Capital gains on selling a home: how much you pay and how to reduce the tax
PARCERIA ER · Vender casa · atualizado em 2026-11-02
When you sell a home for more than you paid, the gain, known as the capital gain (mais-valia), is taxed under IRS (income tax). The good news is that there are several legal ways to reduce or even eliminate the tax.
How it is calculated
Capital gain = sale price − (purchase price × currency devaluation coefficient) − deductible expenses.
Only 50% of the capital gain is taxed, and that amount is added to your other income for the year, at the IRS rate that applies to you. The coefficients are published every year by ministerial order (portaria) and increase the purchase value of properties bought more than 2 years ago.
Deductible expenses
- IMT, Stamp Duty, deed and registration fees paid on the purchase;
- improvement works carried out in the last 12 years, with invoices;
- the estate agent's commission and the energy certificate for the sale.
Keep all invoices for works, as they can be worth thousands of euros in tax.
When you may be exempt
- Reinvestment in a permanent own home: if you sell the home you live in and reinvest the sale proceeds (minus any mortgage you paid off) in another permanent own home between 24 months before and 36 months after the sale. The home sold must have been your permanent own home, and the intention to reinvest is declared in the IRS return for the year of the sale.
- New in 2026: reinvestment in homes to let. For sales between 2026 and 2029, there is an exemption if the proceeds are reinvested in housing let at a moderate rent (up to 2.300 €/month). It applies to the sale of residential properties. There are deadlines and conditions to meet.
- Retirees and people over 65: may invest the proceeds, within 6 months, in a PPR (retirement savings plan), insurance policy or pension fund that pays an annuity.
- Sale to the State or to local authorities: exempt, with some exceptions.
- Properties bought before 1989: capital gains are not taxed.
Note: the exemption for paying off the mortgage on your own home only applied to sales up to the end of 2024.
How to declare it
The sale is declared in Annex G (Anexo G) of the following year's IRS return (Annex G1 for properties bought before 1989). Before selling, it is worth running a simulation with an accountant.
