Property owners who make properties available for rental at values at least 20 percent below median prices in the parish or municipality will benefit from full tax exemption on rental income for income tax and corporate tax purposes. The measure falls under government housing incentive programs and aims to increase the supply of housing for the middle class, seeking to curb the continuous rise in housing values throughout the national territory.
To access the tax benefit, contracts must be framed within official affordable housing schemes, with rents calculated based on quarterly data from the National Statistics Institute. In addition to the reduced value charged, tenants must have a maximum housing cost burden between 15 and 35 percent of the average monthly household income, and long-term contracts require a minimum term of three to five years.
Properties made available must meet strict parameters of habitability, safety, comfort, and energy efficiency, and must be registered and validated on the electronic platform of the Housing Portal. Landlords are also required to register contracts with the Tax and Customs Authority and enter into specific insurance policies protecting against involuntary loss of income and damage to the rented property.
The incentive fully eliminates the special property taxation rate, which can reach 28 percent, allowing owners to obtain net income frequently equivalent to or higher than what would result from higher values subject to standard taxation. Depending on municipal assembly deliberations, they may also access significant exemptions or reductions on municipal property tax and the Additional Municipal Property Tax during the contract period.
