Taxes for expats in Portugal

Cheryl Moderator

Member since 15 October 2018

CherylModerator21 May 2025 05:32:50

13517

Hello everyone,

When settling in and living in Portugal, you will also need to navigate the local tax system. In order to help newcomers and expats ease their tax-related experience, we would like to invite you to share your experience.

What are the taxes applicable to expats in Portugal?

Have there been any recent changes in tax regulations that expats should know about?

Are there any local tax incentives or agreements with your home country?

Have you come across any unexpected or unusual local tax?

What do you wish you had known earlier about taxes in Portugal?

Share your insights and experience.

Thank you for your contribution.

Cheryl
禁漫天堂 Team

Vidanova Active member

Member since 25 May 2018

VidanovaActive member30 May 2025 08:06:31

Many expats may buy a 2nd property to rent out as long term rentals or holiday rentals. If short term, to be legal, you will need an AL licence. But beware. Laws changed in 2024. As soon as you have an AL licence the tax authorities regard your property as a business and this changes the status for capital gains tax when you sell. If you sell the property whilst it is registered as an AL or within 3 years of removing the AL Licence you will be subject to 95% capital gains rather than the 50% rate. I will not go into deductions and how this 95% is actually taxed, I am just highlighting the fact that it is 95 not 50.

I don't know the situation about owning just 1 property and renting part of it as an AL, this you would have to discuss in detail with a tax accountant, but I suspect that you could be faced with 95% CGT on a m2 pro rata basis.

If you are faced with the first situation to avoid CGT all together, then remove the AL and let Finan莽as know this, use or rent the property long term for two years and register this property as your permanent home for at least the third year then when you sell you will not pay any CGT as long as you roll the total proceeds over into a new property within 36 months, in Europe, that will be your registered and permanent address for at least 12 months.

Get sound tax advice before you embark on owning a 2nd property or rent part of your own home.