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    GAINS RESULTING FROM THE SALE OF REAL ESTATE IN PORTUGAL

    KNOW WHAT YOU HAVE OR NOT TO PAY FOR THE MOST VALUABLE SALES OF YOUR HOME

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    GAINS RESULTING FROM THE SALE OF REAL ESTATE IN PORTUGAL

    KNOW WHAT YOU HAVE OR NOT TO PAY FOR THE MOST VALUABLE SALES OF YOUR HOME

    Capital gains arising from the sale of real estate may be exempt from payment or may be declared in IRS. Learn how to do it, using the mechanisms of the Law according to the situation in which it fits.

    When should the property be declared for sale?

    The sale of a property must be included in the IRS statement for the year in question, that is, the year in which the sale was made, and present the following year in the definition period for the delivery of the IRS.

    Are real estate assets subject to any special tax?

    Accordingly, the taxation of real estate surpluses in each year is the result between the plus and minus.

    For example, if you sell two real estate units in one year and do not find a capital gain and the other capital gain, what is subject to IRS is the difference.

    Then it is worth noting that only 50% of the surplus value is subject to IRS.

    How do you calculate the surplus value?

    The capital gain is calculated on the basis of the following formula:

    Sales Value - (acquisition value restated by the currency devaluation coefficient + expenses)

    Is it possible to be exempt from declaring capital gains?

    Yes. In cases where the property was acquired before January 1, 1989 (date of entry into force of the IRS Code), it is not subject to IRS.

    And there may be no taxation if one opts for the reinvestment regime only for houses that are the main dwelling or permanent own dwelling, that dwelling where one has the fiscal domicile.

    How does the Reinvestment Scheme work?

    When the property is sold for own and permanent housing, the surplus value will not be subject to tax if:

    Amount of realization - Loan amortization = X

    When this amount is reinvested in the acquisition of another property / land for the construction of a building / construction / extension or improvement of another property with the same destination, ie permanent own dwelling, located in Portugal or in another EU / European Economic Area ( provided that tax information is exchanged);

    The reinvestment may have been made in the previous 24 months and the subsequent 36 months from the date of the realization;

    Or as long as the taxable person manifests the intention to reinvest, even partially, in the income statement of the year of sale.

    It must also take into account the need to assign the property to own and permanent housing within a period of 12 months or to be registered in the real estate matrix or changes, after 48 months from the date of realization, and must affect the property at housing for up to 5 years from the date of the realization.

    And can reinvestment be partial?

    Yes, it is necessary to calculate the proportion of surplus value that is not subject to IRS.

    What if the capital gains come from selling a vacation home?

    In this case, the reinvestment regime can not be applied and 50% of the surplus value is taxed.

    What if there is a loss?

    What is taxed, in each year, is the balance between the plus and minus. If, in one year, you sell two properties and in a capital appreciation and in the other capital loss, what is subject to IRS is the difference.

     Balance = losses - "Losses"

    If you only sell a property and a loss is found, it can be reported within 5 years.

    If you need any help to find the best property don't hesitate to contact us!  

    27/10/2017