How much tax do you pay when selling property in Portugal?

Selling property in Portugal can be profitable, but understanding how taxes apply is essential — especially since tax rules vary depending on whether you’re a resident or non-resident, and on the type of property you’re selling. In this guide, we cover the main taxes involved, key exemptions, and how tax treatment changes based on whether it’s your main home, a holiday house, or a commercial investment.

Capital gains tax (CGT) in Portugal

Capital gains tax is the primary tax applied when selling property. It’s calculated on the net profit: the selling price minus the original purchase cost, adjusted for inflation and deductibles like renovation costs and agency fees.

Tax rules for different types of property

1. Primary residence (casa própria e permanente)

If the property you’re selling was your main home, and:

• You’re a Portuguese tax resident, and
• You reinvest the proceeds into another main home in Portugal or within the EU/EEA,

Then you may benefit from a partial or full exemption from capital gains tax. This reinvestment must be made within 36 months after the sale or 24 months before the sale.

If you don’t reinvest the full amount, the exemption will be proportional to the amount reinvested.

2. Secondary home or holiday house

If you’re selling a second home (e.g., a holiday apartment or investment property), the reinvestment exemption does not apply.

• Portuguese residents are taxed on 50% of the gain, added to their annual income and taxed at progressive rates.
• Non-residents are taxed on 50% of the gain, typically at a flat 28% rate, or they may choose to be taxed under progressive rates (advantageous for EU/EEA citizens).

3. Tourist properties (empreendimento turístico)

If the property is part of a tourist development (such as a hotel-style apartment or serviced residence), it is considered commercial real estate.

• The sale of such properties may be treated differently for VAT and corporate income tax purposes.
• If owned by an individual, capital gains tax applies similarly to a secondary home.
• If owned by a company, the gain will fall under corporate income tax (IRC) instead, at a standard rate of 21% plus municipal surtaxes.

Always check the property’s classification at the land registry (Conservatória do Registo Predial), as tax authorities use this to define the applicable tax rules.

Tax treatment for residents vs non-residents

For residents

• 50% of capital gains are taxable
• Gains are added to your personal income
• You may qualify for reinvestment exemptions if it’s your main home

For non-residents

• 50% of capital gains are taxable
• Flat 28% tax, unless you opt into progressive rates (EU/EEA only)
• No exemption for reinvestment, unless you become a tax resident

Deductions to reduce capital gains tax

You’re allowed to deduct certain costs from your capital gains, such as:

• Real estate agent commissions
• Property registration and notary fees
• Certified renovation/improvement costs
• IMT (property transfer tax) and stamp duty paid when buying

Make sure you keep invoices and official receipts to claim these.

Other taxes when selling property

1. IMI (municipal property tax)

Even though it’s not directly tied to the sale, the IMI must be up to date before the property is sold. Rates usually range from 0.3% to 0.8% of the tax value.

2. AIMI (wealth tax)

If the total tax value (VPT) of your Portuguese real estate exceeds €600,000 per person, you may also owe AIMI. This is charged annually and affects high-value portfolios.

3. Stamp duty

Stamp duty (Imposto do Selo) is not applied on property sales — only on purchases.

Avoiding double taxation

If you’re a tax resident outside Portugal, you may be protected by double taxation treaties (DTTs) between Portugal and your home country. These agreements typically allow you to offset Portuguese taxes against taxes in your country of residence.

Consult an international tax advisor to determine how to declare and offset these gains properly.

Final thoughts

The tax impact when selling property in Portugal depends not only on your residency status, but also on whether the property is a primary residence, secondary home, or tourist/commercial property. Each category has its own tax rules, exemptions, and reinvestment options.

Before selling, consider:

• Consulting a Portuguese accountant or tax lawyer
• Checking your property’s classification
• Gathering all supporting invoices and documents
• Exploring reinvestment options (if selling your main home)

Proper planning can help you reduce your tax burden — and keep more of your profit.