CGT on sale of property
 

Any updates regarding the thorny issue of Capital gain tax in Portugal 2022.............see here
https://www.korepartners.com/insight...ts-in-portugal

Re: CGT on sale of property
 

Read the article. It discusses the discriminatory issue raised by the EU of resident vs non-resident treatment in Portugal of how much CGT to pay when selling a house. Unless I’ve missed something, it doesn’t offer however a conclusion that is now law in Portugal….ie it suggests it’s still a debate noting various options and consequently non residents have still to lodge a case in court to opt to pay less CGT in line with residents. Does anyone know if the Portugal law has indeed changed to be non discriminatory and the court route is thus not required.

Re: CGT on sale of property
 

Yes, the 2023 budget reflects a proposal passed by Parliament earlier this year to tax non-residents on the same basis as residents with regard to tax on capital gains from property sales.

Re: CGT on sale of property
 

Thanks. Also just read an article in the Portugal News (Nov 22) which confirms the end of the discrimination with the approval of the 2023 budget by Parliament. Good news for non residents selling this year. Do we know if it’s retrospective? ie like me that sold in Dec 21 and paid the full 28% tax in 2022?

Re: CGT on sale of property
 

About time... eg saving on an e80K gain (Mais Valais)
Old rule of 28%, tax would be e22,400
New rule 80K/2 = e40K taxable at 45% = e18,000 - deduction of 6K = e12,000...(45% is tax rate for income of between 36 and 80K)
so a saving of e10K
However I would assume that as the same rules would apply, you would also have to declare any other worldwide income to add to the Gain, which then increases the Tax payable, unless they are allowing Doublke Taxation to take effect.

Do we know if they will allow the more important part of the PT residents ability, which is to reinvest in another NON EU country, and only pay tax on the part not reinvested??

Re: CGT on sale of property
 

IN reply to my own last message.........on the last point....if reinvestment roll over outside of EU is allowed as a non resident, then if one was a resident of PT, with a property that was your main home, then by definition reinvestment would be allowed outside of the EU, for another main home, eg back in UK.....??

Re: CGT on sale of property
 

Not sure where you're getting the notion that there's any possibility of getting a concession on reinvestment in a main residence outside the EU.

The only reason the concession extends to the whole EU as opposed to just within Portugal is to comply with EU regs on free movement of capital. As soon as you take the capital out of the EU, the EU institutions have no interest any more and it becomes a matter between you and the relevant tax authorities.

Re: CGT on sale of property
 

Was that 28% on 100% of the gain or 28% on 50%?

Re: CGT on sale of property
 

The tax rule for non residents at the time was 28% of the full gain which is what I paid as opposed to 28% of 50% of the gain if I were a PT resident unless it was reinvested in PT/EU. The new law ends this discrimination but I haven’t seen it stated what exactly is the new calculation for non-residents and also I’m assuming for PT residents there is no change to the CGT calculation. If anyone has a recent extract I’d be grateful.

Re: CGT on sale of property
 

Actually, the rule for residents is that 50% of the gain is taxed at the appropriate scale rates, taking all other income into consideration (so it won't be fixed at 28% - and could well be a good deal higher. But yes, it is only on 50% of the gain).

Re: CGT on sale of property
 

And you have to add any gain to all other income, not only from pt but anywhere else, to get the total taxable amount, taxed at normal tax rates in PT.

Re: CGT on sale of property
 

Does this all apply if the property is not classed as a MAIN home?
Which of course it cant be if you are not a resident of PT? Or can it?

Re: CGT on sale of property
 

My wife and I are in a similar situation to Rooftile and I'd be interested to know whether this regularisation of the discriminatory treatment of non residents will be applied retrospectively and to third country residents?

Re: CGT on sale of property
 

If a NON PT resident when you sold, did you make HNRC aware of the sale of a hoilday home? You may find CGT in UK is higher than PT

Re: CGT on sale of property
 

No, it can't be your main home if you've not been residing here. You do get a window either side of the sale for the reinvestment in the case that it has been your main home, though.

And yes, it applies to the sale of all property, with the exemption available only in the case of eligible reinvestment of the sale proceeds.