The Government has approved, in the Council of Ministers, a decree-law that eliminates the extraordinary contribution of 15% on Local Accommodation and the rule that prevented reductions in IMI on these properties, after Parliament granted it legislative authorisation. The measure will have retroactive effects to December 31, 2023.

Without going into great detail, the Minister of the Presidency, António Leitão Amaro, announced, during the briefing of the Council of Ministers, that the Government approved “a decree authorised by Parliament that implements the law that extinguishes the extraordinary contribution on Local Accommodation and creates rules in IRS”.

The same legislation facilitates the exemption from IRS of capital gains generated by the sale of a house and reinvested in the purchase of a permanent home and allows workers who move more than 100 km from their place of residence to deduct the cost of the new rent from the property income obtained in relation to their original home.

Two months after the Assembly of the Republic approved the request for legislative authorisation, with the favourable votes of the right (PSD, Chega, IL and CDS) and PAN and against from the entire left (PS, Bloco, PCP and Livre), Luís Montenegro's Executive was finally able to move forward with the repeal of several measures from the Mais Habitação package of the previous Government of António Costa.

The extraordinary tax of 15% on Local Accommodation (AL) as well as the coefficient of age applied to these properties that prevents the age of the buildings from being reflected in the reduction of IMI were eliminated with effect from 31 December 2023. The retroactivity thus ensures that the owners of these businesses do not pay the contribution.

It should be noted that this tax had to be paid by June 15th, however, the current Executive postponed the deadline for payment of the contribution by 120 days, which corresponds to four months, until October 15th, until it could approve the repeal of the regime, which has now happened. Since the approved diploma takes effect on December 31st, 2023, that is, it concerns last year's financial year, AL owners will no longer have to pay the tax this year for the 2023 taxable event.