New Measures for Young Taxpayers Announced by Portuguese Government
This year, Portugal underwent general elections. We are diligently monitoring the implications of this political transition, particularly concerning tax and immigration matters.
On the 23rd of May 2024, the government formally announced a comprehensive set of measures targeting young taxpayers. These measures were structured around five key areas: tax reduction, housing, health, student accommodation, and student worker grants.
Regarding tax reduction, young taxpayers up to the age of 35 will be eligible for a Personal Income Tax reduction of up to 15%, dependent on their income level. This legislative proposal is set to take effect next year.
In the housing sector, the government intends to exempt young taxpayers under 35 from the Property Transfer Tax (Imposto Municipal sobre as Transmissões Onerosas de Imóveis - IMT) and the Stamp Tax on the purchase of their first permanent home. This exemption applies up to the fourth level of IMT, corresponding to property values up to €316,000.00. For properties valued between €316,000.00 and €633,000.00, a partial exemption will be applicable.
Concerning health, the government has extended the "Take Care" program to individuals up to the age of 30. This program addresses mental health issues among young people. The government will hire 100 psychologists, nutritionists, and nurses to make this extension. Additionally, 100,000 psychology appointments and 50,000 nutrition appointments will be made available for higher education students starting in September. Furthermore, menstrual products will be distributed free of charge in schools and health centres beginning in September.
Regarding student accommodation, initial measures have been announced, with further details to follow. The government will add 709 beds, strategically distributed to meet the needs of higher education students.
Student workers will be entitled to scholarships if their household's annual income does not exceed 14 times the minimum wage, amounting to an income threshold of €14,259.28 per year.
The Portuguese government is committed to implementing these measures to incentivise young taxpayers to remain in Portugal, enhancing its appeal as a place to live and work, and thereby reducing the need for economic emigration.
At LVP Advogados, we closely monitor government developments in our areas of expertise to ensure that we can offer our clients and readers the most up-to-date and knowledgeable information.
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