Finanças has just issued a binding ruling, PIV_30751, that clarifies that a long term rental where the tenant is a company can still qualify for the 10% reduced IRS rate for the landlord.
However, the property must be exclusively for the residence of someone connected to the company (e.g. an employee or managing partner).
Requirements to secure the benefit:
- The occupant must be identified in the contract by name and NIF
- Use must be exclusively residential, explicitly stated in the contract and maintained throughout
- The contract must prohibit subletting, transfer of the contract position, and commercial/industrial/service use
- Rent must stay within the legal cap of €2,300/month
- The contract and any amendments must be reported to Finanças via the Modelo 2 stamp duty declaration
Key warning:
- If the company registers or uses the property as its registered office (sede), even partially, this disqualifies the residential purpose and negates the tax benefit. The actual wording of the contract and the real use of the property are what matter most.
