Capital gains

The starting point is the adjusted purchase price. What you originally paid is multiplied by a currency devaluation coefficient, published each year by ministerial order, which restates an old price in today’s money. A property bought twenty years ago has a materially higher purchase price for tax purposes than the one written into its deed, and that works in the seller’s favour.

From that adjusted figure you deduct the costs you bore when buying — IMT, stamp duty and the deed — the improvement works carried out in the last 12 years and evidenced by invoice, and the costs you bear to complete the sale. What remains, set against the sale price, is the gross mais-valia (capital gain).

Half of that gain is then added to the household’s other income and taxed at the general IRS rates, which are progressive. This is why the simulator asks for annual income: it is the income that decides which bracket the gain lands in. The figure shown is the additional tax the gain causes, not the household’s total bill for the year.

Where a property was acquired before 1 January 1989, the date the IRS Code came into force, the gain falls outside the tax altogether and nothing is due. The simulator shows that result as soon as you enter the year.

An owner who sells their own permanent home and reinvests in another own permanent home can exclude the reinvested portion from tax. The window is 36 months after the sale, or 24 months before it where the new home was bought first.

The relief is proportional. What counts is not the price of the new home but the share of the sale proceeds actually reinvested, net of any mortgage settled on completion. Reinvest half and half the gain is excluded; reinvest all of it and the gain falls away entirely. The simulator applies that proportion, though the specific treatment deserves confirmation before being relied on.

Owners aged 65 or over, and those who have retired, have a parallel route: the reinvestment can go into an income insurance contract or a Portuguese retirement savings plan, each carrying subscription and withdrawal rules this simulator does not model in detail.

For sellers living abroad, one point matters above the rest. Until 2022 non-residents faced a flat 28% rate on the whole gain. That rate was repealed with effect from 2023, and non-residents are now taxed in the same way as residents: half the gain enters taxable income at the general progressive rates. For most sellers this is a meaningful improvement.

The remaining difference is that a non-resident must declare worldwide income for the purpose of determining the applicable rate, even though Portugal taxes only the Portuguese gain. If you have substantial income in another country, the estimate here will understate the real charge, because the simulator only knows the income you enter.

It does not account for tax credits, joint assessment of a married couple, specific reliefs, or losses from previous years that may be carried forward. It treats household income as a single figure and applies the general brackets to it.

It also does not capture ownership split between several people in unequal shares, or property received through inheritance, gift or the division of an estate, where the acquisition value is established by rules of its own.

The devaluation coefficients used are those from the most recent published order. The table covering 2026 sales is only issued at the end of the year, so the result will shift slightly once it appears.