Landlord insurance not always tax-deductible

Landlords taking out comprehensive insurance cover for rental properties cannot offset the costs against their taxes.

Only obligatory insurance is tax-deductible against income for IRS. The rules have been published by the Portuguese tax authorities (Autoridade Tributária e Aduaneira (AT) which has issued a series of stipulations on what may and may not be tax-deductible in Category F of the IRS regime covering revenues from properties.

According to Jornal de Negócios, if a landlord wants to take out multi-risk house insurance in addition to mandatory insurance, this is not tax-deductible.

“In addition to the mandatory insurance, landlords often choose to take out a more comprehensive insurance cover which covers other risks,” state the tax authorities.

Multi-risk insurance offers a raft of cover covering damage to property or its content and which can also include civil responsibility.

“Since these are optional, these respective expenses cannot be considered eligible for the effects of tax deduction on respective rental income,” the tax authorities conclude.