The reduced IRS rate of 5% is a tax incentive that the law gives to owners who carry out work on properties located in an Urban Rehabilitation Area (ARU). And now the tax authorities have said that there is no time limit for benefiting from this mechanism - all that is needed is for the rehabilitation work to take place between January 1, 2008 and December 31, 2020 and for the property to be rented.
If these rules are complied with, according to an opinion from the Tax Authority (AT), quoted by Lusa, the value of the rents received by the owner will pay a 5% IRS rate, instead of the 28% autonomous rate that currently applies to most property income.
The Code of Tax Benefits is silent on the period for which this reduced rate applies, but the tax authorities have now clarified that it “will apply for as long as the property is rented”, thus answering a taxpayer's question.
In addition to the 5% rate, for rehabilitated houses located in the ARU, the tax authorities also allow owners to benefit from exemption from IMI and IMT or to deduct 30% of the cost of the work from the IRS, up to a limit of 500 euros.
Source: idealistanews