PPR repayment for home loans with no cost or subscription date limits

According to the Ministry of Finance, early repayment of PPR to pay for a home loan can be made without penalty throughout 2023, regardless of the amount withdrawn and the subscription date.

“Taxpayers who require partial or full repayment of the LTP in 2023 to pay for the installment plan of loan agreements for their own and permanent housing may do so without any restrictions regarding the amount or the period of time already elapsed from the date of subscription, also not penalized,” he said in response to Luce, an official source in the Ministry of Finance.

If early repayment is made for a purpose other than the payment of mortgage loan installments, two restrictions must be observed so that there is no penalty: on the one hand, the repayment amount, which is limited by Social Assistance (IAS) and, on the other hand, must be oriented to deliveries ( subscriptions) completed before September 30, 2022.

“Taxpayers with pension savings plans (PPRs) may repay the PPRs without penalty up to the monthly IFRS limit before the expiration of 5 years after subscription, provided that the refund is related to amounts subscribed before September 30, 2022,” the same official source is needed .

For amounts subscribed and invested after this date of September 30, 2022, the rules provided for by law apply – either in Decree-Law No. 158/2002 or in the Tax Benefits Regulation (EBF).

The Ministry of Finance also notes that two situations (repayment without specifying a reason or repayment to repay a loan) “are cumulative”, that is, “the same taxpayer can simultaneously resort to two types of repayment of the PPR within the established limits.” .

The monthly IAS cap (which is set at €480.43 in 2023) is determined “by the taxpayer, not by the policy or financial institution,” the same official also said, and a monthly refund can only be requested up to the IAS value, although this cap may be the result of more than one policy.

Funded Retirement Plans (PPR), Funded Education Plans (PPE), and Funded Pension/Education Plans (PPR/E) can be paid off early without the penalties normally associated with them (such as IRS tax refunds) are provided by law , published in October last year, which includes several measures to mitigate the impact of rising inflation on household incomes.

In the State Budget for 2023, this measure was strengthened by the budget law, which stipulates that “during 2023, partial or full reimbursement of the cost of funded plans is allowed.” [PPR, PPE e PPR/E] for the payment of installments under mortgage lending agreements for property intended for the participant’s own and permanent residence, as well as installments for a loan for the construction or improvement of objects of own and permanent housing, letting housing cooperatives in their own permanent housing solutions, being exempted from the obligation to stay at least five years for mobilization without penalty” provided for in the EBF.

Thus, throughout 2023, early repayment is carried out under the same conditions as the law for persons in a situation of long-term unemployment, permanent disability or serious illness.

The Tax Relief Act provides an IRS relief equivalent to 20% of amounts invested in PPR, up to a maximum of €400 per taxpayer (if taxpayer is under 35), €350 (ages 35 to 50). ) and 300 euros (over 50 years old).

“The payment of benefits (…) has no effect, and the amounts deducted must be added to the IRS fee for the year of the fact check if any income is attributable to members or certificate refunds are provided, except in the event of the death of the subscriber or when, from the date of the relevant delivery has passed at least five years, as well as any of the situations defined in the law, ”the EBF determines.

In 2023, this penalty is suspended for early repayment.