Previously, in order to benefit from the IRS exemption on capital gains tax resulting from the sale of a property, the property had to have been kept as a permanent home/tax residence for at least 24 months prior to the sale and the sale proceeds had to be applied or invested in the acquisition of another property that would be the new permanent home/tax residence.

With the new rule, this period has been reduced to 12 months, offering greater flexibility, and encouraging mobility in the real estate market.

This measure comes in the context of a government strategy to boost the real estate sector, facilitating access to housing and promoting the renovation of the housing stock. The reduction in the exemption period is especially advantageous for those looking to sell their home quickly to reinvest in another property, without the concern of incurring in heavy taxation on capital gains.

Tax Department

Sofia Quental | Inês Grácio | Flávia Almeida | Catarina Amaral