The IRS rate on home rentals is 25%, but if the rental contract is with a company that, in turn, subleases it to its workers, the rate paid by the landlord is 28%.
This understanding of the Tax and Customs Authority (AT) is expressed in response to a binding information request from a landlord who has rented a house and wants to know what IRS rate will be applicable to him on the rent received, taking into account that his tenant direct is not the family that will live there, but a company.
Although there is the possibility for a company to “acquire on lease a building or part of a building, for housing purposes, provided that it is intended to be occupied by a natural person known at the time of signing the contract”, in this specific In this case, the AT considers that the IRS rate cannot be 25% but 28% (if the owner chooses not to combine the rents).
The SII management services highlight that the lease contract “signed between the applicant and the legal entity ‘X, Lda.’ does not demonstrate that the lease is intended for the housing of a specific (individual) person”, the TA cannot consider that it is a housing lease contract and, as such, benefit from taxation at the regional rate of 25%.
“Thus, the real estate income derived from the lease in question will be taxed at the regional rate of 28%,” determines the same response, now publicly disclosed.
It should be noted that in addition to providing for a lower IRS rate for rentals of permanent housing, the current law also includes additional reductions for longer-term rental agreements.
Source: Observadora
