Parliament will discuss this Friday the government’s draft law containing the measures of the Mais Habitação program, in a debate accompanied by ten bills, a draft deliberation and two draft resolutions from the opposition.
Here are some of the measures included in the government’s proposal.
Restrictions on the rent increase in new contracts
The initial rental value of new contracts for properties that have been on the rental market for the past five years cannot exceed 2% compared to the previous one. To this value can be added the automatic updating coefficients of the three previous years (if not applied), taking into account 5.43% compared to 2023.
Homes whose rent is less than the maximum limits per type provided by the Affordable Rent Program (PAA) are not subject to that update limit.
Old rents updated for inflation
Old leases (prior to 1990) whose tenants have an adjusted gross annual income of less than five national minimum wages or are 65 or older or have a disability greater than 60% do not transfer to the New Urban Lease Regime (NRAU).
The rents in question are now updated based on inflation and benefit from IRS and IMI exemption. There is also provision for the payment of damages to landlords.
Suspension for two years to cover the sale of the property
The draft law provides for a two-year suspension of the deadline for covering the value of the sale of a house, avoiding capital gains tax, with the measure taking effect on January 1, 2020. In practice, this is interrupted for two year the 36 month period people have to invest in a new home the value of the sale of their own permanent home — and during which they enjoy tax exemption.
The suspension of the count of this 36-month period relates to sales that took place before 2020.
Tenant and landlord desk
The handling of the special eviction procedure and the rental order is now guaranteed via the new Tenants and Landlords Desk (BAS).
State pays rent arrears after three months of non-payment
The State will replace the tenant and pay rent with three months’ default, to strengthen the rental market. In this way, it is up to the State to assess the tenant’s situation and can proceed to collect the missing amounts using the currently existing resources for the collection of other debts. Since the non-compliance is due to lack of resources, the case is articulated with Social Security and withdrawn from the BNA.
Capital gains from homes sold to the state and municipalities are exempt from IRS
Capital gains arising from the sale of property to the state or municipalities are exempt from IRS and IRC, and only those earned by residents of the list of territories and countries that Portugal classifies as tax havens are excluded from this measure. Capital gains resulting from sales through the exercise of preferential subscription rights are also excluded from this exemption.
Currently, 50% of the capital gain generated must be added to the remaining income subject to progressive IRS rates.
Incentive to let Local Accommodation (AL) rent houses
Homes currently assigned to Local Accommodation (AL) and moving to the rental market are exempt from IRS and IRC on rent until December 31, 2029.
For this, the rental contract must be completed by December 31, 2024 at the latest and only homes with AL registration on December 31, 2022 are eligible.
Suspension of new AL licenses
The issuance of new local housing permits will be suspended, with the exception of rural accommodation areas, with municipalities responsible for determining the “adequate balance” of housing and student housing that will allow for the end of this suspension.
However, the government proposal provides that the suspension of these registrations will continue in municipalities that have declared a situation of housing shortage.
Expiration and renewal of AL registrations
Local accommodation registrations now have a five-year term, renewable for the same period, with the government’s proposal to provide that registrations issued on the date of entry into force of the law applicable to Mais Housing “be reviewed during the year from 2030 .
This maturity date does not apply in situations where the AL devices “are a real guarantee for loan agreements entered into until February 16, 2023, which have not yet been settled by December 31, 2029 and whose first revision will only take place after full amortization”. initially contracted”.
In addition, AL registration holders must provide proof of activity within two months of the entry into force of the law, under penalty of forfeiture of the registration.
Owners can oppose the AL
Owners can oppose the AN in self-contained fractions of buildings or in parts of urban buildings, if that is the decision of more than half of the building’s permit. Such non-opposition cannot be verified if the constructive title provides for such use (AL).
Outstanding contribution to the AL
Local accommodation will now pay an extraordinary contribution whose tax base is formed by the application of an economic coefficient (which takes into account the size of the property and income) and urban pressure. The rate applicable to this tax base is 20%.
The taxable asset value (VPT) for IMI purposes of houses in local accommodation is always equal to 1 and no longer benefits from the reduction in the aging coefficient associated with the age of the property.
Forced rental of vacant homes
It is one of the measures that has attracted the most criticism and consists of the possibility of forced renting of properties that have been vacant for more than two years and are located outside the interior.
Vacation homes, which are vacant because the respective owner lives in a nursing home or provides permanent care as an informal caregiver and those of emigrants, as well as those of people displaced for occupational, health or educational reasons, are not considered vacant in this effect.
The proposal provides that after two years, the council will notify the owner to carry out works or use the property, with the latter having 90 days to respond, after which, if the house remains vacant, the councils can proceed to forced letting. .
The law defining what constitutes an empty house already provides for water, light, gas and telecommunications companies to send a list of consumption information to local authorities, and the government’s proposal adds that this list will now become a mandatory matrix identification of each building.
End of increased IMI rates for municipalities that do not rent vacant properties
Municipalities that do not make use of the powers given to them by law with regard to the forced letting of vacant properties can no longer apply increased IMI rates to vacant properties.
Tax advantage when working on affordable rental housing
The government wants to increase the number of houses available in the Affordable Rent Program (PAA) and for this a VAT rate of 6% is foreseen in the construction work or renovation of houses usually allocated to this program (at least 70%), as well as exemption from IMI for three years (renewable for another five years) and exemption from IMT when purchased for rehabilitation.
Tenants can pass on the tenancy agreement to the tax authorities
From now on, tenants can report rental contracts, sublease agreements, commitments and associated changes or terminations to the Tax and Customs Administration if the landlord does not do so.
Exemption from capital gains on the sale of real estate to pay off a loan
The program provides exemption from capital gains on the sale of family property as long as the amount is used to pay the loan for the permanent home of the owner or his descendants.
This exemption applies to properties whose sale takes place between January 1, 2023 and December 31, 2024, with the proposal stipulating that depreciation must be carried out within a period of three months after the realization date.
Reduction from 28% to 25% of the special IRS rate on rentals
Rental income (when the taxpayer chooses not to include it) now pays an IRS rate of 25%, instead of the current 28%. In addition, the reduction in the tax rate that already exists for longer-term contracts is reinforced, and in the longer term (more than 20 years) it drops from the current 10% to 5%, but ends for contracts of duration between two and five years .
End of ‘golden’ visas
No more ‘golden’ visas will be granted for the acquisition of real estate, with the government proposing to make some refinements to the renewal (every two years) of the visas already granted and to stipulate that “new applications for residence permits with regard to investments or support for artistic production, restoration or conservation of the national cultural heritage which had been certified by GEPAC prior to the entry into force of this Act”.
Conversion of business premises and services into homes
The possibility is being considered to automatically convert the use of commercial real estate or services into residential properties, eliminating the need to review zoning or housing permits, provided costs are controlled.
Land or buildings made available to housing cooperatives
The government also plans to make land or public buildings available to housing cooperatives for construction or conversion into affordable rental housing.
Licensing simplification
Architectural projects are now only licensed on the basis of the responsibility of the designers and public bodies are penalized in case of delay in issuing recommendations.
250 ME for affordable housing
The program provides for the approval of a credit line, with mutual guarantee and interest rate subsidy, for affordable housing projects, in particular construction or renovation, and for the acquisition of real estate to be placed on the rental market.
The homes promoted with this support are rented out affordably for a minimum of 25 years, whereby a longer term can be specified in the lease, after which the municipalities and the IHRU have the right of pre-emption when acquiring them.
Entities that can compete for this measure are cooperatives, commercial civil construction associations, municipalities and charities or other institutions of social solidarity.
Line of 150 ME for municipalities to carry out forced labor
The creation of a financing line of 150 million euros is foreseen, through the Banco Português de Fomento, so that the municipalities can carry out coercive measures, strengthening the fulfillment of the prerogatives of the municipalities within the scope of the legal regime of urbanization and construction.
Source: DN
