Tax Relief: This Municipality Algarve decided to return more IRS by 2025

by Andrea
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Learn the tricks that accountants use to get a higher refund in IRS

In the coming months, thousands of Portuguese will feel extra relief in the pocket. A total of 42 municipalities decided to increase the discount on IRS for their residents, allowing them to be more money at the end of the month. But is your county among the beneficiaries?

More municipalities to return IRS

In 2025, a total of 186 municipalities will return part of the IRS to its citizens. The number represents an increase compared to the previous year, and of these, 42 decided to further reinforce the discount granted.

This movement occurs in a context of approaching municipal elections, encouraging the chambers to adopt measures that please taxpayers.

Gradual increase

Since 2007, municipalities have the possibility of returning up to 5% of IRS transferred by the state. Some cameras have been increasing this percentage gradually, allowing more families to benefit from a reinforcement in their available income.

Who gives more and who gives less?

The districts of Madeira, Faro and Guarda stand out for their generosity, returning most of the IRS to their citizens. On the other hand, Coimbra, Vila Real and Beja are the most contained in sharing this tax benefit.

The city of Funchal is one of the big surprises, returning to the entire 5% permitted by law. Lisbon also increased the percentage returned to 4.5%, while Vila Nova de Gaia rose 1.5 percentage points, reaching 2.5%.

However, not all municipalities adhere to this trend. In the Lisbon district, Sintra and Cascais continue to retain all IRS, while Almada, Oeiras and Loures apply modest reductions.

In the north and center of the country, cities such as Aveiro, Coimbra and Leiria also choose to keep the full tax.

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The complete list of 42 municipalities

The municipalities that decided to return more IRS this year are:

Norte: Braga, Felgueiras, Mondim de Basto, Póvoa de Lanhoso, Porto, Santo Tirso, Valença, Vila Nova de Gaia.

Center: Alcobaça, Ansião, Caldas da Rainha, Castelo Branco, Gouveia, Guarda, Miranda do Corvo, Oliveira do Bairro, Pedrógão Grande, Penamacor, Peniche, Rio Maior, Seia, Sertã.

Lisboa: Arruda dos Vinhos, Benavente, Cadaval, Lisbon, Vila Franca de Xira.

Alentejo: Alcanena, Évora, Estremoz, Mértola, Montemor-o-Novo, Portalegre, Vila Viçosa.

Algarve: Olhão.

Madeira Archipelago: Calheta (St. George), Funchal.

Azores archipelago: Ribeira Grande.

An incentive for taxpayers

As with IRS discounts are an effective way to relieve families’ fiscal burden, allowing them to increase saving or invest this money in other needs. This type of policy is also a competitive factor to attract new residents and companies.

In times of economic uncertainty, any tax reduction is welcome. This relief can be translated into hundreds of euros per year more in the families’ budget, making a significant difference at the end of the month.

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