Tax allowances

[steveh]

Can anyone clarify what's deductible for the purposes of Portuguese tax declaration?
We have a villa we rent out (tourist licence pending and have had permission to rent from lawyer who's dealing with it) and we declare our income for Portuguese tax. Our managing agent maintains cleaning/laundry and utilities are not deductible expenses. We've found out that friends who use a company to do their tax return have a document that states 'any expenses incurred as a result of or included in the letting of a property are allowable - eg, cleaning, water, electricity etc.' As this costs us quite a lot each year, I'd really appreciate it if anyone can put me straight.
Thanks.

[widge]

Hi Steveh,

Here is the actual calculation submitted on my UK income tax return.

Income / rent.

Less

Insurance
Council tax
Telephone
Repairs & maintenance
Security
Management fees
Agents fees
Accountant's costs
Gas, Electricity, Water
Maid/ Cleaning
Garden upkeep
Potuguese tax paid

Balance

The resulting loss has been recorded, but until very recently, not deductable. This year it changed and I have been able to recover the losses incurred for 2007 & 2008 as the rules on UK holiday lets were extended to all qualifying properties in the EU.

Hope this helps.

[steveh]

Sorry Widge - I mean what can we claim against on our Portuguese tax return - not UK.
Basically we've been told we can't claim for cleaning or utilities when villa occupied by renting guests - friends have been told they can.
Just wondered if anyone knows who's right. Thanks.

[carolyn]

Here is a list that we are sent by Sovereign of what is allowed/not allowed:

Maintenance – eg. security, pool, gardener
Repair Bills – to property only. Repairs/replacement to furniture are not allowed.
Property Insurance
Condominium paid
IMI - Rates for 2008 payable in 2009 – we will obtain this amount from the tax office.

Please note utilities (electricity, gas, water, telephone) are not allowable expense

However to claim you need proper receipts - 'Facturas' which can be hard to obtain from poolmen, gardeners etc
I dont think cleaning is allowed unless part of a conominium charge

Generally we find that you can claim very little as we never seem to have the correct receipts.
Hope this helps!

[pato]

Interesting post on Chit Chat, unfortunately I think it applied to English tax laws only, worth a read though