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Thursday, March 23, 2023

Housing: Exemption from capital gains applies to properties sold by the end of 2024 – Economy

These are some of the conditions to benefit from that exemption, according to the law proposal for the “More Housing” program, which has been available since Friday night, on the website www.consultalex.gov.pt and which can be found at public consultation until March 10th.

The program includes a transitional rule that provides 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 live in) benefit from IRS exemption, this benefit also being applicable to the sale of real estate of other members of the household.

According to the Government’s bill, this tax exemption applies “only to transmissions made between January 1, 2023 and December 31, 2024”.

The proposed diploma also determines that for this exemption to apply, it is necessary that the property sold is not used as the taxpayer’s own and permanent home and that the sale value (deducted from any existing loan amortization) is applied in the amortization “of outstanding capital in housing loans intended for the taxpayer’s own permanent home or that of his descendants”.

In addition, it is also necessary (and the conditions are cumulative) that the amortization “be completed within a period of three months from the date of realization”.

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 in accordance with the IRS rules for capital gains.

The “More Housing” program will return to the Council of Ministers on March 16, the date on which the measures that do not need to be submitted to parliament and the draft law that the Government will send to the Assembly of the Republic will be approved.

Among the measures contemplated in this program – whose value is estimated at 900 million euros – are rent support, rental incentives, the creation of an extraordinary contribution in local accommodation and the suspension of new licenses for this activity.

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