Looking at 32 European countries, Global Property Guide concludes that Lisbon is the 6th European capital where it is most profitable to invest in a house to put on the rental market. According to the calculations of the international real estate consultancy, the gross profitability of housing rentals in Lisbon stood at 5.65% at the end of June this year.
There are therefore five European capitals where it is more profitable to rent out a house than in Lisbon. In first place is Dublin (Ireland), with an average gross profitability of 7.33%, followed by Rome (6.82%), Riga (6.46%), Bucharest (6.3%) and Podgorica (5.7%).
The European capitals where it is least profitable to buy a house to rent out are Oslo, Norway (2.46%) and Luxembourg (2.58%), according to the same data.
In addition to the European capitals, the real estate consultancy also analysed the average profitability of other Portuguese cities. And it concluded that in Setúbal, investing in a house to rent has an average profitability of 6.51%, higher than that of Lisbon. Porto, Faro, Aveiro and Braga had average profitability above 5%, but below that of the Portuguese capital, writes Público.
It should also be noted that the profitability rate calculated takes into account the tax burden of each country. In Portugal, income from housing has been subject to an autonomous rate of 25% (previously it was 28%) for short-term rental contracts since last October, with the entry into force of the Mais Habitação program. And this rate can be reduced further if the rental contract is for a period of more than 3 years.
The comparison of the tax burden on housing rentals between European countries is not straightforward, as some markets have a single rate and others have progressive rates. However, according to the same newspaper, it is possible to see from the data that Portugal is in the middle of the table with regard to the tax burden on property income, in line with other countries. And, therefore, the rental values charged in our country make it possible to offset the tax burden.