On November 25, 2022, the 2023 Budget for Portugal was approved in the Portuguese Parliement. Do you want to know the main measures that directly impact the real estate sector? Here they are:
Mortgage credit
Reduction of withholding tax on the income of families that: (i) have taken out a loan to purchase their own and permanent home; and (ii) have a gross monthly remuneration of up to € 2,700.
Note: For this to happen, families will have to notify the employer of the existence of a loan agreement, through a statement accompanied by 'indispensable elements for verifying the aforementioned conditions, as well as any other tax-relevant information that occurred subsequently'.
Possibility of renegotiating mortgage loans
(see our article at https://www.mouramarques.pt/post/já-pensou-em-renegociar-o-seu-crédito-à-habitação)
Housing lease
Limitation of housing rent increases to a maximum of 2% per year
Concession of a tax benefit to landlords through tax exemption on property income between 9% and 30%, in terms of IRS (personal income tax), and 13%, in terms of IRC (corporate income tax)
Maximum limitation of 2 months of rent and deposit as advance payment on a lease contract
Municipal Property Tax (IMI)
IMI increase - up to 100% - for Local Lodging or Accommodation units in urban pressured zones
Municipalities are now responsible for the decision to grant tax exemption on classified properties
Municipal Tax on the Onerous Transfer of Real Estate (IMT)
Only those who can prove that they have resold properties previously acquired for this purpose in the last 2 years can benefit from the IMT exemption (previously only 1 year was required)
The beneficial IMT regime applicable to property exchanges (‘permutas’) will not be applied to all cases in which the exchanged properties are transferred again within 1 year after the exchange
Real estate capital gains
Equal tax treatment is now given to residents and non-residents in the taxation of capital gains generated from the sale of real estate, in terms of IRS (personal income tax)
Note: Non-residents no longer see their capital gains taxed at an autonomous rate of 28%, with 50% of the capital gains generated being taxed, this amount being included with the remaining income of non-residents and subject to the general rates of the brackets of IRS (personal income tax)
Public investment in housing
Support for access to housing (with the reinforcement of the '1º Direito' program)
Promotion of affordable public housing, with the simplification of the verification model for applications to the 'Accessible Lease Program' and reinforcement of 'Gate 65'
Exemption from IRS and IRC on income obtained through renting at affordable costs for student accommodation within the scope of municipal programs
Housing promotion policies funded by the Institute for Housing and Urban Rehabilitation (IHRU)
Financing of housing and urban rehabilitation through borrowing by the IHRU, channeling them towards investments in the promotion and rehabilitation of the housing stock
Loans from municipalities for housing and urban rehabilitation operations, intended exclusively to finance investment in affordable rental programs
Do you have any questions or would you like additional information on a related subject? Do you need specialized support in the purchase, sale, lease or transfer of any property? Do not hesitate to contact us and we will be happy to help you!
Source: ‘Idealista’ article dated November 29, 2022
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