Capital gains tax exemption obtained in the sale of real estate will apply to sales between the beginning of this year (2023) and the end of 2024. However, T’s and C’s apply!
Further information can be gained by visiting “More Housing” on the www.consultalex.gov.pt website, which is only available for public consultation until the 10th of March.
The programme includes a transitional rule providing that capital gains resulting from the sale of other properties held by a taxpayer who has taken out a loan to buy a house (to reside) benefit from IRS exemption, and this benefit is also applicable to the sale of property from other household members.
According to the government’s proposed law, this tax exemption applies “only to transmissions made between the 1st of January 2023 and the 31st of December 2024.”
The proposed diploma also states that in order to benefit from the exemption it is necessary that the property sold is not used as the permanent dwelling of the taxpayer concerned and that the value of the sale (deducted from any existing loans or mortgages) is applied in the amortization “of outstanding capital in credit to the dwelling intended for the own and permanent housing of the taxpayer or his descendants.”
In addition, it is also necessary (and the conditions are cumulative) that the amortization “be achieved within three months of the date of completion.”
If the value of the sale of this property exceeds the amount applied in the amortization of the credit of the house where the taxpayer resides, the surplus will be taxed according to IRS rules for capital gains.
The “More Housing” programme will return to the Council of Ministers on the 16th of March when the measures that do not need to be submitted to parliament and the Government bill will be sent to the Assembly of the Republic for approval.
Among the measures contemplated in this programme – whose value is estimated at 900 million euros – are rent support, rental incentives, the creation of an extraordinary contribution to local accommodation, and the suspension of new licenses for this activity.
Samantha Gannon
info at madeira-weekly.com
