Flash News NA 2025/10/16
Personal Income Tax and Real Estate Capital Gains: Are There Any Benefits for People with Disabilities in Portugal?
This article analyses the tax framework of real estate capital gains under Portuguese Personal Income Tax (IRS), the legal exemptions in force, and whether there is any specific treatment for taxpayers with a permanent disability equal to or greater than 60%.
1. General framework
Real estate capital gains correspond to the profit obtained from the sale of a property belonging to the taxpayer’s private assets. They are classified as Category G income for IRS purposes.
The capital gain is calculated using the following formula:
Capital gain = Sale value – (Acquisition value × adjustment coefficient + improvement expenses + acquisition and sale costs)
For properties held for more than 24 months, a depreciation coefficient may be applied.
According to Article 43(2)(b) of the CIRS, only 50% of the calculated capital gain is subject to taxation.
There is also a reinvestment regime applicable to main residences: if the property sold is the taxpayer’s main residence, and the proceeds are reinvested in the acquisition, construction, or improvement of another main residence, a total or partial exemption from taxation may be obtained, provided that all legal deadlines and conditions are met.
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2. People with disabilities and capital gains taxation
Taxpayers with a permanent disability equal to or greater than 60% benefit from a more favourable tax regime in some categories of income (namely A, B, and H).
However, Category G (capital gains) is not covered by any exclusion or specific reduction related to disability.
This means that, even in cases of recognised disability, capital gains must be calculated and taxed according to the general rules, without any automatic reduction of the taxable amount.
When the tax return is filed jointly (for example, between spouses), the special disability regime does not alter how capital gains are determined, and the general IRS rules continue to apply.
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3. Practical recommendations
• Accurately calculate the capital gain, keeping records of all acquisition, improvement, and sale expenses.
• Assess whether the reinvestment regime may apply, particularly in cases involving a main residence.
• Ensure that supporting documentation for expenses and reinvestment is well organised.
• Consult a qualified accountant to evaluate legal alternatives and tax optimisation strategies.
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Conclusion
Although the Portuguese tax system provides benefits for people with disabilities in certain income categories, there is no specific exemption for real estate capital gains (Category G). These gains must therefore be taxed under the general rules, with potential relief only available under the reinvestment and main residence exemption regimes.
A detailed analysis of each case is essential to ensure tax compliance and make the most of existing legal opportunities.
Nominaurea has a specialised team in accounting and tax consultancy ready to support individuals and businesses in managing their income efficiently, ensuring accuracy, compliance, and tax optimisation.
