For many families, a mortgage is the largest monthly expense. The good news is that part of these charges may qualify for IRS (Portuguese income tax) deductions, although with restrictive rules. See what applies.
Mortgage Interest Deduction
The deduction of mortgage interest is limited to contracts entered into until the end of 2011. Those who took out a mortgage from 2012 onwards generally do not benefit from this deduction. This limitation surprises many taxpayers.
Rents as an alternative
Those who rent a house for their primary and permanent residence can deduct part of the rents paid, up to an annual limit. This is significant support for those who do not own a home.
Amortisation and Capital Gains
There are rules that allow the use of capital gains from the sale of a property to pay off (amortise) a mortgage for a family member's own home, with tax implications. These measures have specific conditions and deadlines.
IMI (Municipal Property Tax) and Housing
An owner's own home is subject to IMI (Municipal Property Tax), but may benefit from temporary exemptions in certain situations, for example, for low-income households or by decision of some municipalities. It is worth confirming the situation with the local council.
Support for Young Homebuyers
Specific support has been created for young people buying their first home, including exemptions from IMT (Municipal Tax on Onerous Property Transfers) and Imposto do Selo (Stamp Duty) within certain value and age limits. These measures change frequently, so it is important to confirm the current conditions.
What to gather for IRS
Keep proof of interest, rents, and charges, and confirm that they are correctly classified in e-Fatura. Without documentation, you lose the deduction.
At Grupo Your, we help you identify all the housing-related deductions you are entitled to. Talk to us before the next IRS season to avoid leaving money on the table.
