HomeFITNESSHow to use PPR to pay the house installment and still make...

How to use PPR to pay the house installment and still make money with it

If you’ve never done a PPR before, consider doing one this year. Know why.

These opportunities don’t come along every day, or every year. As you know, when you make a PPR, you can deduct 20% of the amount you subscribed to the IRS to be paid the following year, if you have withholding tax.

That is, if you put 1,000 euros in a PPR in 2022, when you submit your IRS in 2023 (referring to the previous year) you will receive another 200 euros in reimbursement or pay 200 euros less in tax, if you have to pay (400 euros is the limit maximum, even if you make a PPR with 10 thousand euros).

But there is one condition: you cannot redeem this PPR outside the conditions provided by law. There are several articles that explain what these conditions are, but we will focus on the one that interests us for this tip. Legally – after 5 years – you could use the money you put into that PPR to pay the mortgage loan installments (note that it is not amortization).

The big news is that this year, 2023, there is an exception provided for in the State Budget that allows you to withdraw that money to pay the mortgage payment even if the PPR has not yet completed 5 years.

In other words, if you made a PPR last year (2022 or before), you can now pay the next installments with that amount, and with the money that remains in your account, resubscribe to the same PPR or another and thus deduct the 20% on the IRS that you deliver in 2024 (referring to 2023).

Accounts made, you can make 400 euros twice with the same money. If a couple has subscribed 2000 euros each (aged up to 35 years), they can “make” 1600 (800+800) euros “for free” in IRS deductions in 2 years.

Of course, I’ve already started to receive criticism from some people saying that the spirit of the PPR is to save money for renovations, etc., and that to do this is to distort the law. What I want to show you is that, during one of the biggest financial crises of recent decades, with mortgage loan installments practically doubling and with the highest inflation in the last 30 years, we must take advantage of every opportunity that the State gives us to mitigate the financial difficulties of citizens.

It is not illegal

You are doing everything within the law. If the legislator did not intend this to happen, he would have said so expressly. I can’t believe they don’t know what they’re doing. As soon as I read the law, I realized that this was possible in less than 5 seconds and that there was no limitation. It’s there in black and white.

Another criticism that emerged is that few Portuguese people can make a PPR to enjoy the tax benefits. Yes, it is true that there are many families who live on a penny. It’s not for those that I’m giving this tip.

The warning I want to share is that when we become financially intelligent and manage our money rationally and not emotionally and impulsively, we start making choices that end up making us money in the future.

I can always choose between buying a very expensive new mobile phone or changing my car every 2 years, or postponing the purchase of a new car and putting the installment amount of 150 or 200 euros monthly in a PPR. By doing this, instead of having an expense, I now have an income. They are choices. If you’ve never done a PPR before, consider doing one this year. It could be the beginning of your new financial life.

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