to the Institute for Housing and Urban Rehabilitation (IHRU) from July next year, following the promulgation of the law this Thursday by the President of the Republic, Marcelo Rebelo de Sousa. There are still unanswered questions about this measure, such as whether the amount of compensation will be retroactive, or exactly what documentation will be required of landlords. However, it is known that the amount of compensation will be capped at 1/15th of the propertys Tax Asset Value (VPT), and 124,000 contracts will be involved, with an average monthly subsidy of around 17.85 euros. According to the Ministry of Housing, this compensation corresponds to the difference between the value of the monthly rent charged and this limit, and no personal income tax or social security contributions will be levied on it, adding that this law represents the culmination of the governments work aimed at finding a structural solution that guarantees a fair and balanced resolution for tenants and landlords . The measure will cost 26.6 million euros a year , according to the study carried out at the governments request, which outlined three different scenarios for awarding this compensation to landlords, with this being the solution with the least budgetary impact. The aim, according to the executive, is to give stability and predictability to these rental relationships, allowing rents to be updated under the same conditions as other contracts , guaranteeing the security of tenants by not transitioning to the New Urban Lease Regime in these contracts, in particular by continuing to protect tenants aged 65 or over, with proven disabilities or in a situation of economic need , as well as compensating landlords, through the IMI and IRS Exemption for these contracts, already provided for in the State Budget for 2024. Read more: Increase in old rents for 2024 in line with inflation or Landlords have doubts about updating old rents
Source: Freepik Author: Redaction According to the latest report by Knight Frank , a real estate company that has been a partner of Portugals Quintela + Penalva since 2021, rents in the luxury housing market worldwide increased by 7.9% in the 12 months to September 2023. However, tenants financial capacity is reaching its limit . This is one of the main conclusions of The Knight Frank Prime Global Rental Index , now released to SUPERCASA Notícias . Although this increase is slightly higher than the 7.5% seen in the second quarter of this year, the latest data confirms that rents in the residential segment are rising at a rate three and a half times higher than the long-term trend seen in the pre-pandemic period , recorded in the 3rd quarter of 2019, and 25.5% above the pandemic low in the 1st quarter of 2021. Among the cities analyzed, both Singapore and New York recorded a quarterly drop in rents, although neither recorded an annual decrease. For its part, Sydney claims the top spot for luxury rental price increases over the last 12 months, and Singapores annual growth remains strong, but with prices falling by 1.7% in the last quarter. Despite the ongoing debates around teleworking and the challenges in the office sector in major cities, the data confirms the demand for city living and the resilience of workers accommodation needs in close proximity to offices. In most of the cities analyzed by the Prime Global Rental Index, it was found that there is strong growth in accommodation needs . This, together with a relatively low supply of new residential stock, suggests that upward pressure on rents will continue. However, there are already limits to this process in terms of affordability. There comes a point where, even in markets with very strong demand and weak supply dynamics, tenants are unable to continue offering substantially higher rents. Three markets stand out in terms of rent growth since 2021. London has seen rents rise by 55.2%, New York by 53.4% and Singapore by 50.3%. Both New York and Singapore are experiencing a slowdown in rental growth and have shown signs of falling over the last three months. London continues to record double-digit growth, supported in part by strong wage growth; Sydney claims first place for luxury rental increases over the last 12 months; Singapores annual growth remains strong, but prices fell by 1.7% in the last quarter and New Yorks luxury rental market is cooling, recording annual growth of 2.4%, the lowest for two years. Portugal grows by double digits In Portugal, the trend of rising rents has been constant, with Lisbon (21.4%), Cascais (20.2%) and the city of Porto (25.6%) experiencing double-digit growth over the last year in apartment rents. In the case of houses , the average increase in rents is slightly lower, but just as sharp. In Lisbon, the increase is 10.4%, in Cascais 17.7% and in Porto 8.3%. Read also: State coffers have already disbursed 138M€ for housing support
Source: Freepik Author: Redaction Subletting is a method that allows tenants to rent out their property or part of a property to third parties . Although it is a legal procedure, there are some rules you must respect if you are thinking of doing this, which SUPERCASA Notícias will explain to you throughout the article. Please note that in order to sublet a property you must have the property owners authorisation , and once authorised, you must draw up and sign a contract and declare this income in the IRS. What do you need to know to sublet? According to the law, subletting is only possible if there is written authorisation , i.e. you must inform the owner in writing of your intention to sublet the property and ask for their authorisation. It may also be the case that the landlord is aware of the subletting situation and does not comment on it , but it is always preferable to have his written authorisation. If the landlord does not give his consent, the subletting contract is not valid. What happens to the subletting contract if the lease ends? If the tenancy agreement ends, so will the subletting agreement, because in the subletting agreement the same rules established in the initial agreement apply . It is important to keep all the documents relating to this process so that you can safeguard your rights vis-à-vis the subtenant, particularly with regard to the payment of rent. Rent amount There is a legal limit to the amount of rent that can be charged, whether you are subletting the whole house or just part of it. According to article 1062 of the Civil Code, the tenant may not charge the subtenant rent or rent in excess of or proportionally in excess of what is due under the lease, increased by 20 per cent, unless otherwise agreed with the landlord . This implies a ceiling of 20 per cent on the amount of rent you pay . This amount can only be exceeded if the landlord authorises it. Example: - For a rent of €500 you can only charge the sub-tenant a maximum of €600 (500 + 20% = 600); - For a rent of 1000€, the maximum amount charged will be 1200€ (1000 + 20% = 1200). How does it work in tax terms? If you sublet a property, you have to declare the resulting income in the IRS, i.e. the amount that corresponds to the difference between the rent you received from the subtenant and the rent you pay to the landlord . In order to fill in the IRS declaration correctly, you should fill in box 5 in Annex F relating to property income. In this box you must enter - Amount of rent received; - Amount of rent paid to the landlord; - TIN of the sub-tenant; - TIN of the landlord. According to the Tax Authority, it is also compulsory to issue an electronic rent receipt for the difference earned by the sub-tenant between the rent received from the sub-tenant and that paid to the landlord . Landlords rights If the sub-lease is applied to the entire property, the landlord can replace the tenant, i.e. the sub-tenant becomes a direct tenant. However, this right can only be exercised by the landlord by means of a court notice to the tenant and sub-tenant. When this notice is given, the sub-letting agreement ceases to have effect and the sub-tenant becomes a direct tenant , who must be informed that the rent must be paid directly to the landlord. Other topics that may interest you What is property leasing? , Compulsory insurance for landlords and tenants: find out
Source: Freepik Author: Redaction 1,610 new homes are to be built in Porto , an increase in the housing stock of around 12.5% , as announced by the municipality. Currently, the housing stock has 13,062 dwellings, a figure that will rise once the eight projects currently underway have been completed. Of these eight, two will be developed in partnership with private entities. The aim is not only to increase the number of homes on a rent-supported basis , but also to increase the number of homes available on the market at affordable prices . In the same context, Porto City Council will be launching a new edition of the rent support program - Porto Solidário. The 13,062 homes will be located in Lordelo do Ouro, Monte Pedral, Monte da Bela, Ilha da Lomba, Eirinhas, Bairro do Leal and Farias Guimarães, distributed for affordable rent and supported housing. In addition to these, 433 vacant dwellings are also highlighted for rehabilitation, promoted by municipal companies, which the municipality points out are not plans, but ongoing projects . Follow up: IHRU aims to rehabilitate 4,000 homes next year , Teachers relocated to Lisbon and the Algarve will receive support or State coffers have already disbursed 138M€ for housing support
Source: Freepik Author: Redaction The Mais Habitação Program came into force last October, with a wide range of measures to promote and support access to housing in Portugal , with affordable prices and a regulated housing market. However, it is necessary to monitor the implementation of the measure , which Marina Gonçalves, Minister of Housing, confirms can be done mainly through the registration of contracts with the tax office. For the Minister, the law is clear, pointing out that there are two dimensions with regard to rent rises: there is the dimension of new contracts , which is the measure that is in Mais Habitação (More Housing) and that, in fact, what it says is that a lease that existed, whose contract ends, and a new contract is made on the same house, that rent is limited to the rent that existed - regardless of the application of the coefficients, obviously - to a limit of 2% , she explains. As for the second dimension , Marina Gonçalves says that these are the existing contracts indexed to what is the legal term (...) indexed to inflation, which next year is around 6.94% . The figures indicated include the new offer that exists and that, for the first time, is being placed on the market , belonging to the free market that operates on its own . It also points out that, in relation to the projects founded by the government, including, for example, affordable rent, it is talking about new supply and not supply that is already on the market . With regard to monitoring compliance with the law, Marina Gonçalves leaves no room for doubt, pointing to the registration of contracts with the tax office as the greatest form of monitoring , since they are subject to stamp duty and are therefore registered on the tax office portal, and assures that this has been strengthened. Read also: Late capital gains investments may be exempt
Source: Freepik Author: Redaction According to an official source from the Ministry of Housing, almost 27% of the municipalities have already received the advance of the total amount contemplated in the 1st Right Program for support in access to housing , which corresponds to about 36.9 million euros transferred from the state coffers. The total amounts to 138 million euros, which will be distributed among the localities. The management of this allocation is made by the Institute of Housing and Urban Rehabilitation (IHRU), although it is the municipalities that implement the measures, having been, until November 23, transferred to the municipalities about 138 million euros under the 1st Right as the ministry led by Marina Gonçalves advanced. The amount distributed as an advance was made due to applications made in May , by municipalities, municipal companies, private institutions of social solidarity or mercy, who are entitled to the early allocation of 25% of the planned investment, as with the other beneficiaries of the PRR (Recovery and Resilience Plan). Other current news: Justice and Housing provide 23 homes for affordable housing
Source: Freepik Author: Redaction With the entry into force of Mais Habitação (More Housing), owners of active Local Accommodation (LA) registrations have two months until December 7 to submit proof of their activity. In Lisbon , around 75% of active local accommodation licences are at risk of cancellation, while in Porto the figure is 43% of establishments. If the required documentation is not submitted, the city councils will automatically cancel the licences. According to the new rules published by Mais Habitação , all active licences subject to cancellation are prevented from being validated until at least 31 December 2030 , since new local accommodation licences are suspended until then, with the exception of hostels, guest houses and local accommodation operating in the interior of the country and in the Autonomous Regions of Madeira and the Azores. While renting for more than 120 days a year is prevented, local accommodation in the homes where the owner lives is still in operation and outside the suspension. However, the licences that remain active expire on 31 December 2030 and can be renewed every five years. Proof of activity must be submitted on the Balcão Único Eletrônico (e-balcão) platform, and the last periodic VAT return equivalent to the local accommodation operating activity, or the last income declaration for IRS or IRC purposes , will be validated. If the LA activity has been declared with the tax authorities , it must be presented by the holder together with the VAT declaration or the declaration of commencement of activity , if the former is not available, and if more than one licence is still active, the procedure must be repeated for each registration, sending the same tax document for all processes. Find out more in SUPERCASA Notícias : New rules in LA: EU seeks to create more transparency
Source: Freepik Author: Redaction The old rents are aimed at a group of people over 70 years old, with contracts signed before November 1990 and incomes up to the third IRS bracket, in which, according to an official source from the Ministry of Housing, for tenants the only possible increase will be the one resulting from the application of the update coefficient scheduled for 2024. According to the government, from the second half of the year , a solution will be introduced that is lower than that already demanded by landlords, compensating landlords for this increase. However, despite being approved by the Council of Ministers , more details about this compensation measure are still unknown, only that it will be limited to 1/15th of the taxable value of the property . According to data published by the Housing and Urban Rehabilitation Institute (IHRU) in a study, more than 80 per cent of the tenants holding these contracts are over 70 years old , and 70 per cent have incomes up to the third IRS bracket (based on the 2020 tables), with an annual salary of up to 15,992 euros. With regard to the table of landlords accounted for, 18.7 per cent have annual incomes equivalent to the sixth IRS bracket (incomes already between 26,356 and 38,632 per year). Discover other topics that may interest you in SUPERCASA Notícias : The Rent to Sublet Programme has already received 1,054 application s, House rent deduction increases in 2024 or IRS rate limit for housing rents approved
Source: Freepik Author: Redaction On November 27, during the special votes on the State Budget for 2024 (OE2024), the l imitation of the special personal income tax rate on rents to 28% to 25% was approved . The proposal, approved without any votes against, was abstained by Chega, Iniciativa Liberal, Livre, PCP and the other parties voted in favor. The amendment was proposed by the PS, clarifying that the 3% reduction in the special rate levied on rental income (when the landlord doesnt decide to bundle it) is only applicable to residential rents , the rest maintaining the initial rate of 28%. During the day of voting, the members of the Budget and Finance Committee accepted proposals from the PS which oblige the reporting of income subject to tax exemption for a value of more than 500 euros, as well as assets held in countries, territories or regions with a more benign regime. Advocacy and voting on amendments to the OE2024 kicked off last Thursday, November 23, with the final vote to be held on November 29. Follow these and other topics in SUPERCASA News .
Source: Freepik Author: Redaction The PS proposal to increase the IRS deduction for house rent to 600 euros won parliamentary approval on 27 November, with Chega abstaining. The reinforcement of tax support for students was also approved in the votes for the 2024 State Budget (OE2024), with the PCP abstaining. The deduction of house rent expenses from the personal income tax (IRS) was allowed for 550 euros, higher than the 502 previously accepted. Following the increase in rents of up to 6.94 per cent, as of January, the PS argues that, with the proposal presented, tenants will have an additional reduction of around 100 euros in their IRS, in addition to the deduction resulting from updating the limits of the IRS brackets . For taxpayers with an income corresponding to the first IRS bracket, the proposed deduction for rent expenses is to increase from 800 to 900 euros . The reinforcement of tax support for students means an increase to a maximum of 400 euros in the deduction of rent for displaced students. This measure aims to promote the strengthening of young peoples incomes, in line with the increase in IRS Jovem exemptions. It is therefore proposed to increase the tax deduction for displaced students from 300 euros to 400 euros, reducing the respective IRS tax burden and relieving young people of their income , argues the measure proposed by the Socialist Party. Following the approval of PS proposals, the IRS withholding tax for tenants was also reduced. The measure covers people with a monthly salary income of up to 2,700 euros gross and a lease or sublease agreement for their first home, duly registered with the Tax and Customs Authority (AT) or a loan agreement for the purchase, construction or construction of their own permanent home. Read also: Landlords have doubts about updating old rents
Source: Freepik Author: Redaction Primary and secondary school teachers, placed in schools in the regions of Lisbon and Tagus Valley and the Algarve, will receive a subsidy of up to 200 euros to pay rents. The support was approved in the Council of Ministers and will be in force until 2025, covering about four thousand teachers, with an estimated cost of eight million euros. The measure, contemplated in the State Budget for 2024 , will only enter into force on January 1 of next year, however, the decree provides for the inclusion of contracts concluded from September 1, 2023 , only applicable to teachers who are placed more than 70 kilometers from home. The Minister of Education indicates that the measure applies to the regions of Lisbon and Tagus Valley and the Algarve, since these are the regions of greatest difficulty to place teachers due to high housing prices . João Costa, Minister of Education, adds that the support will be similar to the extraordinary support to the rents already in force , that is, it will be attributed to teachers whose effort rate is above 35% with housing costs, and to perform this calculation will be considered the charge with permanent housing . The estimate of the guardianship is that this measure will reach about four thousand teachers displaced in these two regions, however, this number may be higher, since it will include all teachers who meet the eligibility requirements for support . Follow this and other topics in SUPERCASA Notícias
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