Reducing VAT on electricity and increasing the approved income deduction for the specialty

The PS projects, which expand electricity consumption subject to a reduced VAT rate and increase the IRS deduction for residential rent, were approved Wednesday by the specialty, with the SDP voting against.

In the case of the deduction of house rent, voted on this Wednesday in the Commission on Budget, Finance and Public Administration (Cofap), the PSD was isolated in voting against it, while all other parties voted in favor of the initiative proposed by the Socialists.

We are talking about a gradual increase in the size of the IRS deduction along with housing rent from the current 600 to 800 euros.

Currently, tenants can deduct 15% of their home rent from the IRS, up to a maximum of €600. The €200 increase proposed by the PS forecasts that 50% of the increase will occur in 2025, 25% in 2026 and 25% the following year.

Cofap deputies also approved, in particular, the ES project, which expands the share of electricity consumption subject to a reduced VAT rate, while the initiative was approved by the PSD, who voted against, Chega abstained, and the other parties voted in favor.

In this case, the measure determines that domestic electricity consumption (for contract capacity not exceeding 6.90 kVA) is subject to VAT at a rate of 6% up to 200 kWh for a period of 30 days. For large families (with three or more dependents), consumption, taking into account the reduced VAT rate, increases to 300 kWh over a 30-day period.

This measure will come into force in January 2025.

Chega submitted a proposal to amend the draft PS, which proposed that the expansion of electricity consumption, taking into account the reduced VAT, should be calculated per dependent, and not by large or small family type, so as not to harm households with one or two dependents, but was rejected , and the SDP, PS and Livre voted against.

MPs also unanimously approved a series of hearings as part of the Livre project, which expands the provision of subsidized housing loans to household members living with a disabled person.

The law only applies to people with disabilities and over 18 years of age who have access to a subsidized housing loan. Thus, the Livre measure aims to allow, for example, the parents of a disabled minor who needs to carry out adaptation work at home or buy a house more suitable for the needs of the minor, to take advantage of this benefit.