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Capital gains tax: deadline for amortisation extended

27 FEBRUAR 2024
Themen
Autoridade Tributária e Aduaneira Compra de Imóveis Comprar Casa em Portugal Comprar Casas Baratas Mais-Valias Crédito Habitação Mais Habitação Despesas Finanças
The Tax Authority has extended the deadline for reinvesting gains from property sales in loan repayments until March 2025.
Capital gains tax: deadline for amortisation extended
Source: Freepik
Author: Redaction

The three-month deadline for taxpayers to reinvest gains from the sale of property in the amortisation of the loan for the house they live in, without incurring taxation, may be extended until March 2025, according to the Tax Authority.

This opportunity for exemption from IRS taxation for profits from the sale of property, such as building plots or homes, is provided for in the Mais Habitação legislation.

To qualify for this exemption, the sale of the land or homes must take place between 1 January 2022 and 31 December 2024, and the proceeds of the sale must be reinvested in the total or partial repayment of the taxpayer's own permanent housing loan or that of one of their descendants, within three months of the date of sale.

In a communication to the services and in order to ensure the consistent application of the new rules established by Mais Habitação regarding the taxation of capital gains, the Tax and Customs Authority (AT) clarifies that "the amortisation of any loan taken out for the acquisition of the property and the application of the realisation value (possibly deducted from that loan) can, at the most, be carried out until March 2025".

This understanding stems from the fact that the loan must be amortised within three months of the sale, and the capital gains tax exclusion regime applies to sales made between the beginning of 2022 and the end of 2024.

In addition, the AT clarifies that the exclusion from capital gains taxation applies even when the taxpayer reinvests only part of the amount obtained from the sale in the amortisation of the loan, either because that is their intention or because the credit is less than the amount generated by the transaction. 

In such cases, the exclusion from taxation only applies to the proportional part of the profits corresponding to the amount reinvested.

This regime applies regardless of whether the sale of one or several plots of land or residences is involved, as the realisation value of a property sold (or several) can be distributed to amortise housing loans intended for the permanent residence of several eligible beneficiaries.

This means that, in a family where more than one person has a loan for their own permanent home, the money obtained from the sale of land and homes can be used to amortise several loans, as the scheme allows for the amortisation of "any housing loan intended for own permanent home".

The Tax Authority has previously clarified that, in cases where the sale of these types of property took place before Mais Habitação came into force (October 2023) and capital gains tax has already been paid, taxpayers can request a refund of the tax paid by submitting a replacement declaration for IRS Model 3

This request can be made within two years of the end of the legal deadline for submitting the tax return, or within the same deadline for submitting an administrative claim, as provided for in the IRS code, generally until the end of June 2025.

Themen
Autoridade Tributária e Aduaneira Compra de Imóveis Comprar Casa em Portugal Comprar Casas Baratas Mais-Valias Crédito Habitação Mais Habitação Despesas Finanças
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