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Capital gains tax when selling property in Portugal in 2026
When you sell a home in Portugal for more than it cost you, the gain is subject to Portuguese income tax (IRS). The purchase price is adjusted for inflation, and improvements from the last 12 years and buying and selling costs are deducted. Only 50% of the gain is taxed, at the progressive IRS rates, for residents and, since 2023, for non-residents too. Residents who sell their main home and reinvest in another one between 24 months before and 36 months after the sale can exclude the gain. Homes bought before 1 January 1989 are not taxed.
When you sell a home in Portugal for more than it cost you, the difference is a capital gain (mais-valia) and is subject to Portuguese income tax, IRS. It is not simply the sale price minus the purchase price: the law adjusts the purchase price for inflation and lets you deduct improvements and the costs of buying and selling. In most cases, only half of the result is taxed.
This guide covers the rules in force in October 2026, including Decree-Law 97/2026, which added a new reinvestment option in homes for rent. Portugal taxes gains on Portuguese property whether or not you live in Portugal.
Summary
| Situation | What happens |
|---|---|
| Tax resident in Portugal | 50% of the gain added to your other income, taxed at the normal IRS rates |
| Non-resident | 50% of the gain, taxed at the progressive IRS rates (since 2023) |
| Main home, with reinvestment | Gain excluded in proportion to the amount reinvested |
| Property bought before 1 January 1989 | Not taxed (except building land) |
| Sale to the State, autonomous regions or municipalities | Exempt, with exceptions |
| Reporting | Annex G of the IRS return, filed 1 April to 30 June of the following year |
How the gain is calculated
The formula:
Gain = sale value − (purchase value × coefficient) − improvements in the last 12 years − buying and selling costs
- Sale value. The price in the deed. If the property’s tax value used for the buyer’s IMT is higher, that value is used instead, unless you prove the real price was lower.
- Purchase value. The value used to calculate IMT when you bought: the deed price or the tax value, whichever was higher.
- Inflation coefficient. If more than 24 months passed between purchase and sale, the purchase value is multiplied by a coefficient set each year by ministerial order (portaria). The older the purchase, the higher the coefficient.
- Improvements. Works carried out in the last 12 years, backed by invoices. Routine maintenance may not be accepted as an improvement.
- Buying and selling costs. The tax authority accepts, among others, the purchase deed, land registry fees, IMT and stamp duty, the estate agent’s commission (provided the agent is named in the deed) and the energy certificate. The VAT on these costs counts too.
Keep every invoice: costs without proof are not accepted.
Coefficients for 2026
The coefficients for sales made in 2026 have not been published yet; they usually come out in November. The 2025 ones were set by Portaria 382/2025/1 of 11 November. As a reference, some values from that order:
| Year of purchase | Coefficient for 2025 sales |
|---|---|
| 2000 | 1.67 |
| 2005 | 1.40 |
| 2010 | 1.28 |
| 2012 to 2015 | 1.20 |
| 2018 to 2020 | 1.17 |
| 2022 | 1.06 |
| 2023 | 1.02 |
| 2024 | 1.00 |
For a 2026 sale, use the 2026 coefficients once they are published.
How much tax you pay
For tax residents, only 50% of the gain is taxed. That amount is added to your other income for the year (salary, pensions and so on) and taxed at the progressive IRS rates. In 2026 these range from 12.5% to 48%, plus a solidarity surcharge on the highest incomes. So the same gain costs more tax for someone with a higher income.
One exception: if the property received non-repayable public grants above 30% of its tax value and is sold within 10 years, 100% of the gain is taxed.
Losses on other property sold in the same year are offset against gains before the 50% is applied.
Non-residents
Until 2022, non-residents paid a flat 28% on the full gain. Following a ruling of the Court of Justice of the European Union, the 2023 State Budget removed the difference: from 1 January 2023, non-residents are also taxed on only 50% of the gain, at the progressive IRS rates. The 28% special rate for property gains was revoked.
In the return, non-residents also declare the income they earned outside Portugal, which can affect the rate applied. An accountant in Portugal can prepare and file the return for you.
Main home reinvestment relief requires that the home you sold was your tax address for the 12 months before the sale, so it usually does not apply if you already live abroad. Check how your country of residence treats the same gain, as a double tax treaty may apply.
Reinvesting in your main home
This is the best known way to avoid tax on the gain. The conditions, in article 10 of the IRS Code:
- The home you sold was your main home (habitação própria e permanente), or your household’s, shown by your tax address there for the 12 months before the sale (or before the reinvestment, if earlier). Marriage, divorce or a new child can justify exceptions.
- You reinvest the sale price, less any mortgage paid off, in buying, building, extending or improving another main home in Portugal, another EU country or the EEA (in that case, with tax information exchange).
- Within the deadline: from 24 months before to 36 months after the sale.
- You declare the intention to reinvest, with the amount, in the tax return for the year of sale.
- You move in: the new home must become your home, with your tax address there, within 12 months of the reinvestment. For a new build, the deadline is longer.
What counts is the sale price, not the profit. If you sell for 400,000 € and pay off 100,000 € of mortgage, you must reinvest 300,000 € to exclude the whole gain. If you reinvest less, the exclusion is proportional.
If a condition fails, for example you do not buy in time, the gain becomes taxable and your return is corrected.
Other exclusions
- Reinvesting in homes let at moderate rents. Created by Decree-Law 97/2026 for sales between 1 January 2026 and 31 December 2029, of a main home or of other homes. The money must be reinvested in housing in Portugal, within the same window of 24 months before to 36 months after the sale. The home must be let as a residence within 6 months, at a rent of up to 2,300 € a month, for at least 36 months in the first 5 years, and must not be sold in that period.
- Retired or aged 65 and over. If you sell your main home and you, or your spouse or partner, are retired or aged 65 or over, you can put the proceeds within six months into a life insurance contract, an open pension fund, the public capitalisation scheme or a PEPP. For insurance and funds, the money must be paid out in instalments over at least 10 years, up to 7.5% of the amount a year.
- Sale to the State. Gains from selling homes or building land to the State, the autonomous regions, public housing companies or municipalities are exempt. This does not apply to sellers with a tax address in a listed tax haven, or when the purchase is made through a pre-emption right. The exempt amount still counts towards the rate on your other income.
Property bought before 1989
Gains on property acquired before 1 January 1989, when the IRS Code came into force, are not taxed. The only exception is building land. The purchase date is all that matters, not how long ago it was or the sale price.
Inherited or gifted property
For an inherited home, the purchase value is the value used for stamp duty on the inheritance, or that would have been used if the duty were due (spouses, children and parents are exempt, but the rule still applies). For property, this is generally the tax value at the date of death.
The purchase date is the date of death, not the date the deceased bought the home. In a 2026 ruling, a home was bought before 1989 but the owner died in 1996: the heirs’ sale was taxable. If the death was before 1989, the sale is not taxed.
As the tax value is usually well below market value, the gain on an inherited home can be large. It is worth running the numbers before putting it on the market.
Worked example
A home bought in March 2015 and sold in 2026. We use the 2025 coefficient (1.20) only as a reference.
| Amount | |
|---|---|
| Sale value | 400,000 € |
| Purchase value | 200,000 € |
| Adjusted purchase value (× 1.20) | 240,000 € |
| Works in 2020, with invoices | 20,000 € |
| Buying costs (IMT, stamp duty, deed, registration) | 6,000 € |
| Selling costs (commission with VAT, energy certificate) | 24,850 € |
| Gain | 109,150 € |
| Amount added to taxable income (50%) | 54,575 € |
No reinvestment, resident or non-resident: 54,575 € is taxed at the progressive IRS rates, together with the rest of your income.
Main home, with 100,000 € of mortgage paid off on completion: the amount to reinvest is 300,000 €. Reinvest all of it and no tax is due. Reinvest 240,000 € (80%) and 80% of the gain is excluded: 21,830 € remains taxable, of which 50% (10,915 €) is added to your income.
How to report the sale
The sale goes on Annex G of the IRS return for the year of sale, filed between 1 April and 30 June of the following year. A sale in 2026 goes on the return filed in 2027. You enter the purchase and sale dates and values, the costs and, if relevant, the intention to reinvest and the amount. Reinvestments made in later years are reported in those years’ returns.
Keep the purchase deed, the property tax record (caderneta predial), invoices for works and costs, and the bank’s statement of the mortgage paid off. If you are buying again in Portugal, our guide to the cost of buying property covers the taxes on the purchase side.
How we help
When we sell your home, we help you gather the invoices and documents that reduce the gain, and plan the timing of the sale and your next purchase around the reinvestment deadlines. Find out more about selling with us. This guide is general information, not tax advice: for your own case, always confirm with a certified accountant (contabilista certificado).