Companies that provide housing to their workers will receive tax incentives from next year. The so-called “Worker Housing Tax Incentive” provides IRC deductions and also relief from the IRS.
This measure is envisaged in the 2024 state budget (OE2024) and responds to a moment when difficult access to housing may harm talent retention.
“The new housing subsidy measure, specifically the tax incentives for workers’ housing, provides for the employer’s exemption from income tax (IRS) on the attribution of income to employees in connection with the use of permanent housing located in the national territory by the employer. “And contributions and contributions to social security.” , begins with the explanation of João Neves, Board Advisor at Capitalizar, a tax and financial advisor.
As the Chancellor explained, this benefit will be effective from January 1, 2024 and December 31, 2026 and will have the following conditions: “The housing must be located on the national territory; The income must be in relation to housing allowances or their equivalent or the use of employer-provided housing; The income tax and social security exemption mentioned above is the maximum value of rents stipulated in the rental subsidy programme, and varies depending on the type of housing and the municipality; Workers who are part of the employer’s family, members of the employer’s corporate bodies and workers who directly or indirectly own a share of at least 10% of the capital are excluded from this benefit; But the incentive does not apply to subsidies to pay rent.
In addition to this exemption, it is also permissible to “deduct a depreciation share equivalent to twice the maximum percentage stipulated in the table attached to Regulatory Decree No. 25/2009 issued on September 14, from the establishment’s taxable profit. (No. 3).”
The expert believes that this is a good opportunity for employers to provide their employees with housing, either by providing housing directly or by granting subsidies or any other similar income, while enjoying exemption from the tax authority and social contributions, or an increase in depreciation costs in the event of transfer of owned property.
The “tax incentive for worker housing” is expected to have a budget impact of €2 million, according to the government.
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