In Cape Verde, the rent you collect does not fall under an arbitrary tax regime: it belongs to a dedicated income category, **Category C** of the IRPS, the personal income tax. Three figures shape everything that follows — a **20%** withholding at source, a possible deduction of **up to 30%** of gross income **only when you elect aggregation**, and an annual return (**Modelo 112**) that must be filed **by 31 May at the latest**. This tax guide applies both to resident owners and to **non-residents** who rent out property in Cape Verde.
This is not a yield or rental-strategy guide: it sets out the rules for taxing rental income, texts in hand, and points you to a local professional for your specific case.
1. Rent in Cape Verde falls under a specific tax category: Category C
The IRPS Code organises income taxation into five categories (art. 1.º n.º 2). Rental income belongs to **Category C**, known as *rendimentos prediais* — property income, meaning income arising from making a property available to others.
What the law places in Category C
Art. 11.º n.º 1 defines that scope precisely:
- income from the **transfer of the use** of **rustic, urban or mixed** property, or of **rights in rem** over such property — first and foremost **rent**;
- income from the **transfer of the operation** of **commercial or industrial establishments**;
- income from the **movable property** located in those establishments.
In other words, whether it is an urban home, a plot of land or a commercial unit, what you receive as rent falls within Category C.
What falls outside Category C: hotel rentals under a written contract
Art. 13.º provides an **exemption** for certain property income that would otherwise fall under Category C. Three conditions must be met **cumulatively**:
- the property concerned **forms part of a classified hotel establishment**;
- the income derives from the tourism operation carried out by the classified hotel establishment where the property is located;
- a **written tourism-operation contract** is signed **between the owner of the property and the operator of the hotel establishment**.
Where these conditions are met cumulatively, the income is not treated as Category C property income. This exemption targets a precise arrangement — making a property available to a classified hotel operator under a written contract — not tourist letting in general.
2. Who collects the tax on your rent: the 20% withholding at source
The tax is not always paid directly by the owner. Where the tenant falls into certain categories, it is the tenant who **withholds tax at source** from the rent and remits it to the State.
The rate: 20%
The withholding rate on Category C income is **20%**, withheld *por conta* — that is, **as a payment on account of the final tax due** (art. 48.º of the IRPS Code, original text). Decreto-Lei n.º 6/2015, which governs the withholding regime, confirms this rate in its **art. 10.º**.
Who is required to withhold
The 20% withholding must be applied by entities that **keep, or must keep, organised accounts**, including in particular:
- **public entities and bodies**;
- **international organisations**;
- **non-governmental organisations (NGOs)**.
The case of small companies (REMPE)
The regime does not stop at large structures. **Small companies** (REMPE) are **also required** to apply the **20%** withholding when they pay or make available Category C income to a **private individual** (art. 10.º n.º 2 of DL n.º 6/2015).
Summary of rates applicable to Category C
The official withholding matrix (DNRE) sets out the rates as follows:
| Situation | Category C withholding rate |
|---|---|
| Individual without organised accounts | 20% |
| Individual with organised accounts | 20% |
| Taxpayer under the TEU regime | 4% |
| Corporate entity | 0% |
| Non-resident | 20% |
For an individual owner the reference withholding rate is 20% where the tenant is required to withhold (an entity with organised accounts, or a small REMPE company paying a private individual). A tenant who is not such a payer does not withhold: aggregation then becomes mandatory.
3. Taxable base, aggregation and the 30% deduction
Two things that are often confused must be kept apart: the **base** on which tax is computed, and the **tax regime** (withholding/liberatory or aggregation). This is precisely where the Code's numbering changed between 2014 and 2020.
Taxation on the gross amount through a liberatory rate
In its consolidated version, art. **37.º n.º 1** (formerly art. 36.º in 2014) lays down the following principle:
- Category C income is taxed **on its gross amount, without any deduction**, by applying the **liberatory rate**, when the rent is paid or made available by an entity with **organised accounts** or by a REMPE taxpayer as a small company.
Aggregation: optional or mandatory depending on the payer
The decisive point is this:
- where the payer is an **entity with organised accounts** (or a small REMPE company), **aggregation is merely optional** (*englobamento meramente facultativo*);
- where the payer is a **private individual**, **aggregation becomes mandatory**.
The deduction of up to 30%, reserved for aggregation
- **Where aggregation applies**, the gross Category C income may benefit from a **deduction of up to 30%**, corresponding to **maintenance and conservation expenses** borne by the taxpayer and **supported by documentary evidence** (art. 37.º n.º 2).
- **Without aggregation**, there is **no deduction**: the tax applies to the gross amount.
This deduction is therefore the counterpart of aggregation: it exists only if you aggregate.
Special case: subletting
For **subletting**, the **difference between the rent received by the sublessor and the rent that sublessor pays** benefits from **no deduction** (art. 37.º n.º 3, formerly art. 36.º n.º 2). This specific rule applies in addition to the general rules above.
4. Non-resident owners: what applies to you
The regime is specific for owners who are **not resident** in Cape Verde and who have **no permanent establishment** there.
Withholding of a liberatory nature, with no option to aggregate
Category C income obtained in Cape Verde by a **non-resident** without a permanent establishment is subject to **withholding at the above rates**, which **always has a liberatory nature**, **with no option to aggregate** (art. 51.º of the IRPS Code, original text; art. 13.º of DL n.º 6/2015). In other words: the 20% withholding applied by the tenant discharges the tax due, and the non-resident has no option to aggregate.
When withholding cannot apply: mandatory return and aggregation
Where the withholding at source **cannot be applied**, taxation is then carried out **by mandatory return and aggregation**. This is the second branch provided by art. 51.º (and echoed in art. 13.º of DL n.º 6/2015).
In practice, a non-resident should therefore check two things with a local professional: (1) whether the tenant is indeed a payer required to withhold; (2) if not, how to declare and aggregate the income.
5. Filing: Modelo 112, by 31 May at the latest
Beyond withholding by the tenant, an annual filing obligation falls on the recipient of the income.
Who is required to file
Recipients of Category C income are required to file an **annual income return** (art. 74.º n.º 1 of the IRPS Code), made through **Modelo 112**, whose instructions expressly cover "*Rendimentos Prediais, categoria C*".
The deadline: end of May, i.e. 31 May
- The **general deadline** for filing Modelo 112 is **the end of March** for **taxpayers with Category A income only who choose to file (the filing then being optional)**, and **the end of May** for the **other categories**, hence **Category C**.
- **For 2026**, the filing of Modelo 112 by Category C taxpayers is set **at the latest on 31 May**.
How: electronically
Filing is done **electronically**, via the platform **www.portondinosilha.cv**. The official tax calendar notes that failure to file constitutes an offence.
6. IPI, ITI and Category C: three taxes not to be confused
Three different charges coexist around the same property. Confusing them is the most common source of error.
- **IPI** — an **annual** tax on the **ownership** of a property. It is paid regardless of whether the property is rented out.
- **ITI** — a tax on the **transfer** of a property, arising on a sale or transfer of title.
- **IRPS Category C** — the tax on the **income** generated by renting. That is the subject of this guide.
Three taxes, three distinct events: **owning** (IPI), **transferring** (ITI), **renting** (Category C). If you are preparing an exit, the tax on the sale falls under IRPS Category E — see Selling Property in Cape Verde: Steps and Tax. And if you let short-term, the relevant licence follows its own logic — see Short-Term Rental in Cape Verde: the Alojamento Complementar Licence.
7. Does the 2026 tax reform change your rental taxation?
The answer, established by reading the texts directly, is **no** as regards Category C.
The 2026 tax reform concerns **two new property taxes**:
- the **ITI** (transfer), approved by **Lei n.º 54/X/2025**;
- the **IPI** (ownership), approved by **Lei n.º 55/X/2025**.
Neither of these codes touches the IRPS.
As for the **2026 State Budget Law** (**Lei n.º 69/X/2025**, of 31 December), it contains only **one amendment** to the IRPS: its **art. 30.º** amends **art. 22.º** of the Code, that is, the **non-habitual resident (RNH) regime**. It amends **neither Category C, nor the withholding rate, nor the filing deadline**.
**In short**: the 2026 reform concerns the taxation of **assets** (owning, transferring), not the taxation of **rental income** (Category C). The regime applying to your rent remains that of the IRPS Code in its consolidated version.
8. Points to watch
Before relying on this guide to act, keep the following in mind.
- **Check the edition of the text in force.** The Code's numbering changed: art. 36.º of the original version (2014) became art. 37.º in the consolidated version (republished by Lei n.º 86/IX/2020). Always state the edition you are referring to. Art. 48.º, art. 51.º and art. 74.º are cited here in the original numbering.
- **A source discrepancy to be aware of.** Some pages quote a 10% withholding on rent. That is incorrect for Category C: the official texts set 20%. The 10% rate concerns other income categories.
- **A possible difference in your situation.** Whether your tenant is a company or a private individual determines whether aggregation is optional or mandatory — and access to the 30% deduction depends on it. The calculation is your own.
- **This guide is not personalised tax advice.** It sets out general rules as they appear in the texts. To work out your own case and complete your return, use a **local accountant**.