Selling a house before emigrating: pay attention to capital gains

What are capital gains?

Capital gains correspond to the profit obtained between the sale value of a property and the acquisition value (adjusted for inflation and deductible expenses).

To calculate the amount subject to tax, the following are considered:

• Sale value or taxable book value (whichever is greater)

• Less: Updated acquisition value

• Less: expenses with works, deed, real estate commission, among others

Not all expenses are accepted by the Tax Authority. For example, routine maintenance works can be excluded.

Tax rules in 2025

Since 2023, and reinforced in 2025, non-resident taxpayers have been subject to the same taxation regime as residents. That is, 50% of the capital gains are included with the remaining income and subject to IRS, according to progressive rates.

Is it possible to avoid paying tax?

Yes, in some cases it is possible to totally or partially exempt capital gains, if you reinvest the sale value in a new and permanent home, even if it is in another country of the European Union.

To do this:

• The house sold must have been your household's own permanent home

• The new property must also be intended for own and permanent residence

• Reinvestment must be made within 36 months of the sale or up to 24 months prior

• You must declare to the IRS the intention to reinvest and prove the purchase within the deadline

Please note: if the property purchased is outside the EU, the exemption may not apply.

Special cases

• Properties acquired before 1989 may be exempt from taxation

• Taxpayers over 65 years old have a specific regime

• The double taxation convention between Portugal and the country where you emigrate may change the tax impact

Before selling a house and emigrating, it is essential to know the tax rules associated with capital gains. Good preparation can make the difference between paying tax or benefiting from exemption.

Sources: Idealista, Deco Proteste, Tax Authority

Note: This article is for informational purposes only and does not dispense with the consultation of a certified accountant.