Selling Property in Portugal as a Non-Resident

You do not need to become Portuguese resident simply because you want to sell property in Portugal.

A non-resident owner can sell Portuguese real estate, and the transaction can often be handled without travelling to Portugal if the seller appoints a representative under a power of attorney with the right powers.

The main additional work is cross-border coordination: authority to sign, Portuguese documents, banking, capital-gain records and the annual Portuguese tax return after the sale.

You can sell from abroad

If you cannot attend completion, a representative can act for you where the power of attorney is valid for the transaction and contains the necessary powers.

The document should be drafted around the actual sale, not as a generic permission letter.

Depending on the acts required, the representative can need authority to:

• sign the CPCV;
• sign the final transfer instrument;
• deal with mortgage discharge;
• make declarations connected with the property;
• coordinate registration;
• receive or direct sale proceeds where expressly intended.

If the power is signed outside Portugal, the signing, authentication, apostille or legalisation and translation route should be confirmed before the document is executed.

Read: Power of Attorney in Portugal

Prepare the Portuguese property file

Being abroad does not change the seller's underlying property obligations.

The file still needs the relevant ownership, tax, energy, condominium, mortgage and transaction documents.

Read: Selling Property in Portugal: Seller Legal Checklist

If the property has a mortgage, start with the bank early.

Read: Selling Property in Portugal With an Existing Mortgage

The old 28% flat-rate explanation is no longer the general rule

This is one of the most important points for non-resident individual sellers.

For Portuguese property gains earned from 1 January 2023, the old general model of taxing the full non-resident property gain at a standalone 28% rate no longer applies.

Under the current standard regime for an individual non-resident seller:

• the property gain is calculated under the ordinary Portuguese capital-gains rules;
• 50% of the standard property gain is taken into account;
• the Portuguese property gain is subject to mandatory aggregation;
• Portuguese progressive IRS rates apply;
• worldwide income is considered to determine the applicable rate.

Using worldwide income to determine the rate does not, by itself, turn that foreign income into a separate Portuguese taxable item. It is part of the rate calculation required for the aggregated Portuguese gain.

Special regimes and exceptions can change the result, so the transaction should be classified before a tax figure is quoted.

The gain is not just sale price minus purchase price

For an individual seller, the calculation can be affected by:

• the legally relevant acquisition value;
• the value declared or used when the property was acquired;
• monetary correction where the statutory conditions apply;
• documented improvement expenditure from the qualifying period;
• necessary and documented acquisition expenses;
• necessary and documented sale expenses;
• any statutory exclusion or relief that actually applies to the seller's facts.

Portuguese tax law currently allows qualifying property-improvement expenditure from the previous 12 years, together with necessary and effectively incurred acquisition and disposal expenses, to be added to the acquisition value for the capital-gain calculation.

Keep the invoices and transaction records before the sale is completed. Reconstructing them after the fact is harder.

When do you report the sale?

An individual seller reports the capital gain through the Portuguese annual IRS return for the year of sale.

The standard Modelo 3 filing period is 1 April to 30 June of the following year.

A non-resident who sells Portuguese property should therefore keep the completion documents, acquisition evidence, qualifying invoices and tax information after the money has been received.

The tax process is not finished simply because the property transfer is complete.

If the property was inherited

Inherited property has a different acquisition-value history.

For Portuguese IRS capital-gain purposes, property acquired gratuitously is generally assigned the value that was used, or would have been used, for Portuguese Stamp Duty purposes.

The inheritance must also be in a position where the person signing the sale actually has authority to dispose of the property.

Read: Selling Inherited Property in Portugal

Payment and bank coordination

Agree the completion payment instructions before signing.

If a Portuguese mortgage must be repaid, the bank's amount and cancellation mechanics should be built into the payment flow.

If the net proceeds are going to a foreign account, verify the receiving details and any bank compliance requirements in advance. Do not change high-value payment instructions on the basis of an unverified email.

Non-resident seller checklist

Before the CPCV, confirm:

• current ownership and registration;
• Portuguese NIF details;
• whether you will attend or use a representative;
• the final POA wording and foreign-signing route;
• property and condominium documents;
• mortgage discharge if relevant;
• acquisition-value evidence;
• improvement and transaction invoices;
• expected IRS treatment;
• the account and payment route for net sale proceeds.

How THE-Ö can help

We can structure the sale for an owner abroad, prepare or review the CPCV, coordinate the property and mortgage file, prepare the power of attorney, represent the seller where agreed and keep the legal completion steps aligned with the post-sale Portuguese tax file.

Selling Portuguese property while living abroad?

Send us the property details, country where you live, whether the property is mortgaged, how you acquired it and whether you expect to travel to Portugal for completion.

Related

• Legal Support for Selling Property in Portugal
• Selling Property in Portugal: Seller Legal Checklist
• Selling Property in Portugal With an Existing Mortgage
• Power of Attorney in Portugal