Tiago Mendonça de Castro clarifies that IRS reduction for landlords may cover tourist and student lettings
Tiago Mendonça de Castro, a partner at Abreu Advogados, clarified that the 10% IRS reduction on rental income may also cover tourist, temporary, or student tenancy agreements, provided the property is intended for residential purposes.
Speaking to SIC, the lawyer explained: “As long as the property is for residential purposes, the law, at this point, does not exclude from the autonomous 10% tax a landlord who wishes to allocate a residential property to these special temporary uses.”
The measure excludes Local Accommodation (Alojamento Local), but it does not prevent the landlord from benefiting from the reduction if they lease the property to a company operating in the sector. As Tiago Mendonça de Castro stated, “the company will not benefit from the reduction, but there is no express limitation in the law preventing the landlord from benefiting.”
Until now, only landlords who entered into contracts lasting more than ten years were eligible for the reduction. If approved in parliament, the benefit will apply to most residential tenancy agreements, provided the rent does not exceed €2,300.
Watch the full clarification (available only in Portuguese).
