Linkedin

Selling a property in Portugal | Tax relief

By Mark Quinn - Topics: Portugal, Tax, Tax in Portugal
This article is published on: 17th January 2022

As I covered in my last blog post, capital gains tax is charged on the sale of all property in Portugal irrespective of your residence status, and if the property qualifies as your main residence.

There are two situations in which the capital gain is exempt from Portuguese tax:

  • If you invest the proceeds of sale into another main home in Portugal, or EU/EEA
  • If the proceeds of a property sale are reinvested in an approved long term savings plan or pension

Any portion not used to purchase another main home, or reinvested in a savings plan/pension, will be taxed.

Whilst the first exception is relatively straightforward, the second exemption method is slightly more involved and there are certain conditions that must be met, such as (but not limited to):

  • On the date of transfer of the property the taxpayer, spouse or unmarried partner is in retirement or is at least 65 years old.
  • The investment into the structure is made within six months from the date of sale.
  • The property sold is the main home.
  • Withdrawals from the structure are limited to a maximum of 7.5 % p.a. of the amount invested.
  • You must declare your intention to invest the funds in such a structure on your tax return in the relevant year.

We can advise on the conditions and structure options in which to hold a qualifying investment.

Article by Mark Quinn

If you are based in Portugal or are thinking of moving to Portugal, you can contact Mark at: mark.quinn@spectrum-ifa.com for more information. If you are based in another area within Europe, please complete the form below and we will put a local adviser in touch with you.

Contact Mark Quinn direct about: "Selling a property in Portugal | Tax relief"

    The Spectrum IFA Group is committed to building long term client relationships. This form collects your name and contact details so we can contact you about this specific enquiry. For further information, please see our Privacy Policy.
     

    If you are in the Portugal area

    Click here to contact
    Mark Quinn
    If you are based elsewhere

    Click here to contact
    The Spectrum IFA Group