Companies that provide housing to their workers will have tax incentives from next year. The so-called “Tax incentive for housing for workers” provides discounts on IRC and also exemption from IRS.

The measure is foreseen in the State Budget for 2024 (OE2024) and responds to the moment when difficult access to housing can even compromise talent retention.

“The new housing support measure, more specifically the Tax Incentive for housing for workers, provides that the attribution of income to employees relating to the use of permanent housing located in the national territory by the employer, will be exempt from income tax (IRS) and Social Security contributions and contributions”, begins by explaining João Neves, Board Advisor at Capitalizar, a tax and financial consultant.

As explained by the consultant, this benefit will be in effect from January 1, 2024 and December 31, 2026 and will have the following conditions: “The housing must be located in national territory; Income must relate to housing allowances or equivalent or the use of housing provided by the employer; The IRS and Social Security exemption for the income mentioned above is the maximum value of the rents provided for in the Rental Support Program, and varies depending on the type of housing and the municipality; Excluded from this benefit are workers who are part of the employer's household, members of the employer's corporate bodies and workers who directly or indirectly hold a stake of no less than 10% of the share capital; The incentive does not apply, however, to financial subsidies for the payment of rent.”

In addition to this exemption, a depreciation quota corresponding to twice the maximum rate set out in the table attached to Regulatory Decree no. 25/2009, of September 14, may also be “deducted from the entity's taxable profit. (no. 3)”.

The expert considers that this is a good opportunity for employers to provide their employees with housing, either through direct provision or through the granting of subsidies or other equivalent income, enjoying exemption from IRS and social contributions, or an increase in depreciation costs in the case of transfer of owned properties.

The “Tax incentive for housing for workers” is expected to have a budgetary impact of two million euros, according to the Government.

Source: Jornal de Negócios