Owners who remove their properties from Local Lodging and make them available for long-term letting can be spared mandatory CGT assessment. This push to long-term letting integrates the government’s package of proposals in the 2018 State Budget. Once confirmed, this measure will be the only Capital Gains Tax refuge once an owner stops an “AL” activity.
Beginning in 2018, taxpayers with earnings exclusively from Local Lodging (Category B) will be exempt from SS contributions. Those who accumulate salaried income with self-employment earnings from “AL” will only be excused from monthly Social Security payments on their green receipts below a gross of €2,450 per month. Any excess shall be assessed at the rate of 21.4%. The measure is expected to encourage “AL” compliance which has already quadrupled over the past three years.
Individuals who reside in tax havens and own residential property in Portugal are free from paying the 7.5% surcharge applied to the new Additional Municipal Property Tax (“AIMI”). Only companies domiciled in tax havens – offshore companies – are subject to the aggravated rate on the full ratable value (“VPT”) of residential properties. “AIMI” replaces Stamp Tax, which provided for the application of a tax rate of 1% on each property with a “VPT” greater than one million euros.
The General Assembly approved legislation that reduces from 23% to 0% the VAT charged by professionals of non-conventional therapies (alternative medicines such as acupuncture, herbal medicine, naturopathy, osteopathy, chiropractic, traditional Chinese medicine, etc.).
Not only will final consumers save directly with the exemption from VAT, these expenses will also qualify for medical tax credits in “IRS” reporting.