Paying for a private residence for your child to study in Porto or Lisbon will finally be reflected in your IRS - even if the contract is not a classic lease. The Portuguese Tax Authority (AT) has published a binding ruling clarifying that expenses with accommodation in private residences can be deducted as education expenses, provided certain requirements are met.
The decision came after a taxpayer questioned the tax office about her son's situation - a displaced student with tax residence in Madeira attending a residence in Porto with a "temporary accommodation services" contract rather than a formal lease. The doubt was legitimate: the law explicitly mentioned "lease", but the market had long evolved to other models.
"A restrictive interpretation would lead to situations of injustice, resulting from unequal treatment of similar realities."
The AT opted for a broader reading. In its doctrinal filing, it admits that "amounts spent by students on accommodation expenses - and not just on lease expenses - should be accepted as education expenses." A position that acknowledges the gap between the letter of the law and the reality of the student housing market, where private residences with service contracts have proliferated in recent years.
For families, the decision is welcome at a time when housing costs in university cities like Lisbon and Porto continue to rise. But beware: the tax office's openness is not a blank check. There are mandatory conditions to meet.
What you need to know to deduct
- The student must be displaced more than 50 km from their tax residence
- Must be up to 25 years old
- Invoices must be reported to the tax office and expressly indicate "displaced student lease" or equivalent
- The service provider must be registered with a compatible CAE (e.g.: 55900 - other accommodation)
- Expenses must be declared in annex H of the IRS
- Deduction limit: up to €400 annually in rent, with a global ceiling of €800 in education expenses (may increase by €300 in certain cases)
The practical impact of this clarification can be significant. In Portugal, tens of thousands of families have displaced students housed in private residences - many of them operating precisely with this type of contract. Until now, fiscal uncertainty led many taxpayers not to declare these expenses, losing a legitimate deduction.
The AT's decision now serves as a reference for all such cases, bringing greater predictability and equity to a matter that was, in the tax office's own words, in a zone of unequal treatment. For those still preparing this year's IRS declaration, it's worth reviewing receipts - and ensuring they are correctly classified on the Finance Portal.
