Rented House: How to Declare Rent on Your IRS in 2026

If you live in a rented house, filing your IRS tax return can be a real opportunity to recover part of the money you spent on rent throughout 2025. Expenses with permanent housing rentals benefit from a 15% deduction on the total amount paid, up to a maximum limit of €700.

However, for this deduction to apply, the rental contract must be registered on the Tax Portal (Portal das Finanças) and the landlord must issue the respective electronic receipts. Without these requirements, rent payments will not be considered for tax purposes.

How to Fill in Your IRS Return?

Permanent housing rent must be declared in Annex H of the IRS Model 3 return. In most cases, the values will already be pre-filled, as they become available on e-Fatura from March 15.

If you need to enter or correct data manually, you should fill in:

Section 6C (tax deductions) with code 654

Section 7 (permanent housing expenses) with code 05, indicating the landlord's tax number (NIF)

If you receive any public housing support, such as the Porta 65 program, you must deduct those amounts from the total declared rent before calculating the deduction.

How Much Can You Deduct?

The calculation is simple: add up all rent paid in 2025, subtract any public support, and apply the 15% rate. However, even if the result exceeds €700, the Tax Authority will only consider this value as the maximum deduction limit for 2025 income.

Practical example: if you paid €600 per month for 12 months, the total is €7,200. Applying 15%, you get €1,080 - but the effective deduction will be limited to €700.

Good News: The Deduction Increases in 2026 and 2027

For rent paid throughout 2026, tenants can count on additional relief. The maximum deduction limit has been increased by €200, now set at €900. In 2027, this value will rise to €1,000 - meaning the tax benefit for tenants is on an upward trajectory.

Quick Checklist for Tenants

✅ Confirm that the rental contract is registered on the Tax Portal

✅ Verify that the landlord issued all electronic receipts for 2025

✅ Check e-Fatura from March 15 to validate the values

✅ Fill in Annex H (sections 6C and 7) if data is not pre-filled

✅ Deduct public support (Porta 65, etc.) before declaring

✅ The IRS return must be filed between April 1 and June 30, 2026

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This article is for informational purposes only and does not replace professional tax advice. For a personalised analysis of your situation, contact Grupo YOUR.

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