The delivery of the Personal Income (IRS) started on April 1st. Taxpayers have until June 30 to submit this tax return to the Tax Authority.

In order to reduce the tax payable or maximize the refund to be received, there are several situations covered by the IRS Code, including real estate expenses. Find out what's included and what exceptions to be aware of.

According to article 78-E of the IRS Code, the taxpayer "may deduct 15% of interest on Housing Credit contracts, intended for the purchase, construction or improvement of real estate for own and permanent housing up to a limit of 296 euros" , explains Dina Raimundo, CEO of Twinkloo, an online credit intermediary.

However, this deduction is only possible for housing loans that were concluded until December 31, 2011. Therefore, "people who have taken out their Housing Credit - or who have transferred it to another institution - at a later date, will not be able to benefit from this measure", adds Dina Raimundo.

This deduction may be higher for taxpayers in the lower income tax brackets. For example, those who have a taxable income equal to or less than the value of the first bracket can deduct up to an amount of 450 euros.

Declare rents and reduce real estate expenses

In addition to mortgage interest, 15% of the amounts spent on rents, up to a maximum limit of 502 euros, can also be deducted from the IRS. This is a reduction that can be increased for those with lower incomes, up to 800 euros.

Still with regard to the deduction of rents, there is another increase that some taxpayers may benefit from. Since 2019, families who move to the interior of the country benefit from an increase in the limit of deductions for renting property for permanent housing purposes.

Thus, compared to the previous regime, there is an increase in the limit of IRS deductions from 502 euros to 1000 euros for 3 years, for families who transfer permanent residence to a new rented house in one of the municipalities in the interior of the country.

For those who are a landlord and have a house to rent, there are also a number of expenses that can be deducted from the rent received, as long as they are duly proven. This is the case of condominium expenses, Municipal Property Tax (IMI), municipal fees (sanitation, sewage, for example), maintenance and repair works or, among others, expenses with cleaning and porters.

The landlord can also deduct expenses that have been paid in the two years prior to the beginning of the lease, referring to conservation and maintenance works on the building, provided that the property has not been used for any purpose other than the lease.

Displaced student income

For those who have their children studying away from home and living in a rented property or room, since 2018 taxpayers can deduct part of the costs for housing displaced students. The Tax Authority considers that the money parents pay to accommodate a child who studies away from home should be considered, in this case, in education expenses.

For IRS purposes, young people up to 25 years of age and who attend an educational establishment integrated in the national education system located at a distance greater than 50 kilometers from the permanent residence of the household are considered displaced students.

Deduct expenses with property rehabilitation

Expenses with property tax deductible, in terms of the IRS, are not limited to those who bought a house or are leasing it. The costs borne by the owner related to the rehabilitation of a residential property can also be deducted by 30%, up to a limit of 500 euros.

However, only the charges for properties located in urban rehabilitation areas and recovered in accordance with the respective rehabilitation strategies or leased properties subject to a phased update of the rents under the terms defined in the NRAU - New Urban Lease Regime, which are object of rehabilitation actions.

If you bought a house, are leasing or are a landlord, don't forget to present all expenses on your annual income tax return.

This personal finance article is the result of a partnership between Twinkloo and Dinheiro Vivo.

Font: Dinheiro Vivo