The only exceptions are for rentals that already benefited from an IRS rate of less than 25% (following the regime in force until Mais Habitação), which maintain the most favorable tax regime.
Housing rent received throughout 2023 and whose lease contract lasts less than five years will pay an IRS rate of 25%, indicates the Tax and Customs Authority (AT).
“The new rate of 25% provided for in paragraph 2 of article 72 of the IRS Code will apply to all property income arising from housing rental contracts obtained in 2023”, said AT this Friday, in response to Lusa .
With the More housing law, which came into force in the first days of October 2023, the special rate on housing rents was reduced from 28% to 25% – this being the level of IRS borne by landlords who do not opt for inclusion. of income when, from April 1st, they start filling out the IRS declaration.
The new rate, however, applies to rent received throughout last year and covers contracts lasting less than five years. The only exceptions are for rentals that already benefited from an IRS rate of less than 25% (following the regime in force until Mais Habitação), which maintain the most favorable tax regime.
In the same response to Lusa, AT highlights that, as specified in the State Budget law for 2024 (OE2024), “property income arising from rental contracts for permanent housing lasting less than five years that already benefit from a lower IRS rate, maintain that lower rate until the end of the contract or until its renewal, depending on which comes first”.
It should be noted that income from non-housing rentals continues to pay the 28% rate – or the IRS rate corresponding to the bracket that results from the inclusion of income.
In addition to reducing the special IRS rate on housing rents from 28% to 25%, Mais Habitação also changed the rate reduction scheme that until then applied to longer-term rental contracts.
Thus, until October last year, lease contracts lasting more than two years benefited from a rate reduction (which increased at a rate of two percentage points per year), the rate being lower the longer the contract was.
With Mais Habitação, only contracts lasting five years or more are now eligible for this rate reduction.
Thus, for contract rents lasting between five and 10 years, a reduction of 10 percentage points is applied to the respective autonomous rate, with a reduction of two percentage points being foreseen for each renewal of the same duration, up to a limit of 10 percentage points. .
In other words, contracts with this type start with an IRS rate of 15% that is reduced by two percentage points each year up to the aforementioned limit. Previously, its rate was 23%, reducing at that rate of two points per year.
Mais Habitação maintained the logic of the tax reduction being greater when the duration of the contract is longer, which explains that contracts between 10 and 20 years are now subject to an IRS rate of 10% (compared to the 14% of previous regime) and that leases lasting over 20 years now bear 5% IRS, instead of the 10% previously provided for by law.
