As you may know from our previous articles, since the 31st of March 2015 there are several new obligations for Landlords that rent properties long term. These new tax requirements are raising many questions amongst landlords.
Am I obliged to issue electronic rental receipts? Can I authorize a third party to issue a rental receipt on my behalf? Will he have access to my tax information? How can I register rental contracts on the tax portal? We will try in this article to let you know the answer to some of the most common questions arising from this.
But first of all please be aware, to avoid confusion, that this article refers to long term rentals and it’s not applicable to owners that rent to tourists (short-term lets). The short term or holiday lettings, require a Local Lodging license and we have outlined this subject in other articles. Please email us and ask for our leaflet if you rent your property to tourists and we will send you information on this matter.
And always remember that if you rent a property in Portugal, no matter if long or short term, that income needs to be declared in Portugal. It’s not a matter of personal preference, it’s a matter of law.
Q: I have a house for rent. Is it mandatory to issue an electronic tax receipt?
A: Yes, for most people. Those that are obliged to issue electronic receipts for rental income are all the landlords who have rental income (category F), and need issue it once the rent was received or made available as an advanced payment.
Q: From when do I need to start issuing rental receipts?
A: This requirement came into effect in May, but landlords can continue to use paper receipts until November without paying the fine. Electronic receipts are required for incomes above 69.87 euros per month.
Q: What if chose to declare under category B?
A: If you have opted for the taxation as a business activity (category B), you are required to issue invoices every month and this also need to be reported to the tax office.
Q: Who is not required to pass electronic income receipts?
A: Landlords who opt for category F may be exempted from passing the electronic income receipt in two situations: if in 2014, their rental income was lower than 838.44 euros and cumulatively don’t have an official electronic mailbox. Are also not required to issue electronic receipts, the owners older than 65 years (as of 31-12-2014) and can continue to pass paper receipts. It should be stressed that, despite not mandatory, they can chose to do it electronically.
Q: Only as of May do I have to go electronic receipts?
A: The law started as of 31st of March 2015 and entered into force in May. However, with effect from the 1st of January 2015, which means that paper receipts for rental income for the months January to April, will have to be re-issued in May 2015.
Q: What happens if you only start issuing electronic receipts from November?
A: Although the law produces effects from May, the government has offered a trial period for landlords to adapt to the new reality. So, until November there will be no tax fines, but don’t be fooled it’s still necessary to issue the electronic receipts of the months between January and October, together with the receipt of November.
Q: I rented a property after March 31 2015 (after the new law). What should I do to issue electronic receipts of income?
A: In this case it is mandatory to submit your contract electronically and pay the stamp duty online. Basically, the main difference is that before you were required to go to the tax office, pay the stamp duty and register the contract, now everything is done online and the tax office is not allowed to accept your contract.
Please remember, we have special packages tailor made for landlords which allows them to have peace of mind, while we deal with all their tax affairs, assuring that you are compliant with the law. Feel free to contact us or pop in for a friendly chat.