Do I pay capital gains tax in Portugal?

As soon as WESTMARK estate agency gets involved in the sale of your property we will inform you with regards to capital gains. So before your house is on the market to sell you are complete aware of the financial consequences, capital gains tax included.

Obviously WESTMARK estate agency is going to sell your property and you will make a nice profit. It is our job to inform you completely and make sure your profit will be maximized.

In Portugal, you’ll pay capital gains tax (Mais Válias) once you have sold your property with profit. Basically, you need to pay capital gains tax on the difference between the purchase price and the selling price, with some deductible costs and expenses.

The Portugues tax laws make a difference between EU citizens and non-EU citizens, which you need to be aware off.

EU citizen and portuguese residents

If you are a tax resident in Portugal and you sold your PRIMARY residency with a profit, you are exempt from paying capital gains tax. However, you need to reinvest the complete sales price (so not only the profit!) in your new PRIMARY residency in the EU, within 2 years after the sale of your property in Portugal.

If you are an EU citizen, not living in Portugal or a Portuguese citizen selling a secondary home, you need to pay capital gains tax.  From the total profit, 50% is added to your regular income in the year of selling. On that amount the Income tax (IRS) will be applicable

Special condition for retired people:

Capital gains can become tax free if you are of retirement age and re-invest the profits into an insurance contract or pension. It is important that you (or spouse/partner) is retired or over 65.

The total profit should be invested in a pension fund, state pension system or insurance contract within six months. When reinvesting in a pension, you must receive a maximum annual payment of 7.5% of the value of the funds.

Always as WESTMARK estate agency for advice, we will get you in touch with our professional partners to prevent you encountering any issues.