Capital gains from the sale of non-residents will be taxed at 50% and no longer 100% as usual

Capital gains from the sale of non-residents will be taxed at 50% and no longer 100% as usual

This guidance will apply to pending legal proceedings until the law is amended.

The Tax and Customs Authority (AT) decided to tax the real estate capital gains of non-residents by 50% and not 100%, as provided for in the IRS Code. This will be the rule to follow in pending legal proceedings until the law is amended.

The guidance comes to mitigate the problems that have arisen between taxpayers and tA on the differences in taxation of real estate capital gains between residents and non-residents. A non-resident citizen who sells a property in Portugal currently has the capital gains taxed at 100% and an autonomous IRS rate of 28%, while residents have the capital gains taxed at 50% and the amount is included in the remaining income, to which the progressive tax rates are applied.

The Supreme Administrative Court held that this is a restriction on the movement of capital, prohibited by the Treaty on the Functioning of the EU [European Union], to which the Portuguese has been obliged.

Source: Tax Authority and Real Estate Life