PS suggests IRS cut in exchange for rent reductions

 In Housing, News, Rental market

The parliamentary group of the ruling Partido Socialista (PS) has suggested that the Government should introduce “a tax sweetener incentive” to its controversial ‘More Housing’ package which aims to alleviate Lisbon’s chronic affordable housing shortage.

According to the news source Público, the idea is to offer a 5% reduction on capital gains tax providing the rent is at least 5% lower than the rent stipulated on the previous rental contract.
The measure would imply a change to the IRS Code as well as to another that aims to remove existing tax benefits from rental contracts “when the monthly rent is 50% above the general limits of rental prices per typology and according to the district where the property is located. (Defined in the affordable rental legislation)
The PS MPs also suggest lowering the extraordinary contribution tax on Local Accommodation (CEAL) by 5% from 20% to 15%. But it says that this reduction should “only be applied to independent apartments” exempting private owners who use their own permanent home for Local Accommodation for up to 120 days per year”.
On Local Accommodation, the PS suggests excluding the suspension of new registration records — which will happen when the law comes into force — for permanent own housing linked to this business “providing the exploration does not exceed 120 days per annum”, thereby “safeguarding small property owners who rent out their homes for short periods of time.”