Housing: Sale of real estate to the State with capital gains exempt from IRS

The measures of the Mais Habitação Program will cost around 900 million euros,

Photos: Elisabete Rodrigues | Sul Informação

The Government has determined that capital gains from the sale of residential properties to the State are exempt from IRS taxation, with the exception of those earned by residents in territories with a more favorable tax regime.

«IRS [Individual Income Tax] are exempt from taxation on capital gains arising from the sale to the State or local authorities of housing properties», according to the legislation of the “Mais Habitação” program, which was published on this Friday night.

This excludes capital gains received by residents who are tax resident in a country, territory or region with a «more favorable tax regime», the list of which must be approved by a Finance Ordinance.

The proposed legislation – which is in public consultation until March 10th and will be made official by the Council of Ministers on March 16th – will enter into force the day after its publication.

The “More Housing” Program foresees, among other measures, the provision of more land for housing construction, incentives for private construction or tax incentives for owners to place houses on the rental market.

Among the measures aimed at stimulating the rental market, as well as streamlining and encouraging construction, include the end of golden visas, the State replacing the tenant and paying rents with three months of default, the obligation to offer fixed rate by banks on home loans or the exemption of capital gains for families who sell houses to pay off their home loan.

The measures of the Mais Habitação Program will cost around 900 million euros, excluding in this estimate what may be the cost of rents, works to be carried out or purchases, but including the value of credit lines, and will resort to funds of the State Budget, as already indicated by the Minister of Finance.