Capital gains tax when you sell Portuguese property as a non-resident (2026)

Is the 28% rate for non-residents still in force?

No. Until the end of 2022, a non-resident who sold a Portuguese home paid a flat 28% on the whole gain (article 72 of the IRS Code). Residents, by contrast, were taxed on only half the gain. After EU Court rulings found this discriminatory, the State Budget for 2023 (Lei 24-D/2022) changed the rules for sales from 1 January 2023:

	Sales up to 31 Dec 2022	Sales from 1 Jan 2023
Share of gain taxed	100%	50% (article 43 of the IRS Code)
Rate	Flat 28%	Progressive rates, 12.5% to 48% (article 68)
How the rate is set	Not relevant	By your worldwide income, including income taxed only abroad

Many websites and some agents still quote 28%. For property gains made by individuals, that figure is out of date.

How is the rate worked out for a non-resident?

Portugal only taxes the Portuguese gain, but it uses your total income to decide how high the rate is. In practice:

1. Take 50% of the gain.
2. Add your worldwide taxable income for the year (pensions, salary, rent, even if taxed only in your home country), which you declare on the return for this purpose.
3. Apply the 2026 progressive table to that total to get an average rate.
4. Apply that average rate to the 50% gain only.

A seller with little other income may pay an effective rate well under 10% of the gain. A seller with a large pension will pay more, but still usually less than the old 28%.

What are the 2026 income tax brackets?

These apply to income earned in 2026, so to sales completed between 1 January and 31 December 2026 (State Budget 2026, Lei 73-A/2025).

Taxable income (€)	Rate	Amount deducted (€)
up to 8,342	12.5%	0
8,342 to 12,587	15.7%	266.94
12,587 to 17,838	21.2%	959.26
17,838 to 23,089	24.1%	1,476.45
23,089 to 29,397	31.1%	3,092.77
29,397 to 43,090	34.9%	4,209.94
43,090 to 46,566	43.1%	7,743.27
46,566 to 86,634	44.6%	8,441.48
above 86,634	48%	11,387.17

Tax on the total = total × rate for its bracket − amount deducted. A solidarity surcharge of 2.5% applies to taxable income between €80,000 and €250,000, and 5% above €250,000.

In September 2026 the Government approved a proposal to cut the rates of the first six brackets for 2026 income. It is not yet law. If it passes, the figures above will fall slightly.

How is the gain calculated?

The gain is not simply sale price minus purchase price (articles 10, 44, 50 and 51 of the IRS Code):

Item	What counts
Sale value	The price in the deed (escritura). If the value used to charge the buyer’s IMT is higher (normally the tax registration value, VPT), that higher value is used (article 44)
− Acquisition value × coefficient	Your purchase price, multiplied by the inflation coefficient for the year of purchase, only if more than 24 months passed between purchase and sale
− Improvement works	Documented works that added value (encargos com a valorização), carried out in the last 12 years; keep invoices, ideally issued to your tax number (NIF)
− Acquisition expenses	IMT (transfer tax) and stamp duty paid when you bought, notary and land registry fees
− Sale expenses	Estate agent commission including 23% VAT, energy certificate, other necessary costs of the sale
= Gain	Of which 50% is taxed

Only spending that increased the property’s value counts, so routine maintenance and furniture should be left out. Keep the paperwork: the tax office can ask for proof after the return is filed.

Inflation coefficients

The coefficients for sales in 2026 are usually published around November 2026. Until then, the 2025 table (Portaria 382/2025/1) is a sensible guide:

Year bought	Coefficient	Year bought	Coefficient
2000	1.67	2016	1.19
2005	1.40	2017	1.18
2008	1.28	2018–2020	1.17
2010	1.28	2021	1.16
2011	1.24	2022	1.06
2012–2015	1.20	2023	1.02
		2024	1.00

Worked example 1: €300,000 villa bought in 2016, sold for €650,000

A non-resident bought in 2016, spent €40,000 on a new kitchen and bathrooms in 2021, and sells in 2026. Other worldwide income in 2026: €40,000. Purchase costs of €21,000 are an assumption for illustration.

Step	Calculation	€
Sale price		650,000
Acquisition value adjusted	300,000 × 1.19	−357,000
Purchase costs (IMT, stamp duty, deed)	assumed	−21,000
Works in 2021	invoiced	−40,000
Agent commission	650,000 × 5% × 1.23	−39,975
Energy certificate		−200
Gain		191,825
Taxable (50%)	191,825 × 50%	95,912.50
Plus worldwide income		40,000
Total for rate purposes		135,912.50
Tax on total	135,912.50 × 48% − 11,387.17	53,850.83
Average rate	53,850.83 ÷ 135,912.50	39.62%
Tax on the Portuguese gain	95,912.50 × 39.62%	38,002.15
Solidarity surcharge	(95,912.50 − 80,000) × 2.5%	397.81
Portuguese tax		≈ 38,400

That is about 20% of the €191,825 gain. Under the pre-2023 rule the same sale would have cost 28% × €191,825 = €53,711.

We have applied the solidarity surcharge to the part of the Portuguese taxable gain above €80,000 as a prudent assumption. How the surcharge interacts with foreign income for non-residents is not spelt out in guidance we could find, so check it with whoever prepares your return.

Worked example 2: a smaller Algarve flat

A flat bought in 2010 for €150,000, with €9,000 of purchase costs (assumed), sold in 2026 for €260,000 with a 5% + VAT agent fee and a €200 energy certificate. No works.

Step	Calculation	€
Sale price		260,000
Acquisition value adjusted	150,000 × 1.28	−192,000
Purchase costs	assumed	−9,000
Agent commission	260,000 × 5% × 1.23	−15,990
Energy certificate		−200
Gain		42,810
Taxable (50%)		21,405

How much tax depends on the seller’s other income:

Worldwide income	Total for rate	Average rate	Portuguese tax	% of gain
€0	21,405	17.20%	€3,682	8.6%
€25,000	46,405	26.41%	€5,654	13.2%
€60,000	81,405	34.23%	€7,327	17.1%

The old 28% rule would have charged €11,987 in every case. To run your own figures, use the selling calculator.

What if I bought before 1989?

Homes acquired before 1 January 1989, when the IRS Code came into force, are outside the scope of capital gains tax (article 5 of Decreto-Lei 442-A/88). The sale still has to be declared on the return (Annex G1), but no tax is due on the gain. Building land follows different rules. If the property was inherited, the relevant date is normally the date of death, not the date your parents bought it; see our guide to selling an inherited property.

Is tax withheld when I sell?

No. Portugal has no withholding on a seller’s gain at the deed, unlike Spain’s 3% retention. The buyer pays you the full price. Your tax is assessed later from your return, so set money aside.

When and how do I declare the sale?

The gain goes on the Portuguese income tax return (IRS, Modelo 3) for the year of sale, in Annex G, filed online on the Portal das Finanças between 1 April and 30 June of the following year. For a sale in 2026, that means April to June 2027. If the tax office issues the assessment by 31 July, payment is due by 31 August (article 97 of the IRS Code).

Sale completed	Return filed	Tax paid
Any date in 2026	1 April to 30 June 2027	By 31 August 2027
Any date in 2027	1 April to 30 June 2028	By 31 August 2028

You file even if you expect to pay nothing, for example because you are using a reinvestment relief.

Do I need a fiscal representative?

Owners resident in the EU or EEA do not. Owners resident elsewhere, including the UK and the US, can avoid appointing one by signing up to the Portal das Finanças electronic notifications service (article 19 of the General Tax Law, since 2023). If you do neither, official letters and deadlines can pass you by. Many sellers abroad also give a Portuguese lawyer or accountant access to file the return. The full process is in our guide to selling as a non-resident.

Can I avoid the tax by buying another home?

There are two reinvestment reliefs:

• Main-home relief (article 10(5) of the IRS Code). The gain is excluded if the home sold was your own and permanent home, shown by your tax domicile there for the 12 months before the sale, and you reinvest in another own and permanent home in Portugal or elsewhere in the EU/EEA between 24 months before and 36 months after the sale. Most non-residents selling a holiday home do not qualify. Someone who left Portugal recently might.
• Rent-reinvestment exemption (new, Decree-Law 97/2026). For sales from 2026 to 2029 of any home, the gain is excluded if the proceeds are reinvested in Portuguese homes let at a moderate rent of up to €2,300 a month. The law’s wording suggests non-residents can use it; the tax authority has not yet confirmed that. See the rent-reinvestment exemption explained.

How does my home country tax the same gain?

Portugal has first right to tax a gain on Portuguese land. Your country of residence may also tax it and then give credit for the Portuguese tax.

• UK residents pay UK capital gains tax at 18% or 24%, computed in sterling, with a credit for Portuguese tax under the UK–Portugal treaty. Because the UK has no inflation coefficient and uses exchange rates at each date, the UK gain can be much larger or smaller than the Portuguese one. See UK residents selling.
• Irish residents pay Irish CGT at 33% on most gains and can claim a credit for Portuguese tax, capped at the Irish tax on the same gain (Revenue).
• Other countries handle foreign property gains differently; some tax them with a credit, some exempt them under their treaty with Portugal. Check your own country’s rules before you agree a price.

In most cases you end up paying roughly the higher of the two countries’ taxes, not both in full.

Key points

• The flat 28% rate for non-residents’ property gains ended on 1 January 2023 (Lei 24-D/2022).
• Only 50% of the gain is taxed, at 12.5% to 48%, with the rate set by your worldwide income.
• The gain is sale price minus inflation-adjusted purchase price (if held more than 24 months), works from the last 12 years, and buying and selling costs.
• Nothing is withheld at sale; declare on Annex G between 1 April and 30 June of the next year and pay by 31 August.
• Homes bought before 1989 are outside the tax; reinvestment reliefs may remove it for others.
• Your home country may tax the gain too, usually with a credit for the Portuguese tax.