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Property sale, CGT and PT residency (+NHR...?)

Property sale, CGT and PT residency (+NHR...?)

Old Jul 31st 2020, 7:38 pm
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Default Property sale, CGT and PT residency (+NHR...?)

Apologies if this has been mentioned but I'm unclear about the potential liability for CGT or other tax (and NHR possibilties) when selling property in another country and one's subsequent entry into the Portuguese system. The sequencing of selling property,and registering for residency has me confused.

When selling my apartment in Italy I won't be liable here for CGT
Could someone outline (or detail if you wish ) the way/timing of actions to avoid being subject to CGT or other property sale proceeds tax in PT? Is the timing of the sale relevant to when one registers for residency? What chronologies of actions positively and negatively affect the finances when one registers for residency?

Also, the NHR registration: can this be taken advantage of in any way in regards to the sale of a property and the transfer of funds to PT?


Thank you for any input
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Old Aug 4th 2020, 3:14 pm
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Default Re: Property sale, CGT and PT residency (+NHR...?)

If you registered on the nhr, there is no tax on CGT on fixed property sold in Italy - either before or after residence. If property is sold before becoming resident in Portugal, no need to declare it - not the Portuguese tax authority's business. After becoming a resident it needs to be declared and the amount may be taken into account in calculating taxes on non exempt income
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Old Aug 4th 2020, 5:10 pm
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Default Re: Property sale, CGT and PT residency (+NHR...?)

Originally Posted by TonyJ1 View Post
If you registered on the nhr, there is no tax on CGT on fixed property sold in Italy - either before or after residence. If property is sold before becoming resident in Portugal, no need to declare it - not the Portuguese tax authority's business. After becoming a resident it needs to be declared and the amount may be taken into account in calculating taxes on non exempt income
This is great, just what i was after. Thanks a lot. Just a follow-up : so with a non-resident NIF, one can register on NHR? Am thinking of renting in PT during selling period (but before the final exchange of deeds). By the time I register for residency in PT, after the 3 month stretch, the house sale will be behind me.

Last edited by campos; Aug 4th 2020 at 5:12 pm.
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Old Aug 4th 2020, 5:20 pm
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Default Re: Property sale, CGT and PT residency (+NHR...?)

Originally Posted by campos View Post
This is great, just what i was after. Thanks a lot. Just a follow-up : so with a non-resident NIF, one can register on NHR? Am thinking of renting in PT during selling period (but before the final exchange of deeds). By the time I register for residency in PT, after the 3 month stretch, the house sale will be behind me.
There is only one nif - you adjust the residence in accordance with the reality - if you live in Portugal you should change the address to a Portuguese address, if you live abroad, you should change it accordingly
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Old Aug 4th 2020, 5:37 pm
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Default Re: Property sale, CGT and PT residency (+NHR...?)

Originally Posted by TonyJ1 View Post
There is only one nif - you adjust the residence in accordance with the reality - if you live in Portugal you should change the address to a Portuguese address, if you live abroad, you should change it accordingly
Yes, sorry for muddying things. I got my non-residence NIF recently. (I will change this to 'resident' status when I find a place to rent and start living in PT)

I was wondering if one can register/apply for NHR as a non-resident - to take advantage of the CGT avoidance on my property sale in Italy, as you mentioned on your first reply. From your wording am I to understand it is possible...? I will apply for residence after the 3 months requirement living in the country(during which time I will close on my Italy prop sale)
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Old Aug 4th 2020, 7:38 pm
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Default Re: Property sale, CGT and PT residency (+NHR...?)

Originally Posted by campos View Post
This is great, just what i was after. Thanks a lot. Just a follow-up : so with a non-resident NIF, one can register on NHR? Am thinking of renting in PT during selling period (but before the final exchange of deeds). By the time I register for residency in PT, after the 3 month stretch, the house sale will be behind me.
You cannot register with a foreign address. Once you become tax resident, you may (should) request the nhr status. Remember that if you become tax resident this year, you must request this status on or before 31 March 2021 - no late applications accepted.
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Old Aug 5th 2020, 8:12 am
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Default Re: Property sale, CGT and PT residency (+NHR...?)

This is looking horrible for me. I'm very far from confident at this point of being able to change the address on my NIF - have to go to Braga, where the NIF was issued 28 years ago, but I'm not optimistic as they won't even make me an appointment online - and so won't be able to claim NHR status.

And my house sale is very unlikely to complete before I become resident in Portugal (hopefully mid September).
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Old Aug 5th 2020, 8:28 am
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Default Re: Property sale, CGT and PT residency (+NHR...?)

Originally Posted by suiko View Post
This is looking horrible for me. I'm very far from confident at this point of being able to change the address on my NIF - have to go to Braga, where the NIF was issued 28 years ago, but I'm not optimistic as they won't even make me an appointment online - and so won't be able to claim NHR status.

And my house sale is very unlikely to complete before I become resident in Portugal (hopefully mid September).
Address changes can be done at any tax office - there are some tax offices that are open and will attend to taxpayers - may have to queue etc. However, if your tax number was issued 28 years ago, if the address on the records is a Portuguese address, to obtain the nhr, it will require proof that you were non resident at least for the last 5 years. The address change can be back dated, but for this, you would need to present evidence.
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Old Aug 5th 2020, 8:46 am
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Default Re: Property sale, CGT and PT residency (+NHR...?)

Thanks, Tony. Yes, I know about this. I have already been to the Setúbal office with a wad of documentation of my residence in UK for the last 20 years, including a letter to that effect from HMRC. They were very helpful, but told me I'd have to go to Braga to deal with it, and they weren't optimistic!
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Old Aug 5th 2020, 9:04 am
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Default Re: Property sale, CGT and PT residency (+NHR...?)

Originally Posted by suiko View Post
Thanks, Tony. Yes, I know about this. I have already been to the Setúbal office with a wad of documentation of my residence in UK for the last 20 years, including a letter to that effect from HMRC. They were very helpful, but told me I'd have to go to Braga to deal with it, and they weren't optimistic!
What do you mean they were not optimistic - basically you need someone who knows what needs to be done to get this sorted out for you. If you have the proper proper paperwork, right forms completed, etc -it can be done.

It looks that the tax office in Setubal was just passing the buck. However you must understand that tax offices are there to extract money from the tax payer and not to resolve individual tax payers issues and provide advice etc . Sometimes they may (and often do) provide advice on how to sort out an issue, but that is not their function - they are an enforcement agency
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Old Aug 5th 2020, 9:20 am
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Default Re: Property sale, CGT and PT residency (+NHR...?)

As I understand it, once I'm resident in Portugal (hopefully September) it will be impossible to backdate it. So I'm planning a short trip to Braga at end of August to attempt to do this.
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Old Aug 5th 2020, 9:24 am
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Default Re: Property sale, CGT and PT residency (+NHR...?)

Originally Posted by suiko View Post
As I understand it, once I'm resident in Portugal (hopefully September) it will be impossible to backdate it. So I'm planning a short trip to Braga at end of August to attempt to do this.
You may or may not want to back date it - your are talking about tax strategies, etc - and without knowing the details and paperwork available, impossible to provide proper advice. In terms of going to Braga - unless you really want to, otherwise not necessary
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Old Aug 5th 2020, 9:27 am
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Default Re: Property sale, CGT and PT residency (+NHR...?)

Thanks again. As I understand it, NHR status will be beneficial to me in Portugal, hence the wish to at least have that avenue open to me!
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