Selling Property in Portugal in 2026 — A Practical Guide to Capital-Gains Tax (Mais-Valias), the 50% Rule, the Principal-Residence Reinvestment Exemption and the Anexo G Filing

Buying a home in Portugal is well-trodden ground. Selling one — and working out what you owe the tax office on the profit — is where many foreign owners come unstuck. The tax on that profit is the mais-valia (capital gain), and the rules changed in ways that matter for residents and non-residents alike. This guide explains how property capital-gains tax works in Portugal in 2026: how the gain is calculated, the 50-percent rule, the principal-residence reinvestment exemption, the relief for over-65s, and how to declare it all on the Anexo G.

This is general information, not personal tax advice. Property gains can be large and the reliefs are detail-sensitive, so for a specific sale it is worth confirming the numbers with a Portuguese accountant (contabilista certificado) or tax lawyer.

What is taxed, and what isn't

The taxable gain is, broadly, the difference between what you sold the property for and what you originally paid for it — adjusted for inflation and allowable costs (more on those below). It is reported under the capital-gains category of the personal income tax, the IRS.

One important exemption sits outside all the arithmetic: property acquired before 1 January 1989, the date the current IRS code took effect, is not subject to capital-gains tax at all. If you have owned a home since the 1980s, the gain is simply not taxable — though you must still declare the sale.

How the gain is calculated

The figure the tax office works from is not the raw difference between two prices. Several adjustments apply:

• Inflation uplift. If you have owned the property for more than 24 months, the original purchase price is increased by a monetary-devaluation coefficient (coeficiente de desvalorização monetária) published each year, which reflects accumulated inflation. The longer you have held the property, the more this lowers the taxable gain.
• Acquisition costs. The IMT property-transfer tax and stamp duty you paid when buying, plus notary and registration fees, are added to the acquisition value. (For a refresher on those purchase taxes, see our guide to property tax in Portugal.)
• Improvement costs. Documented spending on improvements to the property in the 12 years before the sale — backed by proper invoices showing your NIF — can be deducted, as can the cost of the energy certificate required to sell.
• Selling costs. The estate-agent commission, where formally invoiced, is deductible from the sale price.

Keeping the paperwork is everything here. An improvement you cannot evidence with a compliant invoice is, for tax purposes, an improvement that did not happen.

The 50-percent rule — now for everyone

For Portuguese tax residents, only 50 percent of the calculated gain is actually taxed. That taxable half is added to your other income for the year and taxed at your marginal IRS rate — so the effective bill depends on how much else you earned.

The headline change of recent years concerns non-residents. Until the 2023 State Budget, non-residents were taxed on 100 percent of the gain at a flat 28 percent rate, a regime the European courts had repeatedly found discriminatory. Since then, non-residents are placed on the same footing as residents: 50 percent of the gain is taxed, and it is aggregated (englobado) at the progressive IRS rates. Whether you live in Lisbon or London, the same half-the-gain principle now applies — though a non-resident's Portuguese-source income may still push the marginal rate higher than a resident might expect.

The big exemption: reinvesting in your own home

The most valuable relief applies to the sale of your habitação própria e permanente — your own permanent home. If you sell it and reinvest the proceeds in another permanent home, the gain can be fully or partly exempt. The conditions are specific:

• The property sold must have been your permanent home, and since 2024 it must have been so for at least the 12 months before the sale.
• You must reinvest the sale proceeds — net of any mortgage you repay on the sold property — into another permanent home for yourself, located in Portugal or elsewhere in the EU/EEA.
• The reinvestment must happen within 36 months after the sale or in the 24 months before it.
• You must declare your intention to reinvest on your IRS return. If you reinvest only part of the proceeds, the exemption is reduced proportionally.

This is the relief most expats selling a family home will reach for — but note it is unavailable to non-residents, who by definition cannot hold a Portuguese permanent home, and it does not apply to second homes, rentals or investment flats.

A separate route for over-65s and retirees

Owners aged 65 or over, or who are already retired, have an alternative. They can exempt the gain on a property sale by reinvesting the proceeds, within six months, into an eligible long-term retirement product — a pension fund, a certified retirement-savings plan (PPR) or a qualifying insurance contract that pays a regular income. The amount that can be sheltered this way is capped, and the rules on how the income must be drawn are strict, but for older owners downsizing or cashing out it is a genuine alternative to the home-reinvestment route.

New for 2026: reinvesting into the rental market

A fresh relief arrived this year as part of the government's housing package. Under Law 9-A/2026 of 6 March and Decree-Law 97/2026 of 20 May, capital gains on a property sale can be exempted if the proceeds are reinvested, within five years, into buying property destined for moderate-rent residential letting — with rents capped (broadly up to €2,300 a month). It is a targeted incentive aimed at coaxing capital into the long-term rental market rather than short-stay tourism, and it sits alongside, not instead of, the permanent-home exemption.

Declaring the sale: the Anexo G

Every property sale that produces a gain must be reported on your annual IRS return, in the year following the sale, using Anexo G (the capital-gains annex of the Modelo 3). Crucially, you must declare the sale even if it is exempt — reinvestment relief, the over-65 route and pre-1989 acquisitions are all claimed through the return, not by staying silent. Pre-1989 sales and certain exempt cases are reported on the simplified Anexo G1. For the mechanics of the return itself, see our guide to filing the IRS Modelo 3.

A worked sketch

Suppose a resident bought an apartment for €200,000 in 2014 (paying, say, €13,000 in IMT, stamp duty and fees) and sells it in 2026 for €320,000, paying a €12,000 agent commission. The acquisition value is uplifted by the inflation coefficient and the costs are added, shrinking the raw €120,000 difference. Of whatever gain remains, only 50 percent is taxed, and that half is added to the seller's other income at their marginal rate. Reinvest the proceeds into a new permanent home within the window, and that taxable half can disappear entirely. The gap between the naive "€120,000 profit" and the actual tax bill is, in other words, enormous — which is exactly why the calculation rewards good records.

Practical checklist

• Keep every invoice (with your NIF) for purchase costs and improvements — for at least the life of your ownership plus the years you might be queried.
• Commission the mandatory energy certificate before listing; its cost is deductible.
• If selling your permanent home, decide on reinvestment before you file, and flag your intention on the return.
• Non-residents: budget for tax on half the gain at progressive rates, and remember the home-reinvestment exemption is not open to you.
• Settle the conveyancing through Casa Pronta, and if a mortgage is involved on the next purchase, line up financing early via our crédito habitação guide.
• Confirm your status: whether you count as a resident or non-resident for the sale year shapes the whole calculation — see becoming a tax resident.

Property capital-gains tax in Portugal is far less punishing than the raw numbers suggest — the 50-percent rule, the inflation uplift and the reinvestment reliefs do a great deal of work. But every one of those advantages has to be claimed correctly on the Anexo G, and several rest on records you can only assemble while you still own the home. Plan the tax side of a sale long before the "for sale" sign goes up.