Capital Gains Tax

Understanding Capital Gains Tax in Portugal

There is a Capital Gains tax in place in Portugal on the sale of a property at a rate of 28% for individuals and 25% for companies (non-residents).

If the money from a sale is re-invested then only 50% of the net taxable income will be subject to capital gains tax.

To calculate the taxable gain, you take the selling price, minus the acquisition costs, any costs incurred during the transfer of ownership, and also any property improvement costs that have incurred within 5 years of the sale.

Exceptions

There are a few exceptions to Capital Gains Tax in Portugal:

• If you are a tax resident of Portugal (Domiciled in Portugal) and you are selling your primary resident in Portugal and you buy another residence in Portugal. Importantly this rule applies for sales that are within 3 years after, or 2 years before.
• If the property in question was first occupied before January 1989 in your name.
• If you decide to reinvest the monies made from the sale of your Portugal primary residence into another primary residence in the EU, you are then able to roll over the costs.