wellinever

I believe as a resident you have 36 months after the date of sale to make a reinvestment.
1) Is that 36 mnths from the actual date of the deed?
2) If a property is sold in, say Jan 2022,(deed), when does AT need to be made aware of the sale by the seller? (I appreciate the Notary is responsible to give details of sale to AT)
In case above at what point would the AT need to be told the CG amount
On sale of property, do you have, to tell AT of your intentions of what you will be doing (reinvest or not), if so again with above date, when would that be?

TonyJ1

Reinvestment 36 months to the day

You would have to report the sale and the intention to reinvest in your 2022 tax return (to be submitted in 2023)

The tax authority will have access to the information, therefore your return should tally

wellinever

Thanks TJ,,,,,
1) So if sale done on say 10th Jan 2022, then why does that have to be mentioned in a tax return for 2022? (which is surely for income for 2021)?
Or is this simply for AT to set the date to start the 36 month time deadline? ( I thought that the notary was responsible for informing AT of any sale they preside over)
2) So given that one reinvested in say May 2022 (date of deed), does the net tax from the sale, have to be paid then or do you still have 36 months from date of original sale?

TonyJ1

Portuguese tax year runs from 1 January to 31 December, therefore if you sell on the 10th of January then it is reportable in the 2022 tax return which is due in 2023. Don't concern yourself with reporting to the tax authority besides your tax returns - everything else is someone else's responsibility and done automatically.

The reinvestment has to be done by 9th January 2025 (also the rule applies backwards for 24 months). For the reinvestment allowance to apply 100%, then the net amount of the proceeds have to be reinvested into another principal property. If less then 100% is reinvested then a proportional cut in the reinvestment allowance will apply

The reinvestment only applies if the property being sold was/is your main home - the tax address should agree to the property address

Dafty

On the same subject, supposing one was to sell up and simply leave the country with the takings from a property sale - what would be the consequences post Brexit ?

SgtTroy

Brexit is irrelevant.

If you do not invest in a permanent home in another EU country, you get taxed on the full amount of the capital gain.

There might be some subtlety depending on whether you receive the gain while still resident, or after no longer being resident.

wellinever

I think daffy is asking what happens if you just `do a runner` with the proceeds, and presumably dont say where you have gone!!!!

SgtTroy

​​​​​Not sure, but I think the agents/solicitors are withholding a percentage of the proceeds, which they transfer to AT exactly with a view of such scenarios

TonyJ1

Even if the poster did a runner, unless he had no banking account, no pension, etc and kept the proceeds under the bed, the AT will likely get him - lot's of agreements for assistance in collecting tax debts - and the AT do do use these agreements. Probably safe if he emigrated to NK or similar

wellinever

It is of course quite possible that one could suggest that the intention is to reinvest (as a resident of PT) but then before the 36 minths has elapsed, decide to stop residency at AT.
Dunno what would happen in that case, would they then insist that as non resident you would pay 28% on the whole game

TonyJ1

No this does not happen - they just use international agreements to achieve the same thing

TonyJ1

Off course - they have enforcement mechanisms

SgtTroy

​​​​​​The "revenue rule" is a bit of gray area and quite debatable.

It also depends on the sum involved, anything under €10,000 perhaps would hardly be worth pursuing.

https://en.m.wikipedia.org/wiki/Rule...ue_enforcement

SgtTroy

If you sell in 2021, you pay the CGT due with your 2021 declaracao.
If you buy anything within 36 months, you would be due a refund.

AT would not wait for you for 36 months to only then collect the tax due

TonyJ1

This is an old principle, however this is largely being superseded largely by agreement. I do have first hand knowledge of this and therefore forget the old general rule. The Portuguese tax authorities don't use this but stick to tax agreements, and effectively it is the local revenue authorities that do collect the debts through its own systems. This is the case in Europe - I have no knowledge of US etc - but if the Poster has, say, pensions due from the UK, it will be enforced through HMRC.