Families with housing credit will have a discount on the IRS

Families with mortgage loans will be able to benefit from a reduction in the IRS withholding tax rate, foresees the State Budget for 2023 (OE2023), determining that the measure benefits those who have monthly incomes of up to 2,700 euros gross. The measure, of voluntary adhesion, could benefit up to 1.4 million people and will have an impact on income from the IRS in the order of 250 million euros next year, according to Government estimates.

“In 2023, the withholding tax on income of Category A [dependent work] of the IRS is reduced to the rate of the step immediately below that corresponding to the monthly remuneration and family situation applicable to the respective holder of income”, says the draft law of the State Budget for 2023 (OE2023), which the Government delivered to the Assembly of the Republic.

What to do to benefit from the discount?
In order to benefit from this relief in the monthly tax payment, workers will have to, cumulatively:

have a loan for a permanent home,
and to earn a gross monthly remuneration of up to 2,700 euros – the benchmark used by the Government to define the allocation of the extraordinary support of 125 euros that is paid this month.
In addition, families will have to inform the employer, “prior to its payment or availability, the option of reducing the withholding tax provided”, through a declaration accompanied by the “indispensable elements for the verification of the aforementioned conditions, as well as the like any other tax-relevant information that occurs subsequently”.

This measure will join others that the Government is preparing to help families face the sharp rise in Euribor, the index used in more than 90% of home loans.

This is not support, but anticipation, in the words of Finance Minister Fernando Medina. This is because the tax reduction will be offset in the tax settlement that will be made in 2024. “Whoever receives reimbursement will receive less. And if someone paid, they will pay more the following year," said the minister.


Source: Idealist
​​​​​​Photo by olia danilevich on Pexels