A failure by the landlord to notify the Treasury of a permanent housing lease can be very detrimental to tenants, who cannot deduct rent from the IRS, when the deadline for filing the return has passed, and no access have access to the monthly subsidy of up to 200 euros, which begins to be paid in May with retroactive effect to January. It is still possible to make the correction in time to avoid at least the loss of the tax advantage, but not the exclusion of the aid for this year.
The case was reported to Dinheiro Vivo. Tenants noticed that something was wrong when filling out the IRS declaration, because the rental costs were not automatically entered as usual. When consulting on the Finance Portal page the type of contract that the owner had registered, they verified that in Model 2 of the Stamp Tax (IS) the field referring to “Lease Contract for Non-Residential Properties” was checked. permanent”. Now, according to the IRS code, only rents from permanent housing contracts are deductible, hence the automatic exclusion by the tax authorities.
“Only up to 15% of their value (with a limit of 502 euros) are deductible from the collection of rents paid by the tenant for permanent housing, according to paragraph a) of Article 78-E of the IRS Code”, the ministry clarified of Finance to the DV. As such, the guardianship indicates that “a lease whose purpose is permanent housing, but which is registered on the financial portal as being for non-permanent housing, should be amended to reflect its true purpose”. “With this change, the registered lease reflects permanent housing,” he adds.
The tenant must therefore ask the landlord to change model 2 of the IB to permanent housing, taking into account that the change relates to the start of the contract and not only to the date of this correction. Otherwise, 2022 income will still not count because the IRS return will cover last year’s income.
But since the obligation to declare is ongoing, with the tax authorities, (from April 1 to June 30) and the landlord has not yet rectified the purpose of the contract, the deduction will not appear automatically, so “the tenant must manually enter costs in rents ” in Appendix H, regarding tax benefits and deductions to obtain the benefit, suggests ILYA tax attorney Luís Leon.
Certainly because the contract concluded between the parties, which shows that it concerns Permanent Housing, overlaps with Model 2 of the IB filed with the Tax and Customs Administration. “The question should not be how the contract is registered with the tax authorities, but whether there is in fact a rental agreement for permanent accommodation,” warns tax law specialist Diogo Bernardo Monteiro of Eversheds Sutherland FCB. “Because the contract is registered as not for permanent residence, this deduction will of course not appear automatically,” he points out.
The taxpayer must then indicate in the IRS return that, instead of the amounts communicated to the Tax and Customs Administration (AT), he intends to declare expenses for Healthcare, Education, Real Estate and Housing. Expenses validated in the e-invoice, such as Health or Training, appear automatically so that the tenant only has to manually register those related to rent.
Loss of support for this year
Correction by the landlord is also necessary for tenants to be eligible for a government-created income support of up to 200 euros per month for families with an effort rate of more than 35% and an annual taxable income of up to 38,632 euros (6 . the step of the IRS). Grant disbursement will begin in May with effect from January. That is, if the contract is not rectified in the AT, tenants who could even benefit from the subsidy are immediately foreclosed.
In any case, and even if model 2 of the IS is changed, the deadline set by the government until March 15 for validating eligible contracts has already passed. Those families can therefore only receive support in 2024. Suppose they were even entitled to 200 euros per month this year: the loss could amount to 2400 euros.
“Anyone who has a rental contract on March 15 that is registered on the Financial Portal as being for non-permanent housing will not be eligible for income support in 2023. However, in cases where this is justified, the purpose of the lease can be updated so that they are eligible for support in 2024,” the finance ministry said.
However, tax inspector Diogo Bernardo Monteiro has a different view: “Theoretically, if the landlord declares it to be an error made when filing the stamp tax model 2 statement, this correction should be effective from the original presentation of that statement. . must not be an obstacle to the provision of extraordinary income support”.
This kind of oversight by landlords doesn’t seem to be common. The Association of Tenants from Lisbon, the Association of Tenants and Owners of Northern Portugal and the National Association of Owners (ANP) informed DV that they are not aware of identical cases.
At the moment, and according to the latest INE counts, which report until 2021, there are 922,900 leases, of which “the vast majority are for permanent housing”, pointed out the president of the ANP, António Frias Marques. The DV also asked Finance about the number of permanent and non-permanent housing contracts registered with the AT, but received no answer. However, Frias Marques defends that “99% of the contracts communicated to the tax authorities are for permanent housing”.
Salomé Pinto is a journalist for Dinheiro Vivo
Source: DN
