Selling Property in Portugal: The Capital-Gains Rules in 2026

The "flat 28% for foreigners" is a myth. A Portuguese property gain is category-G income, and only half of the net gain is taxed — now for residents and non-residents alike. On top of that, two rules can wipe out the tax entirely. Here is what actually governs a sale.

The rule that ends the "28%" myth

A gain on the onerous sale of real-property rights is a capital gain in category G (CIRS Article 10). The key point: the net gain balance is only taken into account at 50% of its value — and this now applies in the same way to residents and non-residents (CIRS Article 43(2)), following European case law that ended the old differential treatment. So the starting point is identical for everyone: half the gain enters taxation, and is then taxed under the general rules. (We keep the headline rate general here because the general-rate provisions are revised each year — confirm the current figures.)

The biggest saving: reinvesting your main home

If you sell your own permanent home and reinvest the realisation value into another permanent home, the gain can be excluded from tax entirely (CIRS Article 10(5)). The conditions are strict:

• The new home must be in Portugal, the EU or the EEA (with tax-information exchange);
• The reinvestment must fall within a window of 24 months before or 36 months after the sale (Article 10(5)(b));
• You must actually use the new property as your home within 12 months of the reinvestment, or the benefit is lost (Article 10(6)).

The hidden rule: property bought before 1989

Property acquired before 1 January 1989 — before the current Personal Income Tax Code took effect — sits outside capital-gains tax entirely. This comes from the transitional rule in Article 5 of the decree that approved the CIRS (Decree-Law 442-A/88): gains that were not caught by the old capital-gains tax only become subject to IRS if the acquisition happened after the Code came into force. If you inherited or bought a home decades ago, this can matter enormously.

The penalty rule: subsidised property sold early

There is a mirror image to the 50% rule. Where a property benefited from non-repayable public support above 30% of its tax value and is sold within 10 years, the gain is taken into account in full (100%), not half (CIRS Article 43(2)(a)). Subsidised housing is not a quick flip.

How to think about a sale

Start from "only half the gain is taxed, and residence status no longer changes that". Then ask whether the reinvestment exclusion (main home) or the pre-1989 rule applies — either can take the tax to zero. Keep every document: acquisition deeds, improvement invoices, and the dates that drive the reinvestment clock.

FAQ

Do non-residents pay a flat 28% on Portuguese property gains?

No. Since the law was aligned, only 50% of the net gain is taxed for residents and non-residents alike, then taxed under the general rules.

Can I avoid capital-gains tax by reinvesting?

Yes, on your own permanent home reinvested into another permanent home in Portugal, the EU or the EEA, within a 24-months-before / 36-months-after window, occupied within 12 months.

Is property bought before 1989 taxed on sale?

Generally no — property acquired before 1 January 1989 is outside capital-gains tax under the CIRS transitional rule.

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