Proposed tax cuts for landlords
The Housing Minister clarified that this tax relief will cover every rental agreement, whether it’s a new contract or an existing one.
If Parliament approves the government’s tax package, landlords renting properties up to €2,300 per month could receive substantial tax relief. The plan envisions the income tax rate dropping from 25% to 10%, and this reduction would apply to all contracts, both new and existing.
Miguel Pinto Luz, the Minister of Infrastructure and Housing, explained at the CNN Summit that the 10% rate applies to "all contracts, including current ones, provided rents are below €2,300".
In practical terms, the move lowers the income tax on rental income from residential leases to 10% for all contracts, new or existing, as long as rents do not exceed €2,300 and the income is earned between 2026 and the end of 2029.
If the landlord operates as a company subject to corporate income tax (IRPJ), there is also a tax reduction, with the tax applying to 50% of the earnings. In other words, companies renting out reasonably priced properties will have half of their income exempt from tax.
But the package goes further. Landlords who charge rents that are 20% below the municipal median will see 0% income tax, according to Miguel Pinto Luz.
Note that this total exemption is available through the Simplified Affordable Housing Regime (RSAA), which exempts from IRS and IRC contracts with rent limits up to "80% of the municipality’s median rent values per m2" and with a minimum term of three years, or three months for temporary residence. The draft law, which still needs Parliament’s vote, outlines these conditions.
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