Capital Gains Tax in Portugal for Foreign Property Sellers (2026)

If you are a non-resident selling property in Portugal in 2026, you are taxed on half of your gain at progressive IRS rates, not on the full gain at a flat rate. This is a major change from the old system and it matters for anyone planning an exit.

Here is how the tax works now, what changed, and the deductions that reduce the bill.

The rule that changed in 2023

Until January 2023, non-residents selling Portuguese property paid a flat 28 percent on the entire capital gain. Residents, meanwhile, were taxed on only 50 percent of the gain at progressive rates. The European Court of Justice repeatedly found this split discriminatory under EU free-movement of capital principles, most notably in the Hollmann case.

Portugal closed the gap. Since 1 January 2023, non-residents receive the same 50 percent exclusion that residents get. The legal basis is Article 43(2) of the Código do IRS (the Personal Income Tax Code), which now applies the 50 percent inclusion to residents and non-residents alike.

How the tax is calculated in 2026

Three steps determine what you owe.

First, calculate the gain. That is the sale price minus the acquisition cost, where the acquisition cost is uplifted by an official inflation coefficient if you owned the property for more than 24 months. You then subtract eligible expenses.

Second, apply the 50 percent exclusion. Only half of the net gain enters the tax calculation.

Third, apply progressive IRS rates to that half. The 2026 brackets run from 13 percent at the bottom to 48 percent at the top. For a non-resident, Portugal looks at your worldwide income to decide which bracket applies to the Portuguese gain, even though that foreign income is not itself taxed in Portugal. In practice most sellers land at an effective rate on the full gain somewhere between roughly 6 and 24 percent, because only half the gain is taxed and the rate is graduated.

A worked example. You bought for 300,000 euros, sell for 450,000 euros, and have 20,000 euros of deductible costs. Your net gain is 130,000 euros. Half, 65,000 euros, is taxable. If your worldwide income places that slice around a 35 percent marginal rate, the tax is roughly 22,750 euros, which is about 17.5 percent of the real gain.

What you can deduct

Deductions lower the gain before the 50 percent split, so they are worth documenting carefully. You can deduct the costs of acquisition and sale, including IMT transfer tax and stamp duty paid when you bought, notary and registration fees, and estate agent commission on the sale. You can also deduct the cost of capital improvements made in the 12 years before the sale, provided you have invoices. Routine maintenance does not count. Keep every invoice with a valid Portuguese NIF on it, because the tax authority disallows undocumented expenses.

Reinvestment relief and who actually gets it

Portugal offers a roll-over relief that exempts a gain reinvested in a new main residence within the EU or EEA. The relief is designed for people whose sold property was their own permanent home and who are buying another permanent home. A non-resident selling an investment property or a holiday home generally does not qualify, because the property was not their primary residence. Do not assume the relief applies to you without confirming your specific situation with a Portuguese accountant.

Filing, timing, and the double-tax question

The gain is declared on your annual Portuguese IRS return (Modelo 3) for the year of the sale, filed the following spring. Non-residents typically need a Portuguese tax representative or to use the tax authority's electronic channels.

If you are also tax-resident somewhere else, your home country may tax the same gain. Portugal has an extensive treaty network, and most treaties give Portugal the primary right to tax gains on Portuguese real estate while your home country grants a credit for the Portuguese tax paid. The mechanics differ by treaty, so check the specific agreement between Portugal and your country of residence.

Before you sell

Reconstruct your cost base before you list. Pull together the original deed, the IMT and stamp duty receipts, and every renovation invoice with a Portuguese NIF. A gap in your paperwork is a gap in your deductions.

If your sale involves a property bought off-plan or recently from a developer, confirm the title is clean and fully registered in your name before marketing it, because a registration defect can delay or sink a sale. Bektu (https://bektu.com) is useful here for checking a developer's delivery and handover record, which is the kind of history that surfaces title problems early.

The 2023 reform made selling Portuguese property meaningfully cheaper for non-residents. The system rewards good record-keeping, so the sellers who pay the least are the ones who kept their invoices.