Do I pay tax when I sell my home?
Conditional: by default there's tax, but there's an exemption if it was your main home and you reinvest. The basis is art. 10 of the IRS Code. For residents, only 50% of the gain is taxed, added to other income at progressive IRS rates — there's no flat 28% on home gains. There's full exemption if the home was your permanent main residence and you reinvest the realisation value (net of mortgage) in another main home — buy, build or rehabilitate — within 24 months before or 36 months after the sale. Partial reinvestment gives proportional exemption. Over-65s have the pension route (PPR/pension). In short: it depends on reinvestment.
📋 The rules
- Residents: only 50% of the gain is taxed
- Added to IRS at progressive rates (no flat 28%)
- Full exemption if you reinvest in your main home
- Window: 24 months before or 36 months after
- Partial reinvestment: proportional exemption
🔓 Exceptions
- Properties acquired before 1989: gain exempt
- Over-65s/retirees: reinvest in PPR/pension within 6 months
- Declaration mandatory (Anexo G) even when exempt
⚠️ Penalties & fines
There's no "fine" for selling — there's tax on the gain. The gain is the difference between the sale price and the acquisition value (inflation-adjusted), minus costs (IMT, stamp duty, deed, agency commission, documented works of the last 12 years). For residents, 50% of the gain goes into IRS at progressive rates (up to about 48% + surtax). Not declaring the gain leads to an additional assessment and interest. Beware a myth from Brazil: "Portugal taxes at a flat 15%" is false — the 15% (and the 180-day reinvestment exemption) are Brazilian tax; in Portugal it's 50% of the gain at progressive rates, with reinvestment within 24/36 months. To avoid the tax: reinvest in your main home within the window and declare in Anexo G.
📎 Official sources
❓ Frequently asked
Do I pay tax when I sell my home?
As a rule, yes, on the gain, but there are important exemptions. For residents, only 50% of the gain is taxed, added to other income at progressive IRS rates. There's no flat 28% rate on home-sale gains for residents, contrary to what's sometimes thought.
How do I avoid capital-gains tax?
If the home sold was your permanent main residence, you can be exempt by reinvesting the realisation value, net of the mortgage paid off, in another main home, whether buying, building or rehabilitating. The reinvestment must occur within 24 months before or 36 months after the sale.
How is the gain calculated?
The gain is the difference between the sale price and the acquisition value, the latter inflation-adjusted, minus eligible costs. Eligible costs include IMT, stamp duty, the deed, registration, the agency commission and documented works of the last 12 years, all with your NIF.
Do over-65s have an exemption?
Yes, they have their own route. People over 65 or retirees can be exempt by reinvesting the realisation value, within 6 months, in eligible retirement products, like a PPR, a pension fund or retirement certificates, that pay regular income for at least 10 years, with annual limits.
Is it true you pay 15% like in Brazil?
No. The 15% rate, with a 180-day reinvestment exemption, is Brazilian income tax, not Portugal's. In Portugal, for residents, 50% of the gain is taxed at progressive IRS rates, and the main-home reinvestment exemption has windows of 24 months before or 36 months after the sale.
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