Skip to main content

If you are selling a house in Portugal, there’s more to it than simply receiving the profits from the sale and calling it a day. As with most things, there are some costs that you have to take into consideration. As well when making your decision on whether or not to move forward with the sale of your house in Portugal.

While this may be obvious, it’s important to keep in mind that you won’t be able to deduct any of these costs from the amount you get back at the end of the sale. That is if you don’t plan ahead!

 

What are capital gains?

When it comes to selling a house in Portugal, there are a few important things to consider when it comes to taxation. One of those is capital gains.

When you sell a house, the profits made are known as capital gains. These can be calculated by taking the difference between the purchase price and the sale price. So, if you buy a house for €100,000 and sell it for €150,000, you would have made €50,000 capital gains.

Capital gains from real estate assets in Portugal are subject to taxation. The amount of tax you will be liable for depends on your personal circumstances and the amount of profit made. For example, if you make a capital gain of €1,000 or less then you will not have to pay any tax. However, if you make more than €1,000 then you will have to pay taxes on the entire amount.

In Portugal, there are two separate categories or categories: short-term and long-term capital gains. Short-term capital gains refer to profits made from property sales that occur within one year of purchase. Long-term capital gains refer to profits made from property sales that occur over more than one year of purchase.

The amount of tax you will be liable for in each category also depends on your personal circumstances. Short-term capital gains tax can range from 28%-56% and long-term capital gains tax can range from 18%-36%.

It’s important to note that if you make a loss on the sale of your property, there is no tax due on that. This means that it’s possible to offset some of your capital gains against any losses incurred during the sale process.

 

How does Portugal tax these?

“How will I be taxed on my gains?” Is one of the first questions asked when selling a house in Portugal.

Under Portugal’s tax system, any gains you make from the sale of a real estate asset are considered capital gains. This means you will be liable to pay capital gains tax on the profits from the sale of your home. The amount of tax you will be liable to pay can be easily calculated. This can be done by subtracting the purchase price from the sale price and then applying the relevant rate of tax.

In general, capital gains tax is calculated as 28% for non-resident taxpayers and resident tax payers can pay as high as 35%. However, if there is a loss instead of a profit, then you will not be liable to pay any tax.

It is important to note when buying or selling property in Portugal, you may be requires to pay stamp duty. The stamp duty rate is 0.8% for buyers and 0.6% for sellers. In addition, a municipality tax of up to 6.5% may also be applicable depending on the location of the property.

Overall, understanding the taxes applicable to real estate transactions in Portugal is key to calculating the true cost of selling a house. Being aware of all these costs will help you plan and budget accordingly. So you can make the most out of your real estate investment.

 

What do the calculations include?

When calculating the capital gains from a house sale in Portugal, you must take a few facts into consideration. These include the purchase price of the property. As well as the sales commission, legal fees and taxes related to the transfer of ownership.

The purchase price of the property is the price paid when it was initially purchased. This amount can be deducted from the total sale price when calculating the capital gains.

Sales commission is the amount paid to a real estate agent who facilitates the sale. This amount can also be deducted from the sale price when calculating capital gains.

Legal fees refer to the amount paid to a lawyer to assist with the transfer of ownership. This includes costs such as deed registration and notary fees, which may also be deducted when calculating capital gains.

Finally, taxes related to the transfer of ownership are also included in the calculation. In Portugal, this includes stamp duty and registration tax, which is based on a percentage of the sale price. These taxes must be factored into the final capital gains calculation before tax can be paid.

 

What are the consequences of not declaring them?

When selling a house in Portugal, it is important to remember that capital gains from real estate assets. You must declare these to the Portuguese Tax Authorities. Failure to declare these gains could result in significant financial penalties, including fines, back taxes, and other sanctions.

In order to ensure compliance with Portuguese tax law, homeowners should always obtain an official appraisal from a certified real estate appraiser. This appraisal will help you determine the current market value of your property. Accurately reporting the sale of the house is also of vital importance.

It is also important to keep records of all financial transactions related to the sale of the house, such as closing costs, realtor fees, legal fees, and loan interest. Submitting these documents to the Portuguese Tax Authorities is also very important.

Finally, it is important to note that capital gains from a house sale may be subject to additional taxes or levies depending on the circumstances of the sale. Consulting a tax expert before selling a property is advisable as they will ensure all your taxes are paid correctly and on time.

 

Speak to an expert

Selling a house can be an intimidating experience, especially when you factor in the potential financial implications. If you’re looking to sell a property in Portugal, it’s important to understand the capital gains tax implications.

Capital gains from real estate assets correspond to the profit obtained from a house sale. This profit is calculated as the difference between the price at which someone bought a property and the price to which this same property has been sold. If there is a loss instead of a profit, then there is no tax.

The Portuguese government requires everyone who sell their property in Portugal to report capital gains and pay taxes on it. It’s important to note that this applies even if you are not a resident of Portugal. So it is important to understand the process before selling your property.

If you want to learn more about capital gains tax on your assets then why not speak to one of the experts at RHJ Law. We can help you to understand more about your capital gains taxes.

Leave a Reply

Close Menu
Download our FREE

Moving to the UAE- Ready to start a new life in the UAE; we'll help you look at your options!

Download our FREE

Moving to Malta brochure, we'll help you to gain your Maltese visa and everything else you need to start a new life, or business, in the Mediterranean!

Download our FREE

D4 Visa brochure- have you always wanted to study abroad? Well great news, RHJ Law will help you to get there!

Download our FREE

Golden Visa brochure, giving individuals the right to work, live and study in Portugal - as well as the freedom to travel across Europe!

Download our FREE

D7 Visa brochure & become an expat living in Portugal in just a short amount of time!

Download our FREE

D6 Visa brochure, if you are moving to Portugal as a family then this is the visa for you!

Download our FREE

D3 Visa brochure, the ideal choice for Highly Qualified Individuals & Startups in Portugal!

Download our FREE

Insurance brochure, choose the best plan and find out how to start it!

Download our FREE

Non-habitual residency brochure & benefit from tax exemptions & privileges over a 10-year period!

Download our FREE

D2 Visa brochure & make your move to Portugal easy!