Capital Gains Tax Portugal: How Does It Work?

What is Capital Gains Tax (CGT)?

The Portuguese Capital Gains Tax (CGT) is a type of tax applied to property and capital investments. The CGT applies to worldwide assets for Portuguese residents, while non-residents are liable to CGT on Portuguese-sourced assets.

So, how much is Capital Gains Tax in Portugal? There is no single tax rate that applies to everyone. The CGT in Portugal is often a flat 28 percent. However, if you sell shares in a micro or small company that is not listed on the stock exchange, only 50 percent of the capital gains are taxable.

For Portuguese tax residents, the Portugal Capital Gains Tax on property is generous. Only 50 percent of the capital gain from the sale of real estate is taxable. This taxable portion is then added to other annual income and taxed at Portugal’s progressive IRS tax rates.

A similar 50 percent inclusion applies in many cases to non-residents who sell Portuguese real estate. This means a Portuguese non-resident can be taxed on half of their capital gain, depending on their tax exemptions, liabilities, and any DTT (Double Taxation Agreements).

In 2026, an additional solidarity rate ranging from 2.5 percent to 5 percent applies to taxpayers with taxable income exceeding €80,000 and €250,000, respectively.

Here are the Personal Income Tax Rates (IRS) in mainland Portugal for 2026.

Source: PWC Portugal

Tip: How much tax you owe depends on your residency status, how you own the asset, and whether the asset, or property, is your primary residence. CGT in Portugal from real estate and investments is viewed as personal income. Therefore, they are subject to Portuguese IRS (Imposto sobre o Rendimento das Pessoas Singulares). To find out more about Portugal’s progressive IRS tax rates, check our guide to taxes in Portugal.

When does Capital Gains Tax apply in Portugal?

Capital Gains Tax (CGT) is triggered in Portugal at the moment you make a profit from the sale or transfer of a qualifying asset acquired after 1988. The tax is calculated and paid in the subsequent tax filing period.

Here are a couple of factors that determine when you are liable for the tax:

• Trigger event: You trigger a CGT event the moment you sell or dispose of part, or all, of a capital asset (such as property, stocks, bonds, or investment funds). If you sell an asset at a loss, you can use it to offset other capital gains.
• Asset acquisition date: CGT only applies to the sale of assets (particularly real estate) that were acquired on or after 1 January 1989. Any real estate or investments purchased before 1 January 1989 are exempt from Portuguese CGT.
• Reporting obligation: The Portuguese tax year runs from 1 January to 31 December. You report the CGT event in the year you sold the asset. You must report your capital gains on your annual Personal Income Tax (IRS) return, which is typically filed between April and June of the following year.

Reporting CGT in Portugal is done through an IRS return known as Modelo 3, specifically using Annex G (or G1 in some instances). You will use the Portal das Finanças to fulfill most of your tax obligations, such as paying taxes, downloading documents, and submitting formal tax queries.

What assets are subject to Capital Gains Tax in Portugal?

Capital Gains Tax in Portugal (CGT Portugal) applies to profits you make from selling or transferring specific types of assets.

These include:

• Residential property (such as main homes, secondary homes, or rental properties)
• Commercial property (such as selling commercial real estate or land)
• Stocks and shares (such as gains from stock options and selling shares in certain companies)
• Corporate and government bonds
• Mutual funds and investment funds
• Derivatives and other complex financial instruments
• Cryptocurrency

If you want to learn more about how crypto taxes work, check our guide on Portugal for crypto traders.

What’s new from 2023 to 2026?

Since 1 January 2023, non-residents who sell property in Portugal follow the same tax rules as residents: only 50 percent of the profit is taxable, and the rate depends on your total global income.

In 2025, Portugal’s income tax brackets range from approximately 12.5 percent to 48 percent, and your real estate gains are taxed within these brackets after being combined with your other earnings.

In 2024, there were changes to the Personal Income Tax. Under the new PIT Code, gains or losses from selling traded securities or units in investment funds can qualify for partial tax relief.

According to PWC Portugal:

• You can exclude 10 percent of the gain if you held the asset for more than two years but less than five.
• You can exclude 20 percent of the gain if you held it for at least five years but under eight.
• You can exclude 30 percent of the gain if you kept the asset for eight years or longer.

Since 2023, capital gains from crypto assets have been taxed at 28 percent for short-term gains (those held for less than 365 days), while long-term gains are often exempt.

The Non-Habitual Resident (NHR) tax regime provided significant relief on capital gains for those who qualified. But that has changed since the regime ended in January 2024 and was replaced by the NHR 2.0.

Note: Properties bought before 1 January 1989 are still exempt from Capital Gains Tax (CGT Portugal).

How to calculate Capital Gains Tax (CGT) for Portuguese residents?

The Portugal capital gains tax for residents is calculated based on the type of asset you sell. You determine the net gain, apply a reduction, and calculate the final tax. Keep in mind that securities can be taxed either at a 28 percent flat rate or be included in aggregated income, and that only real estate capital gains follow the 50 percent inclusion rule.

Here is a step-by-step guide for calculating CGT for Portuguese residents.

Step 1: Calculate the net capital gain

You can use the following formula:

Net Gain = Selling Price – (Adjusted Acquisition Value + Deductible Costs)

Step 2: Apply the taxable reduction

Portugal offers significant relief for real estate sales, which you can calculate based on this formula:

Taxable Gain = Net Gain x 50 percent

Only 50 percent is subject to tax; the other half is exempt.

Step 3: Calculate the final tax due

The 50 percent taxable portion is part of your annual personal income, such as employment income, pension income, or rental income.

The total amount is then taxed according to the progressive Personal Income Tax (IRS) rates in Portugal, which vary from 12.5 percent to 48 percent. Individuals with the highest income also pay a solidarity surcharge.

Here is an example: As a resident selling real estate with a €150,000 gain and having €30,000 in other annual income, you would add only €75,000 (50 percent of the gain) to your taxable income, which would produce a total of €105,000. This amount is then taxed under Portugal’s progressive IRS tax rates.

Your CGT tax liability is determined by the marginal IRS rate applicable to your total aggregated income.

Main home exemptions for Portuguese residents

Portugal offers two exemptions for Portuguese residents who sell a property they used as their primary residence. You can benefit from reinvesting the proceeds in a new primary residence (the “rollover rule”), and/or, if you are a retiree, by reinvesting in your pension or long-term savings plan.

If you are reinvesting the proceeds into a new home, you may qualify for a full or partial exemption from Portuguese Capital Gains Tax by satisfying the following criteria:

• You can prove you’ve registered the property in your name.
• The new permanent residence is located in Portugal or in another country within the European Union or the European Economic Area that has a tax treaty with Portugal.
• You buy the new home within a specific time window. This window begins two years (24 months) before you sell your first home and ends three years (36 months) after that sale.
• You establish the new property as your permanent residence within the required legal timeframe.
• You reinvest the net sale proceeds and take into account any eligible costs or liabilities.

You may also qualify for relief from CGT in Portugal if you reinvest the proceeds into an eligible life assurance policy or pension fund, subject to specific legal requirements.

If you choose a pension fund instead, you must follow specific rules, including limits indicating that the annual payments you receive cannot generally exceed 7.5 percent of the fund’s total value.

Note: It is highly beneficial to consult with a financial tax advisor to understand your tax obligations better. They can help calculate the Capital Gains Tax rate in Portugal based on your specific circumstances.

How to calculate Capital Gains Tax for non-Portuguese residents?

Wondering how to calculate your Portugal CGT rate? You can use a Portugal Capital Gains Tax calculator and consult with a local tax advisor.

For non-residents, Portugal’s Capital Gains Tax (CGT) applies only to income from Portuguese-sourced assets, such as property located in Portugal.

When a non-resident sells Portuguese real estate, 50 percent of the capital gain is taxable, and that amount is taxed under Portugal’s progressive IRS income tax rates. However, non-residents are not taxed in Portugal on their worldwide income, only on income arising in Portugal.

In certain cases, the CGT in Portugal on shares and other financial assets is not taxed for non-residents, except in specific situations, such as investments linked to certain Portuguese real estate companies or other defined exceptions.

Capital Gains Tax for corporate real estate

The Capital Gains Tax (CGT) that occurs from the sale of real estate by a company in Portugal is not subject to a separate CGT in Portugal. Instead, they are included in the company’s overall taxable profit and are taxed under the Corporate Income Tax (IRC – Imposto sobre o Rendimento das Pessoas Coletivas) regime.

The capital gain is determined at the accounting level as part of the company’s financial result and forms part of its business income for tax purposes.

You can calculate the net gain with the following formula:

Sales Proceeds – (Acquisition Value – Accumulated Depreciation/Amortization)

The main difference between personal and corporate taxation is the inclusion rate. Exactly 100 percent of the net gain is included in the company’s taxable profit. But the gain itself can be partly deferred.

The taxable gain is then taxed at standard IRC rates, which are progressive based on the company’s total profit.

For corporate real estate, gains vary based on the location and the various state surcharges.

The table below covers the normal Corporate Income Tax (IRC) rates in Portugal:

Source: Official Portugal Government Website

Small and medium-sized enterprises (SMEs) that work in agricultural, commercial, or industrial sectors as their main business pay a reduced corporate income tax rate (IRC) of 17 percent on the first €25,000 of taxable profit. They pay the standard corporate tax rate on any remaining profit above that threshold.

Companies that do not have a registered office or permanent establishment in Portugal pay a 25 percent tax rate (IRC) on their income.

However, these companies pay a higher 35 percent rate on certain types of income, including:

• Winnings from lotteries, raffles, or prize draws
• Income paid into accounts held in the name of one or more holders but actually benefiting unknown third parties
• Income earned by companies based in countries or territories considered to have significantly more favorable tax regimes (low-tax jurisdictions)

Considering buying property in Portugal? Contact a local buyer’s agent or real estate agent to navigate the property landscape and maximize your investment returns. Agents can connect you with tax advisors, contractors, and real estate lawyers. With expert help, you can better understand the Capital Gains Tax on property.

Key Capital Gains Exemptions and Reliefs in Portugal

The key Capital Gains Tax (CGT) exemptions and reliefs in Portugal apply to:

• Primary residence investments (residents only). You can get a full or partial CGT exemption when you sell your main home in Portugal. To qualify, the net sale proceeds must be reinvested into a new primary residence in the EU or EEA. You must complete the process within 36 months after the sale or 24 months before the sale.
• Retirees or seniors. If the seller is over 65 years old or retired and reinvests the proceeds from their primary home into a pension fund or a long-term savings product within six months, they are eligible for a full CGT exemption.
• Pre-1989 properties. Properties obtained before 1 January 1989 are often exempt from Capital Gains Tax when sold.

Read more about property taxes in Portugal in our ultimate guide.

How to reduce your Capital Gains Tax exposure in Portugal?

With careful planning, expert advice, and correct documentation, you can minimize your tax burden. The capital gains arising from selling a primary residence can be fully or partially exempt from tax if the net proceeds are reinvested into a new primary residence in Portugal, the EU, or the EEA within a 36-month window.

Certain types of life insurance policies can offer significant tax benefits. For example, Unit-Linked Life Insurance (Seguros de Vida), is one of the most efficient tools for transferring wealth to beneficiaries in Portugal.

The documentation required to lower your taxable gain can include:

• Acquisition deed
• Sales deed/contract
• Proof of payment, such as IMT (Property Transfer Tax), Stamp Duty (Imposto de Selo), Notary or legal fees paid at the time of purchase
• Energy certificate

Note: You may need to provide additional documentation, such as invoices, to support eligible costs. These invoices must comply with the rules set by the Portuguese tax authority or Autoridade Tributária e Aduaneira (AT).

Liability for UK Capital Gains Tax

UK residents are often liable to Capital Gains Tax (CGT) on worldwide gains, including those from Portuguese assets.

Portuguese tax residents who own UK property may also be subject to UK CGT, as the UK taxes gains on UK-situated property regardless of residence. At the same time, those gains may also be taxable in Portugal under Portuguese tax rules.

For UK CGT purposes (for non-UK residents disposing of UK property):

• Gains on UK residential property have been within the UK CGT regime since 6 April 2015
• Gains on all UK property (including commercial property and land) have been within scope since 6 April 2019

Where the same gain is taxed in both countries, relief is often available under the UK–Portugal double tax treaty in the form of a foreign tax credit, which helps prevent double taxation.

However, this does not always mean you simply “pay the higher amount”, as the final outcome depends on the tax laws in each country and how they calculate taxable gains and apply reliefs.

Goldcrest: How We Can Help You 

Goldcrest is the first buyer’s agent in Portugal. We provide expert, impartial advice on real estate investments and how to buy property in Portugal. From scouting out the perfect property through to property acquisition, we have you covered throughout the process. 

Unlike traditional real estate agents in Portugal who represent the seller, we are dedicated exclusively to protecting the buyer’s interests. 

If you are looking to purchase property in Portugal, don’t hesitate to get in touch. Our team of skilled experts is available to solve all your real estate doubts, helping you with the property search and offering insightful expertise and strategic advice. 

Why choose Goldcrest?

• Local knowledge: With offices located across Portugal, our presence nationwide allows us to assist you personally across the country.
• Independent service: As an independent buying agent, we do not represent any development or project. Our service is entirely tailored toward each individual client, providing you with everything you need to secure the perfect property at the best possible price.
• Streamlined process: Our real estate agents speak English and Portuguese, and our service is completely focused on providing you with a hassle-free buying experience, saving you time. We can also help you buy property remotely.
• Experienced team: Our expert real estate team has a vast local knowledge of the Portuguese property market. We have cutting-edge technology and metasearch tools at your disposal to provide full market coverage, ensuring the best investment choices and negotiated prices.
• Network of partners: We have a close network of partners, including lawyers, property management services, builders, architects, designers, and landscape gardeners, again saving you time and hassle by providing you with trusted experts in their field of work.