Capital Gains Tax in Portugal

Updated on Tuesday 02nd February 2021

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The capital gains tax is imposed on different assets or properties you own in Portugal. Having real estate investments or gaining profits from rented properties are subject to capital gains tax in Portugal, so it is important to observe the legal requirements in this matter. Tax registration and compliance are offered by our Portuguese lawyers to those interested in this topic. We can assist foreigners start a company in Portugal by handling all the legal aspects.

How does the capital gains tax apply in Portugal?

There are specific categories where the capital gains tax applies and here are a few examples:

The capital gains tax for the sale of a property in Portugal is set at a 28% rate for natural persons and 38% for foreign companies.
The reinvested profit from a sale of a property will be levied only on 50% of the net taxable income.

It is important to note that the taxable gain is calculated by cutting the acquisition costs and any expenses related to the transfer of ownership, from the selling price. There are also capital gains tax exemptions in Portugal that can be discussed with one of our lawyers in Portugal.

Capital gains tax exemptions in Portugal

There is no capital gains tax imposed on the sale of a primary property/residence of a Portuguese occupant. The same is available for property purchase in Portugal, as such tax does not apply. Reinvesting the money gained from the sale of a property in Portugal to another primary residence bought in an EU country is no subject to capital gains tax. Such aspects can be entirely explained from a legal point of view by one of our lawyers in Portugal, so feel free to discuss with our team. Moreover, if you would like to start a business in Portugal and need help for incorporation, you can get in touch with our advisors and ask for legal support.

Do I need to file a return tax if I sell a property in Portugal?

Yes, every time you sell a property in Portugal, you need to declare the tax return in Portugal, regardless of the tax domicile you have. If you had a gain on the property transaction this means that you need to pay a tax, according to the applicable laws in Portugal. One should note that there is no capital gains tax imposed if the property you had was acquired before 1989, yet, a declaration in this matter must be done. Feel free to discuss all the legal aspects with one of our Portuguese lawyers.

You can deduct expenses from capital gains

The sale of a property in Portugal also comes with deductions. In other words, the expenses incurred with the sale and purchase of a property like a real estate commission, for example, can be deducted. Property renovations or the expenses for energy certification can also be deducted. You can talk to our attorneys in Portugal if you want to know more about how to deduct expenses from capital gains in Portugal.

Capital gains tax imposed on foreigners in Portugal

The capital gains tax imposed on the sale of properties, securities, bonds, or shares of foreigners with residency in Portugal is set at a 28% rate. Since January 2018, the capital gains tax is imposed on trusts and companies in Portugal, if more than 50% represent real estate assets. The legal aspects in this matter can be discussed with our specialists.

The real estate sector in Portugal

The property prices in Portugal started to slow down a little, and this phenomenon was registered during Q2 of 2020. Still, the real estate sector continued to develop and to receive investments from abroad. In addition, the Golden Visa Program attracted many foreigners who purchased properties in cities like Lisbon and Porto. Here are some interesting facts and figures that might boost your attention:

More than 800 Golden Visa were granted in Portugal in the first 7 months of 2020.
The Golden Visas granted in Portugal during the above-mentioned period represented investments of around EUR 439 million.
Citizens from Brazil, USA, Vietnam, and Turkey gained Portuguese visas through the Golden Visa Program.

Choosing our lawyers in Portugal

Interested in the tax structure of Portugal? Would you like to obtain legal advice for tax registration in Portugal? You can rely on the legal support of our Portuguese lawyers who act with professionalism and proficiency in the best interest of their clients. Plus, international entrepreneurs who want to start a business in Portugal can solicit legal advice and guidance from our experienced lawyers in Portugal who can oversee the entire incorporation process. The business-related legislation might seem complex to foreigners found for the first time in Portugal, so legal advice and assistance can be offered by our experts.

You are invited to contact our law firm in Portugal and find out more about the capital gains tax imposed and about other important taxes in this country.