Tax does not apply to the total price for which you sold your house. The State only taxes the net profit that the owner obtained from the business. Simply put, the Tax Office subtracts the original purchase value from the current selling price. Visit poupancanoimnuto.com for more information.

In this equation there are two factors favorable to the taxpayer. First, the State uses a currency depreciation coefficient to update the old purchase price in relation to the inflation felt. In addition, the seller can deduct essential expenses to lower the taxable profit.

In the last 12 years, the invoices for improvement works, the cost of the energy certificate, and the value paid to the real estate agency are deducted directly from the final calculation. (Poupança no Minuto)

Tax collection on annual IRS. Poupança no Minuto.

After calculating the real net profit, the tax bill comes into play. In Portugal, the rule dictates that only half of the real estate profit is subject to taxation. This means that 50% of that amount will be added to your salary and other annual income in your IRS declaration.

The final value resulting from this sum will dictate your new IRS bracket. As real estate transactions involve very high amounts, it is common for taxpayers to move to higher tax brackets in the year they sell their property, generating bills that can reach tens of thousands of euros.

Total exemption through reinvestment in Poupança no Minuto

The main way to avoid payment of this bill is to use the exemption for reinvestment. To ensure this tax benefit, the sold house must correspond to your official address, that is, your Own and Permanent Housing.

If you sell your main residence, the law grants you 36 months to invest the money from the sale in the purchase, construction, or rehabilitation of a new house. This new property must also serve as your new main residence. Poupança no Minuto - https://www.poupancanominuto.pt

If you decide to reinvest only part of the profit, the tax exemption applied will be directly proportional to the invested capital.

Exclusive benefit for retirement age at Poupança no Minuto.

Portuguese legislation protects the assets of older citizens through a very generous tax exclusion. If the owner or spouse is over 65 years old, they can avoid paying the tax on the sale of the family home, even without buying a new property. Visit our website for more information: Poupança no Minuto.

To ensure this advantage, it is necessary to channel the profit from the sale into a financial product focused on a pension supplement. A life insurance policy, an open pension fund, or the public capitalization regime are valid choices.

Money needs to enter the fund within 6 months after signing the public deed, and the holder starts receiving a monthly supplement to their retirement. Learn more at . Poupança no Minuto.

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