Go Back  British Expats > Living & Moving Abroad > Europe > Portugal
Reload this Page >

CGT on sale of property

CGT on sale of property

Old Jan 1st 2023, 9:14 am
  #1  
BE Forum Addict
Thread Starter
 
Joined: Mar 2008
Posts: 1,683
wellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond repute
Default 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
wellinever is offline  
Old Jan 1st 2023, 4:00 pm
  #2  
Forum Regular
 
Joined: Feb 2021
Posts: 38
Rooftile is an unknown quantity at this point
Default 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.
Rooftile is offline  
Old Jan 1st 2023, 5:58 pm
  #3  
Polished expat
 
Red Eric's Avatar
 
Joined: Jul 2014
Location: Arcos de Valdevez "Onde Portugal se fez"
Posts: 16,803
Red Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond repute
Default 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.
Red Eric is offline  
Old Jan 2nd 2023, 9:17 am
  #4  
Forum Regular
 
Joined: Feb 2021
Posts: 38
Rooftile is an unknown quantity at this point
Default 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?
Rooftile is offline  
Old Jan 2nd 2023, 12:38 pm
  #5  
BE Forum Addict
Thread Starter
 
Joined: Mar 2008
Posts: 1,683
wellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond repute
Default Re: CGT on sale of property

Originally Posted by Red Eric
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.
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??
wellinever is offline  
Old Jan 2nd 2023, 12:48 pm
  #6  
BE Forum Addict
Thread Starter
 
Joined: Mar 2008
Posts: 1,683
wellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond repute
Default 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.....??
wellinever is offline  
Old Jan 2nd 2023, 1:14 pm
  #7  
Polished expat
 
Red Eric's Avatar
 
Joined: Jul 2014
Location: Arcos de Valdevez "Onde Portugal se fez"
Posts: 16,803
Red Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond repute
Default 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.
Red Eric is offline  
Old Jan 2nd 2023, 1:18 pm
  #8  
Polished expat
 
Red Eric's Avatar
 
Joined: Jul 2014
Location: Arcos de Valdevez "Onde Portugal se fez"
Posts: 16,803
Red Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond repute
Default Re: CGT on sale of property

Originally Posted by Rooftile
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?
Was that 28% on 100% of the gain or 28% on 50%?
Red Eric is offline  
Old Jan 2nd 2023, 1:36 pm
  #9  
Forum Regular
 
Joined: Feb 2021
Posts: 38
Rooftile is an unknown quantity at this point
Default 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.
Rooftile is offline  
Old Jan 2nd 2023, 2:00 pm
  #10  
Polished expat
 
Red Eric's Avatar
 
Joined: Jul 2014
Location: Arcos de Valdevez "Onde Portugal se fez"
Posts: 16,803
Red Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond repute
Default Re: CGT on sale of property

Originally Posted by Rooftile
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...[etc]
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).
Red Eric is offline  
Old Jan 2nd 2023, 2:32 pm
  #11  
BE Forum Addict
Thread Starter
 
Joined: Mar 2008
Posts: 1,683
wellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond repute
Default Re: CGT on sale of property

Originally Posted by Red Eric
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).
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.
wellinever is offline  
Old Jan 2nd 2023, 4:15 pm
  #12  
BE Forum Addict
Thread Starter
 
Joined: Mar 2008
Posts: 1,683
wellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond repute
Default 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?
wellinever is offline  
Old Jan 2nd 2023, 4:46 pm
  #13  
Forum Regular
 
Joined: Jun 2021
Location: North West England and Eastern Algarve
Posts: 124
ARCNET has a reputation beyond reputeARCNET has a reputation beyond reputeARCNET has a reputation beyond reputeARCNET has a reputation beyond reputeARCNET has a reputation beyond reputeARCNET has a reputation beyond reputeARCNET has a reputation beyond reputeARCNET has a reputation beyond reputeARCNET has a reputation beyond reputeARCNET has a reputation beyond reputeARCNET has a reputation beyond repute
Default 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?
ARCNET is offline  
Old Jan 2nd 2023, 5:19 pm
  #14  
BE Forum Addict
Thread Starter
 
Joined: Mar 2008
Posts: 1,683
wellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond reputewellinever has a reputation beyond repute
Default 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
wellinever is offline  
Old Jan 2nd 2023, 5:21 pm
  #15  
Polished expat
 
Red Eric's Avatar
 
Joined: Jul 2014
Location: Arcos de Valdevez "Onde Portugal se fez"
Posts: 16,803
Red Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond reputeRed Eric has a reputation beyond repute
Default Re: CGT on sale of property

Originally Posted by wellinever
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?
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.
Red Eric is offline  

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service -

Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.