Portugal levies a capital gains tax to both property and capital investments. This applies to worldwide assets for Portugal residents, while non-residents are liable on assets located in Portugal. Your main home can benefit from rollover relief if you meet the conditions.
Like many countries, Portugal imposes a capital gains tax on the sale of assets. It only applies to gains made on real estate and investments; personal items are not taxable and inheritances are just subject to a very limited form of stamp duty.
Your exposure to Portuguese capital gains tax will depend on whether you are resident, how you own the asset and, with property, whether it is your main home.
Portugal capital gains tax on property
Residents in Portugal are liable to tax on gains made on worldwide property acquired from 1989 onwards.
Real estate gains are added to your other income for the year and taxed at the income tax scale rates, ranging from 13% to 48% in 2025.
The rules are quite generous for residents. Only 50% of the gain on the sale of property is liable to tax and you can receive inflation relief after two years of ownership. There are also exemptions available.
If you still have non-habitual residence (NHR) status, you may not have to pay Portuguese capital gains tax when selling property outside Portugal. This applies where the gain is taxable in the source country under the double tax treaty – as is the case with UK property. If you expect to dispose of foreign property in the next few years, doing so before your NHR 10-year term ends could save you tax.
Capital gains tax main home exemptions and reliefs for Portugal residents
Portugal offers two reliefs for those selling a property that was their main home. You can benefit if you reinvest the proceeds into a new main home (the ‘rollover rules’) and/or, if you are of retirement age, into a long-term savings plan or pension.
When you reinvest the proceeds from one main home into a new home, you will not attract Portuguese capital gains tax if you meet these conditions:
- The property is owned in your name and you can demonstrate that you have history in it.
- Your replacement home in Portugal, or anywhere in the EU/EEA that has a tax treaty with Portugal (you do not qualify if moving back to the UK).
- You complete the purchase within 36 months of the sale of your previous home (or 24 months before).
- You move into the new home within six months of the three-year deadline.
- The entire proceeds are reinvested (including estate agent fees, legal and other incidental costs).
An additional capital gains tax relief for main homes was introduced in 2019 that can particularly benefit retirees. If you are either retired or aged over 65, gains are exempt if you reinvest proceeds in an eligible insurance contract or pension fund within six months of sale.
You don’t need to reinvest the entire proceeds, and this relief is in addition to the main home rollover relief above. If you are downsizing, for example, you can benefit from both reliefs.
Life assurance policies – where you can hold a wide range of investment assets within its tax-efficient structure – are eligible for this relief. When it comes to pensions, it must provide a maximum annual payment of 7.5% of the funds value, so take advice first.
Portugal capital gains tax on investment capital
Residents selling worldwide shares, securities and bonds are taxed at a flat 28% rate. Any investments obtained before 1989 are exempt.
Assets deemed to be from a ‘tax haven’ (including Gibraltar and Guernsey) are taxed at 35%.
NHR holders are not exempt from Portuguese CGT on UK capital investments.
There is no capital gains tax on the disposal of gold and other precious metals, though this could be challenged if there are a series of transactions that suggest that the seller is actually trading. Crypto assets are not subject to capital gains tax provided you have owned them for more than one year. Short-term crypto capital gains are taxed at 28%.
Capital gains tax for non-Portugal residents
In the past, non-residents were subject to a flat 28% tax rate on the full gain made from the sale of a property, shares, securities or bonds in Portugal, with EU residents having the option of being taxed as a Portuguese resident instead.
Following legal cases that reached the Portuguese constitutional court and European Union Court of Justice, since January 2023 residents and non-residents benefit from the same tax treatment on the disposal of Portuguese real estate.
If you own Portuguese property through a non-resident corporate structure such as a company or trust, the gain on the transfer of shares may attract 25% corporation tax (35% if from a blacklisted jurisdiction). This applies where the double tax treaty between Portugal and the company’s country of incorporation gives Portugal taxation rights. With companies based in the UK or Luxembourg, for example, corporation tax is instead payable in those countries.
Liability for UK capital gains tax
Some gains from Portuguese assets are also taxable in the UK for UK residents.
Portuguese residents with UK property are subject to UK tax as well as tax in Portugal. For residential property, any gain made since April 2015 is liable to UK capital gains tax, whereas for UK commercial property or land it is the gain since April 2019.
Where tax is paid twice, the UK/Portugal double tax treaty ensures a credit can be given, although you will pay whichever amount is larger.
Reducing your capital gains tax exposure
With careful planning, it is possible to significantly reduce your tax liability. For example, certain types of life insurance policies can offer significant tax benefits in Portugal, so speak to a specialist wealth manager about which ones may help you and how.
With our cross-border tax and wealth expertise, Blevins Franks will help you find tax-efficient, compliant ways of managing your assets so that you do not pay more tax than you need to, in Portugal or the UK.
Contact Blevins Franks today.
