We all know the old proverb about death and taxes. On the one hand, we know littleabout the former, while on the other there is quite a lot you should know about taxes.Especially if you are planning to rent your property here in Portugal. Portugal taxes rentalincome from resident and non-resident alike at a flat rate of 28%. If you are new to Portugal ora non-resident finding out as much as you can about leasing your property is a must. You willsave yourself a lot of grief by speaking with an attorney at once. There are intricacies toPortuguese law, not to mention constant amendments, which might have long-lasting impacton your financial prospects.A word of caution for non-residents. Non-residents are required by law to hire aqualified resident to represent them and deliver an accounting on all financials relative to theproperty in question. This stipulation might seem a hindrance, but it protects you and yourinvestment in the long-term. It ensures fairness and accountability for all those concerned. Plus,you will find locating a qualified representative quite easy.
Further, if you anticipate renting your property on a short-term basis, there areproposals for changes to the law, taking place right now, that might directly affect you. In thewake of Covid-19, the Portuguese legislature has been tackling serious issues that have plaguedthe short-term leasing market for over a decade. The temporary hiatus on global tourism hasmade these reforms possible. The new Portuguese laws will incentivize property owners toreturn to the long-term leasing market. This is hoped to rectify a startling imbalance in the number of long-term residents who can afford to live in the cities, near work, or othernecessary municipal infrastructures. In turn, however, improved oversight of short-term leasesleads one to expect their overall quality and compensations will improve. Airbnb horror storiesabound, after all.
And this is precisely the reason Portugal is building on its current stability and riding itsrising star in the European Union. Beyond its gorgeous geography, Portugal has much to offerthe interested investor. The leading indices rank Portugal high, across the board. From “qualityof life” to “digital life” the nation leads most of Europe, even amidst the pandemic, thanks to itssuperb healthcare system. And this makes Portuguese real estate a highly sought outcommodity.
For Further Reading:
Essencial Portugal: Taxes on Rental Income in Portugal
Global Property Guide: Rental Income Tax (Effective) in Portugal Compared to Europe
Global Property Guide: Taxes on Property in PortugalIdealista:
Declaring Rental Income in Portugal: Allowable Expenses and Tax Deductions