Since 2023 non-residents are taxed like residents on property gains: half the gain at progressive rates, counted against worldwide income. What that means in practice and what is still unclear.
Portugal changed the way it taxes non-residents on property gains in 2023, and many online guides still describe the old rules. The short version: the flat 28% rate on the whole gain that used to apply to non-residents has been replaced by the same method used for residents, which can be better or worse depending on your other income.
How the gain is taxed
According to Portuguese accountants' guidance, a non-resident now includes 50% of the net gain in taxable income and is taxed at the progressive IRS rates. That is the same inclusion rule residents use. The catch is that non-residents must declare all their foreign income in the Portuguese return so the correct rate can be set for the included half. For someone with a high worldwide income, the effective rate can end up above what the old flat 28% would have produced, even with only half the gain counted. Non-residents also cannot use joint taxation or deductions from the tax due.
How the gain is calculated
The net gain is the sale price minus the acquisition value and allowed costs:
- the acquisition value is increased by a currency-devaluation coefficient from the official annual table, chosen by the year you bought, not the year you sold
- deductible costs include the IMT and stamp duty paid on purchase, deed and registration costs, solicitor fees, the energy certificate and the agent's commission on the sale
- works on the property in the last 12 years can be added if documented
- properties bought before 1989 are reported as fully exempt in one accounting source
Reinvestment relief
Residents can avoid tax by reinvesting the entire sale proceeds in a main home within 36 months after the sale, or within 24 months before it. For non-residents the position is uncertain and appears to have tightened: according to a press report, a 2026 binding ruling by the Tax Authority expressly excludes non-resident taxpayers from this relief, even when the property sold is in Portugal. Other sources describe it as available when reinvesting in the EU. Treat the relief as unavailable until a Portuguese tax adviser confirms it for your case.
Withholding and filing
The sources we reviewed describe the gain being declared in the IRS return for the year of the sale, on Modelo 3, filed the following year, with foreign income reported in the annex designed for it. They did not describe a buyer retention like Spain's, so ask your adviser whether any withholding applies to your sale. Confirm the filing window and the form, since the details are set each year.
Your home country
Whether your home country taxes the same gain, and how it credits Portuguese tax, depends on the treaty and on local law. Check before you sell.
Sale-day checklist
- collect the purchase deed, proof of IMT and stamp duty paid, and invoices for works
- identify the purchase year and the matching devaluation coefficient
- ask a Portuguese accountant to model the tax using your worldwide income
- ask whether reinvestment relief applies to you before relying on it
- plan the IRS filing for the following year and keep every document
- confirm the home-country treatment
FAQ
Is the old 28% flat rate still available to non-residents? No. It has been replaced by 50% inclusion at progressive rates. Can the new method cost more? Yes, if your worldwide income is high, because it sets the rate for the included half. Do I need to declare income from other countries? Yes, non-residents must report foreign income in the Portuguese return to determine the rate. Can I use the main-home reinvestment relief? Uncertain for non-residents, with a 2026 ruling reported to exclude them. Is there a buyer retention like in Spain? We found none described; confirm with your adviser.
How we help
We help sellers prepare the documents, connect you with a Portuguese accountant who can model the tax on your worldwide income, and tell you plainly what we find before you sign. This article is general information, not tax, legal or investment advice; rules, rulings and treaty positions change, so confirm every figure with a qualified tax adviser.