Tax on Rental Income – 2017*:
Until December 31st the income from the rents was taxed on 15% of revenues. After January 1st is taxed on 35% of revenues.
Basically, this means that the fiscal authorities consider that 65% out of the earnings are the business running costs (this is the deductible share) so they tax on the remaining 35%.
Example for €10,000.00 year rentals:
65% (€6,500.00 are tax exempted)
35% (€3,500.00) are subject to tax. The tax rate will depend on the global income in Portugal.
If the tax rate is 25% then the payable tax would be: €10,000.00 (year rent) x 35% (taxable share) = €3,500.00 x 25% (tax rate) = €875.00 (tax to be paid)
*By Francisco Braga – Portuguese Solicitor
Francisco Moreira Braga - Solicitadores / Solicitors
Mestre em ciências jurídicas / Master in law/ Maitre en droit
Tlm. / Mobile / Portable: + 351 961 569 209 - www.fb-legal-algarve.com
Escritório / Office / Bureau: Tel. +351 282 096 478
Rua Convento da Trindade - Empreendimento Iberlagos, Bloco J, Loja 6
8600-540 Lagos (Portugal)