The Portuguese Government has eliminated the 15% tax on Local Accommodation and reduced the residency period required for capital gains IRS exemption, making it easier to access this benefit.
This Thursday, the Government approved a decree-law that eliminates the extraordinary 15% contribution on Local Accommodation (AL), with retroactive effect from December 31, 2023. The repeal of this tax, which also removes the rule preventing a reduction in property tax (IMI) on properties used for AL, follows a legislative authorization from Parliament, finalizing the reversal of several measures from the previous government’s More Housing package. This decision provides relief for AL owners, exempting them from the contribution.
The decree also introduces significant changes to the capital gains exemption from the sale of properties. Until now, to qualify for the IRS exemption, property owners had to live in the property for at least two years. Under the new decree, this period is reduced to one year, and in cases of changes to the household, the time requirement is removed, allowing exemption after short periods of residence. Additionally, the restriction preventing capital gains exemption for those who had benefited from it in the past three years is also lifted.
Tax Department
Sofia Quental | Inês Grácio | Catarina Amaral
