Capital gains when you sell: the tax bill to model before you list

Most sellers meet this tax after they have agreed a price. It deserves a place in the maths before you list.

General information, not tax advice. The rules below are the Portuguese rules for individuals selling property, checked against the tax code and the tax authority's rulings in October 2026. Your own position needs an adviser who can see your full picture.

First, kill the 28% story

The most repeated sentence about selling in Portugal is three years out of date. It says non-residents pay a flat 28% on the whole gain. That rule was revoked from 1 January 2023. Since then, a non-resident selling Portuguese property is computed the same way as a resident: only 50% of the gain counts, that half is added to the year's income, and the progressive income tax rates apply. The rate your half is taxed at is set by your worldwide income, which you declare for that purpose only. The tax authority confirmed exactly this in a 2026 ruling for a seller living in Brazil: 50% counts, the standard rate table applies, worldwide income sets the rate and nothing more.

EU and EEA residents still have an election to be taxed like residents on some other kinds of Portuguese income, but it no longer reaches property gains at all: since 2023, the resident style computation, the 50% and the progressive table, is compulsory for every non-resident seller, with nothing left to elect. The practical consequence is simpler than the folklore: there is no flat rate to model. There is a gain to compute, and a rate that depends on the rest of your income.

What counts as the gain

The tax is charged on the gain, not the price. Start with the sale value and subtract the acquisition value, adjusted for inflation, plus the allowable costs. Two traps sit inside those three words, value and value.

Step	How the calculation works
1. Sale value	The deed price, or the property's VPT at the date of sale if that is higher.
2. Adjusted purchase value	The value used for IMT when you bought, corrected for inflation if you owned the property for more than 24 months.
3. Deductible costs	Documented improvement works, the taxes and fees paid to buy, and the costs of selling.
4. Capital gain	Sale value, minus the adjusted purchase value and the deductible costs.
5. Taxable amount	50% of the capital gain.

Your sale value is the deed price, unless the property's tax value, its VPT, at the date of sale is higher, in which case the higher figure is the one the code uses, subject to a formal procedure for proving the real price was lower. Your acquisition value is not simply what you remember paying: it is the value on which your purchase tax, IMT, was assessed, which was the higher of the price and the VPT on the day you bought. Inherited property takes the value used for stamp duty at the transfer, broadly the VPT at the date of death. And property acquired before 1 January 1989 sits outside the charge altogether, though the sale is still declared.

Inflation does some of the work for you

If you owned the property for more than 24 months, the acquisition value is corrected by an official coefficient before anything is subtracted, so the tax office ignores the part of your gain that is only inflation. The table is republished every year. The one for sales in 2026 came out on 15 October 2026, and it is generous to long owners: a home bought in 2000 is multiplied by 1.71, one bought in 2010 by 1.31. A €100,000 purchase in 2000 becomes a €171,000 acquisition value in the 2026 calculation. €71,000 of apparent profit is never taxed at all.

The costs that reduce the gain, and the ones that do not

Against the gain you can set the costs of buying and selling, and the cost of works that genuinely increased the property's value, provided they were incurred in the last 12 years and you can prove them with proper invoices in your name. The buying side means the IMT and stamp duty you paid, and the notary and registration fees. The selling side means the agent's commission and the legal fees for the sale, and in practice the energy certificate you must have to sell. An extension, a new roof structure, a reconfigured floor plan: these are the works that count, if the faturas exist. Repainting, repairs and ordinary maintenance do not count, however expensive they were. Neither do mortgage interest, IMI, condominium charges or insurance. Those are the costs of owning, and the gain calculation ignores them.

This is why the article matters as much to buyers as to sellers. Your deductible costs are created on the day you buy and every time you renovate. The owner who files every invoice from day one sells with a smaller gain than the owner who paid cash and kept nothing, on exactly the same house.

Two worked examples, step by step

Both examples use round numbers and the official coefficient table for a sale in 2026. Read the assumptions before the result: with this tax, the assumptions are where the answer is decided.

Example 1: a non-resident selling in 2026

The seller bought in 2010 for €250,000, when the deed price was the higher value, and sells in 2026 for €500,000, again above the property's tax value. The improvement works were documented with invoices and carried out inside the last 12 years.

Step	Calculation	Amount
Sale price	Price in the 2026 deed	€500,000
Inflation-adjusted purchase price	€250,000 × 1.31	€327,500
Documented improvement works	Added to the purchase value	€20,000
Purchase taxes and fees	Added to the purchase value	€15,000
Agent's commission on the sale	Added as a selling cost	€25,000
Total deductions	€327,500 + €20,000 + €15,000 + €25,000	€387,500
Capital gain	€500,000 − €387,500	€112,500
Taxable amount	50% of €112,500	€56,250
Estimated tax	2026 rates, assuming no other income	About €16,646

That estimated tax is about 14.8% of the actual gain. Parliament approved slightly lower rates on 9 October; until the implementing decree is published, the table used here is the one in force.

Example 2: a Portuguese tax resident selling in 2026

This seller bought in 2015 for €300,000 and sells in 2026 for €600,000. The documented costs are larger, so the table separates them. Unlike the first example, there is no single tax figure at the end, because the taxable amount joins the seller's other income for the year.

Step	Calculation	Amount
Sale price	Price in the 2026 deed	€600,000
Inflation-adjusted purchase price	€300,000 × 1.23	€369,000
Documented improvement works	Added to the purchase value	€30,000
Purchase taxes and fees	Added to the purchase value	€18,000
Agent's commission on the sale	Added as a selling cost	€30,000
Total deductions	€369,000 + €30,000 + €18,000 + €30,000	€447,000
Capital gain	€600,000 − €447,000	€153,000
Taxable amount	50% of €153,000	€76,500

The €76,500 is then added to that year's salary, pension or rent and taxed at whatever rate the total produces. Change one assumption and the answer moves. A seller with a large worldwide income is pushed up the rate table, towards 48% at the top. The solidarity surcharge is a separate step, measured on the Portuguese taxable income rather than the worldwide figure: it adds 2.5% to the slice between €80,000 and €250,000, and 5% above that. Anyone who quotes you a single rate for your sale, without asking about your other income, is guessing.

If it was your home, the reinvestment exclusion

Sell your own permanent home and the code offers an exclusion, not a discount. The gain escapes tax if the proceeds, after repaying any loan taken out to buy the home you sold, are reinvested in another main home: a purchase, building land and construction, or extending or improving another home, in Portugal or in an EU or EEA state with tax information exchange. The reinvestment can happen from 24 months before the sale to 36 months after it. The home you sold must genuinely have been your home, proved by your fiscal address being there for the 12 months before the sale, and you must declare the intention to reinvest, and the amount, in the tax return for the year of sale. Reinvest part and the exclusion applies in proportion. Borrow to buy the new home and the borrowed part does not count as reinvestment. The new home must actually become your home, within 12 months of the reinvestment, or the benefit unwinds.

Two honest warnings. A non-resident cannot normally use this exclusion for a Portuguese property, because a home here cannot be the fiscal permanent home of someone resident abroad. And the over 65s have a different door: sellers who are retired or 65 or over can put the proceeds, within six months, into a qualifying pension or insurance contract that pays a regular income for at least ten years, and take the exclusion that way instead.

New in 2026: reinvest into a rental instead

A decree law of May 2026 added a second exclusion, for sales between 1 January 2026 and the end of 2029, and it is wider than the first. The property you sell must be a dwelling, but it does not have to be your home: a second home or a rented flat qualifies. Land and commercial property do not. Reinvest the net proceeds in Portuguese property that you then let as a home at a moderate rent, capped at €2,300 a month, and the gain is excluded, on the same 24 months before to 36 months after timetable, with the intention declared in the return. The conditions have teeth. A qualifying lease must be signed within six months, the property must actually be let for at least 36 months inside the first five years, the rent must stay under the cap for five years, and you cannot sell or gift the property inside five years. Fail, and the gain is taxed in the year you fail, with compensatory interest.

Losses, filing and the calendar

If the calculation runs the other way, a property loss is also counted at 50%. It offsets other capital gains in the same year, and the unused half can be carried forward for five years against later gains of the same kind. It cannot shelter salary or rent.

The sale is declared in the annual IRS return, Modelo 3 with Anexo G, filed between 1 April and 30 June of the following year. Non-residents file too, including the worldwide income that sets their rate. Nothing is withheld from the price at the deed for this tax; the assessment arrives later, and in the normal timetable the bill is payable by 31 August. Sellers resident outside the EU and EEA need a fiscal representative in Portugal for their tax life here, and every seller should keep their Portal das Finanças notifications live: the assessment comes through the tax office's channels, and its deadlines run whether or not the letter was read.

The number that matters in a sale is the net, not the headline price. Model the gain before you set the asking price, and if you are buying, start the file of invoices the week you complete. When you are ready to plan a purchase with the exit already in view, build your buyer brief and we will do the arithmetic in the right order.

Sources

Autoridade Tributária, Informação Vinculativa, Processo 29065 (2026), the non-resident computation: 50% counted, mandatory aggregation, standard rates, worldwide income setting the rate.
Decreto-Lei n.º 97/2026, the 2026 housing tax package, including the reinvestment into moderate rent letting exclusion and the revised article 10 of the CIRS.
Autoridade Tributária, Informação Vinculativa, Processo 30709, how the rental reinvestment exclusion is applied.
Portaria n.º 457/2026/1, de 15 de outubro, the monetary correction coefficients for sales in 2026 (Diário da República).
Autoridade Tributária, CIRS artigo 68.º, the 2026 progressive rate table.
Ordem dos Contabilistas Certificados, worked guidance on property capital gains, deductible costs and the agent's commission.
Código do IRS, articles 10.º, 43.º to 51.º and 55.º: the gain, the 50% rule, values, costs, losses and reinvestment (consolidated text to 2024; the 2026 amendments are in the decree-law above).

Capital gains when you sell: the tax bill to model before you list.