Finding a home often weighs on the decision to accept a job or move to another city. That is why some companies provide housing to their employees. Since 2024, Portuguese law has given this a specific tax framework, and the 2027 State Budget proposal plans to keep it for another year.
What is exempt
When a company provides permanent housing to an employee, this benefit in kind is exempt from personal income tax (IRS) and social security contributions. The exemption has a ceiling: the maximum rents under the Programa de Apoio ao Arrendamento (a public affordable-rent scheme), which vary by municipality and type of home, even if the property is not part of that scheme. Any amount above that ceiling is not covered.
What it means for the company
When the company owns the home and acquired, built or converted it to house employees, the property can be depreciated for tax purposes at twice the normal rate.
Not every employee qualifies: those who hold, directly or indirectly, 10% or more of the company’s capital or voting rights are excluded.
A simple example: in a family business, a managing shareholder with half of the capital cannot use this regime for themselves. The company can, however, apply it to a technician hired in another city, to whom it provides an apartment.
One more year
The current regime applies from 2024 to 2026. Portugal’s 2027 State Budget proposal, approved in principle by Parliament on 28 October, with the final vote scheduled for 24 November, extends the exemption until 31 December 2027. If your company already houses employees, or is considering it, it is worth following the final text and planning ahead.
Guiding these decisions throughout the year is part of our work with every client. Talk to us or book an exploratory meeting.
Sources: Law no. 82/2023 of 29 December (2024 State Budget); Draft Law no. 110/XVII/2 (2027 State Budget); Decree-Law no. 68/2019 of 22 May (Programa de Apoio ao Arrendamento); Regulatory Decree no. 25/2009 of 14 September.