Real Estate Capital Gains

Real estate capital gains (mais-valias imobiliárias) arise when a property is sold for more than its acquisition cost plus eligible expenses. For Portuguese tax residents, only 50% of the net gain is included in taxable income (the other 50% is exempt). The taxable 50% can then be either taxed at the 28% flat rate or aggregated with progressive brackets. If the sale proceeds are fully reinvested in another primary residence within 24 months (or 36 months if the replacement is purchased before the sale), the gain is fully exempt from IRS. Non-residents pay 28% on 100% of the gain (50% inclusion for EU/EEA residents if they elect aggregation). Acquisition costs are adjusted for inflation using official AT coefficients for older properties.