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Capital Gains

Capital Gains on Property Sale: Complete Guide

Complete guide to capital gains tax on the sale of a property in Portugal. Inflation coefficient, reinvestment relief and worked examples for 2026.

When you sell a property in Portugal at a profit, you may owe capital gains tax (mais-valias). This guide covers the rules for Portuguese tax residents selling property acquired from 1989 onwards.

Who does this apply to?

This guide covers:

  • Portuguese tax residents
  • Property acquired by purchase (not inheritance)
  • Acquisition from 1989 onwards
  • Single residential property (not mixed-use or demolition/reconstruction)

For non-residents, inheritances, or pre-1989 acquisitions, consult a certified accountant — different rules apply.

How is the gain calculated?

Taxable gain = Sale price − (Purchase price × inflation coefficient) − Improvements − Sale expenses

The inflation coefficient (published annually by Portaria) adjusts the purchase price for inflation. For example, a property bought in 2000 has a coefficient of approximately 1.48 for 2026.

Only 50% of the gain is taxable

For residents, only 50% of the net gain enters your IRS income and is taxed at your marginal rate (CIRS art. 43).

Worked example

Sale price: €400,000
Purchase price (2005): €150,000
Inflation coefficient (2005): 1.37
Improvements: €20,000
Sale expenses: €12,000
Marginal IRS rate: 37%

Adjusted purchase price = €150,000 × 1.37 = €205,500
Net gain = €400,000 − €205,500 − €20,000 − €12,000 = €162,500
Taxable amount = €162,500 × 50% = €81,250
Capital gains tax = €81,250 × 37% = €30,062.50

Use the capital gains calculator to calculate your specific case.

Reinvestment relief

If you reinvest the sale proceeds in another primary residence, you can defer or eliminate the capital gains tax:

  • Full reinvestment: tax is fully deferred
  • Partial reinvestment: tax is reduced proportionally

The reinvestment must take place within 36 months after the sale (or 24 months before it).

Out of scope

This calculator does not cover:

  • Non-residents (different withholding tax rules)
  • Properties acquired before 1989
  • Inheritances and gifts
  • Mixed-use or business properties
  • Demolition and reconstruction

Source: CIRS art. 10, 43, 44, 50. Inflation coefficients: Portaria No. 3/2025. Verified for 2026.