Updated: August 30, 2025

 

With attractive returns on investment and many desirable locations to choose from, Portugal is an excellent country to buy a property. Over the past few years, the Portuguese real estate market has garnered the interest of many international investors because property is very affordable compared to other Western European countries.

Taxation in Portugal can initially seem a little complicated as an important factor in the property purchase journey. In this Capital Gains Tax Portugal guide, we specifically focus on the Capital Gains Tax that Portugal imposes on monetary gains on asset sales, which is vital to understand when buying and selling property in Portugal.

We will explore what Capital Gains Tax in Portugal entails, how it affects Portuguese residents and non-residents who own and are selling real estate assets, and the potential exemptions from Capital Gains Tax in Portugal.

What is Capital Gains Tax (CGT)?

Capital Gains Tax is a tax that you may be liable to pay when you make a profit from the sale of a property or another capital asset. In most cases, capital gains are taxed at a flat rate of 28 percent. But, if you sell shares in small or micro companies that are not listed on the stock exchange, only 50 percent of capital gains will be taxed.

The amount you pay depends on your residency status in Portugal. For both Portuguese residents and non-residents, the tax on capital gains is levied on 50 percent of the capital gain from the sale.

Taxation comes into effect when real estate profits are added to yearly income. The rate may range from 12.50 percent to 48 percent, depending on the income tax rates as well as your earnings.

Note: The 28 percent flat rate is the default for capital gains from shares and other securities. However, this is not a universal rule for all capital gains, and do not apply to other assets like real estate.

In order for taxation to take effect, you, as the property owner, will need to disclose the tax return for the year in which you purchased the house, and the respective price paid when acquiring the property. If you have completed work or maintenance on the property, such as installing a new heating system, you should declare this. You will need to show the invoices and the amounts paid to be considered in the capital gains assessment.

As a property owner it is vital to understand Capital Gains Tax in Portugal in 2024. It is also essential to understand how your exposure to this tax will depend on your Portugal tax residency status, how you own the asset, and, if it applies to property, whether it is your primary residence.

To learn more, our Property Taxes in Portugal guide shares more details about all the taxes related to buying property in Portugal. If you want to discover more about Capital Gains Tax on cryptocurrency investment gains in Portugal, consult our Portugal Crypto Taxes guide, which covers the topic.

GC-ICON-30When does Capital Gains Tax apply in Portugal?

A capital gains tax (CGT) event in Portugal is triggered the moment you sell part or all of a qualifying asset. These sales can happen any time during the tax year, which runs from 1 January to 31 December each year.

Once you’ve made a taxable gain, you’ll submit it as part of your personal income tax return by 30 June of the following year.

You’ll need to report your capital gains to the Portuguese tax authority (Autoridade Tributária e Aduaneira, AT) and pay any tax due on time. Missing deadlines or filing incorrectly can lead to fines or penalties.

What assets are subject to Capital Gains Tax in Portugal?

Capital-gains-tax-Portugal-pngUnlike in other countries, the Capital Gains Tax in Portugal only applies to gains made on real estate and investments. Therefore, personal items are not subject to tax, and inheritance tax is only subject to a limited form of Stamp Duty.

Here’s a rundown of the most common assets that could trigger CGT when sold:

  • Real estate
  • Stocks, shares, and other securities
  • Corporate bonds
  • Mutual funds and investment funds
  • Derivatives
  • Real estate investment funds

If you’ve moved to Portugal and are earning from investments abroad, they’ll usually fall under Portugal’s CGT rules too. But here’s a silver lining: If your home country has a double taxation agreement (DTA) with Portugal, you can avoid getting taxed twice.

How to Calculate Capital Gains Tax (CGT) for Portuguese Residents

Capital Gains Tax PortugalRegarding Portugal Capital Gains Tax, Portuguese residents are required to pay real estate taxes on worldwide property and investments acquired after 1 January 1989.

Shares, bonds, and securities are taxed at a flat rate of 28 percent. Assets deemed to be from a “tax haven” or blacklisted jurisdictions that offer favorable taxation schemes are taxed at a higher tax rate of 35 percent.

The rules are pretty generous for Portuguese residents. For instance, only 50 percent of the gain from the sale of real estate is liable to be taxed. There may also be exemptions available, so it is best to check with a financial advisor.

Capital gains on real estate are added on to other income for the year and are taxed at Portuguese Income Tax rates, which range from 14.5 to 48 percent. Once all real estate profits have been added to your other yearly income, taxation will take effect.

Portuguese Capital Gains Tax on real estate is based on the real estate added value, which is the amount obtained by subtracting it from the property’s sale value. For Portuguese residents, the tax on capital gains is only levied on 50 percent of this added value resulting from the acquisition value and the sale value. The Capital Gains Tax rate is applied to this result.

We can break this down into an equation using the variables below to clarify the calculation:

  • SV: Sale Value of the property
  • AV: Acquisition Value of the property
  • CG: Capital Gains
  • T: Capital Gains Tax
  • R: Tax Rate

The steps to calculate the Capital Gains Tax can then be summarized as follows:

  • Step 1: Calculate the Capital Gains (CG) as the difference between the Sale Value (SV) and the Acquisition Value (AV):

CG = SV – AV

  • Step 2: Since the tax is levied on 50 percent of the Capital Gains:

Taxable Capital Gains = CG ÷ 2

  • Step 3: The Capital Gains Tax (T) is then calculated by applying the Tax Rate (R) to the Taxable Capital Gains:

T = R x (SV – AV) ÷ 2

GC-ICON-79Main home exemptions for Portuguese residents

According to a 2024 report by PWC Portugal, if you reinvest the proceeds from a property sale into another main home in Portugal or anywhere in the European Union or European Economic Area (EU/EEA) that has a tax treaty with Portugal, then you will not have to pay tax on capital gains. Note that the property has to be your primary residence. 

To qualify, you will need to reinvest in the property market within 36 months after the sale of your property market or 24 months before the sale. 

Note that this tax exemption no longer applies to UK properties. This means that British expats who want to sell their Portuguese property to return to reinvest this money in the UK no longer benefit.

An additional capital gains relief for the benefit of retirees who are Portuguese residents also exists, according to the Portuguese Chamber of Commerce in the UK. If you are retired or above the age of 65, then you are tax-exempt on capital gains arising if you reinvest the proceeds from the primary home in a pension income fund or eligible insurance contract within six months after the sale.

How to Calculate Capital Gains Tax for Non-Portuguese Residents

Capital Gains Tax in Portugal is charged on the sale of property or other assets. For both residents and non-residents, the tax on capital gains is levied on 50 percent of the total capital gain. This taxable amount is then added to their yearly income and is subject to the progressive tax rates, which for 2025 can range from 12.50 percent to 48 percent.

If you are a resident in a European Union country, you can choose to be taxed as a Portuguese resident, but you will need to declare your worldwide income to determine the correct tax rate.

GC-ICON-62Capital gains tax for corporate real estate

If you own a property in Portugal through a non-resident corporate structure (i.e., a company, business, or trust), then the capital gains from the transfer of shares attract a 25 percent corporation tax rate if the real estate comprises 50 percent or more of the company’s value. If it is from a blacklisted jurisdiction, this rises to 35 percent.

This only applies where the double taxation treaty between Portugal and the company’s country of incorporation provides Portugal with taxation rights.

Capital Gains Tax Portugal: Deductions for Residents and Non-Residents in Portugal

There are instances where both residents and non-residents can apply for cost deductions from the Capital Gains Tax amount. These include:

  • The request for the energy certificate
  • The IMT
  • The commission paid to the real estate agency
  • Solicitor costs
  • The deeds
  • Charges for the appreciation of the property – for maintenance and conservation works, in order to increase the value of the property carried out in the previous 12 years and that are duly documented

How to Reduce Your Capital Gains Tax Exposure in Portugal

calculating Capital Gains Tax in PortugalWith a thorough plan, you may be able to significantly reduce your tax liability. Certain types of life insurance policies, for example, can provide significant tax benefits in Portugal. Discuss your options with an experienced wealth manager or tax advisor about the best option for your situation.

Scouting out an advisor with cross-border or international experience can help you find tax-efficient and compliant ways to manage your financial assets so that you do not need to pay more tax than is necessary, whether in Portugal or your resident country.

Apart from getting expert advice, the following strategies will also help reduce your tax burden:

  • Reinvesting the profit from the sale of your main residence into another qualifying primary residence
  • Holding tax-efficient or tax-free investment funds
  • Taking advantage of double tax treaties where applicable to you
  • Staying tax compliant and making the most of any available deductions, such as improvement costs and maintenance

Goldcrest: How We Can Help You

Goldcrest is a local buyer’s agent based in Lisbon that provides insightful real estate expertise and strategic advice. From sourcing to property acquisition, we offer a tailor-made service for our clients, assisting them in identifying outstanding investment opportunities in some of Portugal’s finest locations, from relocation to investment projects.

With us, we make the property purchase as simple and hassle-free as possible. Goldcrest will also ensure that the negotiation phase runs smoothly, providing you with an optimal purchase price.

If you are thinking of relocating to Portugal, investing in the property ladder here, or would simply like to discuss your options, please book a call with us today.

Frequently Asked Questions About Capital Gains Tax in Portugal: 

Portuguese residents and non-Portuguese residents are liable for Capital Gains Tax if they receive profit from the sale of their Portuguese property. However, there are some exemptions to capital gains tax in Portugal.

If you have a Portugal tax residency and are selling your residence in Portugal and intend to purchase another home in Portugal, then you could be tax exempt. Note that the home must be your primary place of residence.

The time period is important as you must purchase a new house and reinvest the total selling price 24 months prior to such as sale or 36 months after the sale. If this is the case, the owner needs to inform the Portuguese Tax Authorities that they intend to reinvest back into the property market in Portugal.

For any deductions on Capital Gains Tax, property improvement costs and maintenance should be declared, as this may be considered in the capital gains assessment when working out the capital gains. You should ensure you keep the invoices of any maintenance as proof of the costs incurred. 

No, Portugal is not a tax haven.

No, Portugal only has an additional property tax referred to as Adicional ao Imposto Municipal sobre Imóveis (AIMI).

AIMI tax applies to owners of shares in Portuguese real estate with a value of more than €600,001. Couples who own a home together are taxed jointly, which means if you and your partner jointly own a home in Portugal and the property is valued at more than €1.2 million, AIMI tax will apply.

AIMI is calculated as follows:

  • 0.7 percent tax on owning property valued between €600,001 and €1 million
  • 1 percent tax on property valued between €1mil and €2 million
  • 1.5 percent tax on property if its total value is above €2 million

The default capital gains tax in Portugal is 28 percent for gains from shares and other securities, but it is not a universal rule and does not apply to assets like real estate.

In Portugal, Capital Gains Tax (CGT) is levied on the profit from selling property or investments. For real estate, both residents and non-residents are taxed on 50 percent of the gain at progressive rates (12.50 to 48 percent). For investments like shares, the default rate is a flat 28 percent, but residents can opt for progressive rates.

No, Portugal is not tax-free for expats. The popular Non-Habitual Resident (NHR) tax regime, which offered significant tax benefits, ended for new applicants in 2024. New arrivals may qualify for a different, more targeted incentive for scientific and research professionals. All residents are subject to tax on their worldwide income at progressive rates.

How much tax a foreigner pays in Portugal depends on their residency status. Non-residents are taxed at a flat 25 percent on most Portuguese-sourced income. Tax residents, including foreigners, are taxed on their worldwide income at progressive rates, ranging from 12.50 to 48 percent for 2025. Special rates apply to capital gains and some other income types.

Portugal doesn’t impose an Inheritance Tax but rather applies a 10 percent ‘stamp duty’ when assets are passed on as a result of death or as a lifetime gift. Spouses, descendants (children, grandchildren), and ascendants (parents) are exempt from this tax.

The best way to determine if you owe capital gains tax (CGT) in Portugal is to calculate the difference between the sale price and the acquisition cost of your asset. If the resulting amount is positive, you’ve made a capital gain and may be liable for CGT.

It’s strongly recommended to consult a tax advisor or accountant familiar with Portuguese tax law, especially if you’re a non-resident. They can help ensure that deductions, exemptions (such as reinvestment relief), and reporting obligations are correctly applied.

The responsibility for paying capital gains tax lies with the seller of the asset. In Portugal, the seller must declare the sale in their annual income tax return, usually filed between April and June of the following year. Once the tax return is processed, the Portuguese tax authority will issue a tax assessment, and the taxpayer must pay any CGT due by the designated deadline.

Even if you’re a non-resident, you’re still required to report and pay CGT in Portugal on property or assets located in the country.