When considering selling a property in Portugal, it is crucial to understand the Taxes on the Sale of Property. This process involves assessing “capital gains” and “Municipal Property Tax (IMI)”. Let’s explore the nuances of these taxes and understand how they can affect your real estate transactions.
1# – Capital gains tax: Understand how to calculate it
When you make a profit on the sale of a property, the state imposes a 50% tax on that gain. The calculation involves several elements, including:
- Date of purchase and sale of the property;
- Acquisition and sale values;
- Associated expenses, such as construction costs, energy certificates and real estate commissions.
Calculation formula:
Capital Gains=Sale Value-(Acquisition Value×Monetary Update Coefficient)-Sale and Purchase Charges-Realization Charges.
Practical example:
- Sale price: 200.000€
- Acquisition value: 100.000€
- Monetary coefficient: 1.02
- Deductible Charges: 20.000€
- Capital gains: 78.000€
It is crucial to keep proof of charges to ensure that deductions are valid.
2# – Exemptions from Capital Gains Tax: Know the Cases
There are cases of exemption from capital gains tax:
- Acquisition before 1989, but the declaration is still required.
- Reinvestment of the sale price in a permanent home, up to 36 months after the sale or 24 months before.
- Taxpayer over 65 or retired at the time of sale, who invests the proceeds in specific financial products.
3# – IMI in Sales: Who is Responsible?
The Municipal Property Tax (IMI) is paid annually by property owners. In the event of a sale, the legal owner is responsible for the IMI until December 31st of the year in which the IMI was paid.
Information needed to calculate IMI:
- Taxable Patrimonial Value (VPT): An estimate of the real value of the property.
- IMI rate: Set annually by the municipality, consultable on the Finance Portal.
IMI Calculation Formula: IMI=VPT×IMI rate
- Temporary Exemption: For the first three years for houses with a VPT equal to or greater than €125,000 and an annual family income below €153,300.
- Permanent Exemption: For low-income households with a VPT equal to or less than 10 times the IAS.
Understanding taxes on the sale of real estate is essential to making informed decisions during the process of selling a property. Always consult qualified professionals for specific advice.
I’m a real estate consultant in the area of Foz do Douro and Lordelo, in the city of Porto. Specialist in mediation of quality residential properties, I work with a focus on rigor, proximity to the client and excellence in service.
Any questions or help you want, I’m at your disposal – Tel. 939 993 379.
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