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Meet the Law | Ministerial Order no. 91/2020 of April 14th

On 15th April 2020, the Ministerial Order No. 91/2020 entered into force, densifying the regime of the moratorium on rents and establishing the mechanisms for the demonstration of the decrease of income.

We answered a few questions:

1.    Who can benefit from the moratorium?

Who demonstrates a 20% decrease in household income, and an effort rate of more than 35% in the rent payment of their permanent residence.
This regime is also applicable to students who have a lease agreement and are located 50 km from their permanent residence as well as to guarantors of tenants who have no income.

2. Can Landlords also benefit from this regime?

The regime will be applicable to the Landlords when their decrease of income results from the deferment of rent payment by their tenants and the remaining available income of their household decreases below the value of the Social Support Index (IAS), i.e. below EUR 438.81 (value of the IAS for the year 2020 defined by Ministerial Order 27/200 of 31 January).

3.   What is the effort rate?

The effort rate is the share of the total monthly income of the household members destined to the payment of the monthly rent of the residence.

4.    How is the decrease of income calculated?

Both in the case of landlords who no longer receive their rent, and those who observe a decrease in their income, the value of this decrease is obtained through the difference between the income of the household members in the month in which they intend to benefit from the regime, with the income earned by the same household in the previous month.

In case of household members whose income arises from business or professional work under category B of the IRS code, when the income of the month before of the decrease is not representative, they may opt to demonstrate the decrease with reference to the same period of the previous year.

Please note that the household is defined pursuant the IRS code.

5.   How can I proceed with the deferral?

The exercise of the rights granted under Law 4-C/2020 of 6 April is performed by means of a communication to the Landlord, or to the Institute of Housing and Urban Rehabilitation, I. P., demonstrating the decrease of income and providing the respective evidence.

6.   Which incomes are relevant to demonstrate the decrease?

The calculation basis of the income decrease is determined according to the type of income. Accordingly:

  • In case of income from dependent work, will be the respective gross monthly value;
  • In case of business or professional income under category B of the IRS code, will be the value before VAT;
  • In case of pension incomes, will be the respective gross monthly value;
  • In case of real estate income, will be the value of the rents received;
  • In case of social benefits, will be the monthly amount of received on a regular basis;
  • In case of housing assistance, will be the monthly amount of received on a regular basis;
  • In case of other incomes, will be the amounts of collected on a regular or periodic basis.

7.   How can I demonstrate the decrease of income?

Once again, the evidence of the decrease of income is provided according to the nature of the income. Accordingly:

  • The income from dependent work is proven by the corresponding pay slips or by a declaration from the employer.
  • Business or professional incomes are evidenced by the corresponding receipts, or, in the cases where their issuance is not mandatory, by the invoices issued in accordance with the law.
  • Incomes related to social support or housing support are evidenced by the documents issued by the respective paying authorities or by other documents evidencing their receipt, namely obtained through Tax Authorities and Social Security websites.  

When, given the nature of the benefits, it proves impossible to obtain such declarations, the evidence is made by a declaration on the recipient's honour.

Authors

Luís Abreu Coutinho
Partner
Lisbon
Nuno Pena
Partner
Lisbon
Gonçalo Alçada Batista
Gonçalo Alçada Batista
Trainee
Lisbon