Early redemption of Retirement Savings Plans (PPR) for home loan payment can be made, without penalty, throughout 2023 regardless of the amount to be withdrawn and subscription date, according to the Ministry of Finance.
“Taxpayers who request the partial or total redemption of the PPR in 2023 for the payment of installments of credit contracts for own and permanent housing may do so, without any limit as to the amount or as to the time period already elapsed from the subscription, not being also penalized”, he said, in response to Lusa, an official source from the Ministry of Finance.
If the early repayment is made for a purpose other than the payment of the mortgage loan installments, two limits must be observed so that there is no penalty: on the one hand, the repayment amount, which is limited to the Social Support (IAS) and, on the other hand, must focus on deliveries (subscriptions) made by 30 September 2022.
“Taxpayers holding retirement savings plans (PPR) can redeem the PPR, without penalties, up to the monthly limit of the IAS before 5 years have elapsed after subscription, provided that the reimbursement is related to amounts subscribed until September 30, 2022” , needed the same official source.
For amounts subscribed and invested after that date of September 30, 2022, the rules provided for by law apply – both in Decree-Law No. 158/2002 and in the Statute of Tax Benefits (EBF).
The Ministry of Finance also states that the two situations (redemption for no specific reason or redemption for credit payment) “are cumulative”, that is, “the same taxpayer can simultaneously resort to the two types of PPR redemption, within the established limits” .
The monthly limit value of the IAS (which in 2023 is set at 480,43 euros) is determined “by taxpayer and not by policy or financial institution”, the same official source also said, and it is only possible to request a monthly refund up to the value of the IAS, although this limit may result from more than one policy.
The possibility of early redemption of savings-retirement plans (PPR), savings-education plans (PPE) and savings-retirement/education plans (PPR/E) without the penalties that are usually associated with them (such as the return of the tax benefit with the IRS) is provided for in the law published in October last year, which includes several measures to mitigate the impact of rising inflation on household income.
In the State Budget for 2023, this measure was reinforced, with the budget law determining that “during 2023 partial or total reimbursement of the value of savings plans [PPR, PPE and PPR/E] is allowed for the payment of installments of credit agreements secured by a mortgage on property intended for the participant's own and permanent residence, as well as installments of credit for the construction or improvement of properties for own and permanent housing, and deliveries to housing cooperatives in solutions for permanent own housing, being exempted from the obligation to remain at least five years for mobilization without the penalty” provided for in the EBF.
In this way, throughout 2023, early redemptions enjoy the same conditions as the law provides for those who are in a situation of long-term unemployment, permanent incapacity for work or serious illness.
The Tax Benefits Statute grants an IRS benefit equivalent to 20% of the amounts invested in the PPR up to a limit of 400 euros per taxpayer (if the taxpayer is up to 35 years old), 350 euros (between 35 and 50 years of age) and 300 euros (over 50 years old).
“The enjoyment of the benefit (…) is without effect, and the amounts deducted, increased by 10%, for each year or fraction, elapsed since the year in which the right to deduction was exercised, be added to the IRS collection of the year of verification of the facts, if any income is attributed to the participants or reimbursement of the certificates is granted, except in the event of the death of the subscriber or when at least five years have elapsed from the respective delivery and any of the situations defined by law occurs” , determines the EBF.
In 2023, this penalty is suspended for early redemptions.
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