Portugal: Housing Changes with the Approval of OE2024: What to Expect?
The State Budget for 2024 (OE2024) has been approved, bringing forth a series of significant changes to the housing landscape in Portugal. These changes, approved after intense debates and voting sessions, are poised to directly impact the lives and finances of Portuguese families. Let’s delve into the main approved transformations and understand how they might affect the housing sector.
One of the most notable changes concerns the deduction of rents in the IRS, which has been increased to 600 euros in 2024. This move was a direct response to rent updates, which could increase by up to 6.94% based on the annual rent update coefficient published in August.
Additionally, a reduction in the IRS withholding tax has been approved for employees living in rented houses, aiming to alleviate the impact of inflation.
The penalty-free rescue of Retirement Savings Plans (PPR) for home payments has been extended to 2024, allowing families to continue using this option for their housing expenses.
Another significant change is the ability to recover capital gains tax from house sales. Those who haven’t reinvested the proceeds after a sale will have until the end of 2024 to request a refund of the tax on those gains.
The public real estate sector will also undergo transformation with the creation of a digital database of public real estate assets, facilitating its management and updating.
There are also initiatives to identify public buildings for conversion into university residences, aiming to meet the demand for student housing.
Accessibility and mobility take the spotlight with a funding program to remove architectural barriers in public buildings and homes for people with restricted mobility, as well as tactile signaling in strategic locations.
One of the most impactful proposals is the creation of the Emergency Housing Fund, funded with 25% of the revenue from the 1.1 item of the General Stamp Tax Table. This fund aims to support individuals deprived of housing by providing temporary accommodation payments, rent assistance, and credits for home acquisition or renovations.
Finally, the transfer of assets from Fisher Houses to local authorities, if not linked to Social Security, represents a significant change in managing this type of property.
Summary of key changes:
1. Deduction of Rents in IRS:
The deduction of rents in the IRS has been increased to 600 euros in 2024, aiming to address potential rent increases of up to 6.94%.
2. Reduction in IRS Withholding Tax for Tenants:
Approval for a 40 euro reduction in the IRS withholding tax for employees living in rented homes to mitigate inflation.
3. Continuation of Penalty-Free PPR Rescues:
The penalty-free rescue of Retirement Savings Plans (PPR) for home payments continues in 2024.
4. Recovery of Capital Gains Tax from Houses:
Until the end of 2024, individuals who haven’t reinvested proceeds from house sales can request a refund of the capital gains tax.
5. Digitalization of Public Real Estate:
Creation of a digital database of public real estate assets, georeferenced and interoperable with the Institute of Registration and Notary (IRN).
6. Identification of Public Buildings for University Residences:
Survey of state buildings for installation as university residences by the end of 2024.
7. Accessibility and Mobility Funding Program:
Initiative to eliminate architectural barriers in public buildings and homes for people with mobility restrictions.
8. Creation of Emergency Housing Fund:
Establishment of a fund to provide support to individuals deprived of housing, offering temporary accommodation payments and housing-related credits.
9. National Strategy for Integration of Homeless Individuals:
Commitment to create a national strategy for integrating homeless individuals.
10. Transfer of Fisher House Assets to Local Authorities:
Transfer of Fisher House property and assets to local authorities if not linked to Social Security.
These changes, approved in the OE2024, outline a new scenario for the housing sector in Portugal. They aim not only to provide financial and structural support to families but also to create solutions for several issues faced in the country. It is essential to closely monitor the implementation of these measures and their effects as they promise to directly impact the lives of many Portuguese citizens.
Stay tuned to MB Consulting for more information. If you want a quick contact from our team, use our contact us form and we will be happy to help you during your stay in Portugal.