Income from displaced persons working more than 100 km away can be deducted
People who have to go to work for more than 100 kilometers and want to make their home profitable will be able to deduct the rent of the house next to the new job from this income, the Council of Ministers approved today.
© Lusa
Economia Rendas
The issue is a bill approved today by the Government that, according to the Minister of the Presidency, António Leitão Amaro, aims to eliminate disincentives to labor mobility, creating a neutrality between what is received as rent from the house that is left and the rent that is paid for the house that has to be rented.
"When someone has to go to work to a place more than 100 kilometers from home and when leaving rents their house to a third party and has to rent [a new] house, we allow the rent paid to be deducted from what is received in the house of origin", said the minister.
In this way, the IRS paid for the rent received will only be levied on what is left after the deduction of the house rented in the new workplace, creating a situation of neutrality.
The minister said that there are no limits to the amounts that can be deducted since the measure is limited to the value of the rent that will be paid and the income generated by the house that is owned.
For example: if a person rents their house in Lisbon for 1,000 euros and goes to work in Coimbra where they start living in a rented house for 700 euros, they will be taxed on IRS on the 300 euros of monthly rent that they receive more than they pay.
Ultimately, if they rent the house they leave for 1,000 euros and rent another in the new workplace also for 1,000 euros, there will be no tax to be paid because what is paid is fully deducted from what is received.
According to Leitão Amaro, this is "a measure that tends to seek to neutralize the tax impact of a change of job", thus seeking to "encourage this mobility or eliminate disincentives to mobility".
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