How much tax do I pay when selling a house in Portugal?
| Capital gain | €105,000 |
| Portion taxed by IRS (50%) | €52,500 |
| Effective rate on the gain | 19.6% |
Mainland Portugal: income tax is lower in the Azores and Madeira · Figures checked in October 2026 · See assumptions ↓
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How it was calculated
The capital gain is the sale price minus the purchase price adjusted for inflation, minus expenses. Only half is added to your income and taxed under IRS (income tax) at your rate.
There are exemptions and special rules (reinvestment, retirees). This is an estimate: check with an accountant before you decide.
The reinvestment exemption for a new home to live in only applies if the home you sold was your permanent home. Since 2026, gains on any home are also exempt if you reinvest in a home to rent out at up to €2,300 a month for at least 3 years. Homes bought before 1989 pay no capital gains tax.
The 2026 IRS rates may still be cut with effect from January (decree-law approved by the Government, awaiting publication). This page uses the rates currently in force.
Figures checked in October 2026 · Sources: Portal das Finanças
Estimate: An approximate result that depends on assumptions. Confirm important figures with the relevant authority.
Frequently asked questions
Do I pay IRS on the whole capital gain?
No. Only half of the gain is added to your income.
How can I avoid paying capital gains tax?
By reinvesting the amount in a home to live in, within the legal deadlines. Conditions apply; check with an accountant.