The Decree-Law approved by the Government has been published in the Official Gazette, revoking the controversial 15% extraordinary contribution on local accommodation (CEAL) and introducing measures to facilitate the geographic mobility of workers for IRS purposes.

The revocation of the CEAL and the setting of the ageing coefficient applicable to local accommodation establishments for IMI purposes, introduced within the scope of the “Mais Habitação” program by the previous Government, will have a retroactive effect to December 31, 2023, as had already been announced in June by the Secretary of State for Tax Affairs, Cláudia Reis Duarte.

Although the document published in the Official Gazette states that the revocation of both measures will only take effect from 31 December 2024, the Ministry of Finance, when questioned by ECO, confirmed that a change to the text has already been requested so that the revocation has retroactive effect to 31 December 2023.

This decision is a response to criticism from the local accommodation sector, which considered the CEAL to be unfair and penalising for the activity. With this revocation with retroactive effect, local accommodation owners are exempt from paying this contribution for the year 2024, the payment of which was initially scheduled to occur by 15 June - but which, in the meantime, was suspended for 120 days by the current Executive, until it could approve the revocation of the regime, as has now happened.

The Decree-Law, which comes into force today, also includes changes to the IRS Code to facilitate the geographical mobility of workers, allowing a deduction from property income of rents received from a residential lease agreement for their current home, expenses incurred in paying rent for a property used as their own permanent home, provided that they have moved to a location more than 100 kilometres away.

In addition, the current legislation also establishes the reduction from 24 to 12 months of the minimum period during which a property must have been their own permanent home to benefit from the exemption from capital gains on its sale in exceptional situations such as “changes in the composition of the respective household due to marriage or de facto union, dissolution of marriage or de facto union, or an increase in the number of dependents.”