At a time when the tax authorities have already disclosed the total amount of expenses for tax deductions and the deadline for filing income tax returns is approaching, questions about this tax are beginning to arise. Some taxpayers who live in rented accommodation do not see this amount being taken into account in their property expenses. There are two reasons for this: either the landlord has not notified the tax authorities, or there is a discrepancy between the tax address and the permanent address.
This means that for those who live in a rented house whose address does not correspond to their tax address with the Tax Authority (AT), the tax benefit is not taken into account.
“If it is not the taxpayer's tax domicile, there is no right to tax relief. This condition is essential in order to benefit from the maximum tax deduction of €502,” explained Ernesto Pinto, tax expert at DECO Proteste, in statements to Notícias ao Minuto.
For the purposes of the 2018 IRS tax return, which will be submitted in April, there is no point in changing the address: “changing the tax address now will not solve the problem for this year's tax return,” explains Ernesto Pinto.
However, the tax expert offers two pieces of advice that may be useful to taxpayers in these situations. The first, if the tax address is correct, is for the taxpayer to manually enter the rental data. "This way, if the rental agreement and the rent paid to the landlord have not been declared by the landlord, the tenant can still benefit from the deduction. What may happen is that the AT will call on the taxpayer to present the supporting documents," he says.
The other, in the case of an incorrect tax address and the data duly communicated by the landlord, is that "in extreme cases, and if the taxpayer is willing to do so, they can complain to the tax authorities, or even go to tax arbitration or the tax courts. If you can prove that your residence is, in fact, the rented house, and even if the tax domicile is wrong, there are already decisions in favor of taxpayers," explains Ernesto Pinto.
Rents allow for a deduction of up to €502 on income tax
If everything is in accordance with the law, the rules in force provide for the possibility of deducting up to 15% of the amount spent on house rents from your IRS, up to a limit of €502. This means that it is more advantageous to deduct rented homes than in the case of mortgage loans, since in this case the limit is €296.
The final tax deduction amounts have already been calculated by the tax authorities and can be consulted on the Finance Portal. If you notice any errors or omissions, you can file a complaint until March 31. The filing of IRS tax returns, which has been extended by one month this year, begins on April 1.
Source: Noticias ao Minuto