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What is the tax rate for rental income in Portugal in 2024?


What is the tax rate for rental income in Portugal in 2024? - portugal news
What is the tax rate for rental income in Portugal in 2024? - Portugal Business News

Portugal real estate investment news - What is the new tax rate for rental income in Portugal in 2024? How to get a full tax exemption for Airbnb properties that are put back on the long-term residential market?


The Government of Portugal has just announced a new tax law for rental income derived from residential leases in 2024. These are the new tax incentives in Portugal for 2024:



What is the tax rate for rental income in Portugal in 2024?


Portugal now has a new tax rate for rental income for residential leases in 2024. Portugal’s new special tax regime for property income derived from residential leases is that there is a progressive reduction in the tax rate for long-term residential leases based on the duration of the contract.



Here is Portugal’s new tax rate for real-estate rental income in 2024:


Here is Portugal’s new tax rate for real-estate rental income in 2024 - Portugal news
Here is Portugal’s new tax rate for real-estate rental income in 2024 - Portugal Business News

Portugal’s new tax rate for real-estate income derived from residential leases is subject to a progressive tax rate depending on the length of the Lease Agreement as follows:


1- For a residential Lease Agreement of up to 2 years, the tax rate will be 25%.

2- For a residential Lease Agreement of 3 - 5 years, the tax rate will be 25%.

3- For a residential Lease Agreement of 5 - 10 years, the tax rate will be 15%.

4- For a residential Lease Agreement of 10 - 20 years, the tax rate will be 10%.

5- For a residential Lease Agreement of over 20 years, the tax rate will be 5%.



What is the tax rebate for renegotiating the rental price in Portugal?


Portugal has just announced a new law providing tax incentives for property owners who agree to renegotiate and lower the rental price of residential properties as follows:


If property owners in Portugal agree to sign a new Lease Agreement for residential purposes with a rental price that is 5% below the rental value previously charged and if the Lease Agreement is for 5 years, there is a significant tax rebate and the tax rate that will be applicable will be 10%.


However, if the landlord does not agree to sign a new Lease Agreement for residential purposes with a rental price that is reduced by 5% below the rental value previously charged, the tax rate that will be applicable will be 15% for a 5-year lease.


It is important to note that, in case the Lease Agreement exceeds the limits applicable under the Rental Support Program by 50%, there will be no reduction in the special tax rate based on duration, even if the contract has a term of more than 5 years, and the applicable tax rate will be 25% for all residential property income.



How to get a full tax exemption for Airbnb properties that are put back on the long-term residential market?


The Government of Portugal has just announced a total tax exemption for all real-estate income derived from properties that were previously rented as short-term accommodation under the Alojamento Local (AL) licence, as in the case of Airbnb properties. The condition is that the property had an AL license by December 31, 2022, and it is converted into residential rental property by December 31, 2024, with a rental contract registered on the Finance Portal. In that case, the tax exemption will apply until December 31, 2029.




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