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Calculadora Capital

Capital Gains Exemption Over 65

From 65, or once retired, you do not need to buy another house: you can apply the sale proceeds into a retirement product and pay no IRS on the gain.

The capital gain is the figure already computed in the property capital gains calculator: bring that result here.

The mortgage repaid is the outstanding capital settled at the sale. The field for reinvestment in another home is for people combining this regime with buying a new one.

IRS payable under the regime
€5,011.36
IRS saved
€10,738.64

To exclude the whole gain you would have to apply a further €70,000.00 into an eligible product, within the 6 months following the sale.

How the tax is reached

Amount to apply (sale − mortgage − reinvested in another home)€220,000.00
Application counted€150,000.00
Proportion applied68.2%
Gain excluded€61,363.64
Gain still taxable€28,636.36
Taxable part (50% of the remaining gain)€14,318.18
IRS under the regime (35%)€5,011.36
IRS without the regime€15,750.00
IRS saved€10,738.64

What the product may pay you

Maximum annual payment (7.5% of the amount applied)
€11,250.00
Monthly equivalent
€937.50

Subparagraph (d) of paragraph 10 requires a regular payment for at least 10 years, subject to this annual ceiling. Over the minimum period that returns €112,500.00 to you, which is 75% of what you applied: at the maximum annuity the capital only comes back in full after 13.3 years. Drawing above the ceiling in any year, or interrupting the payments, withdraws the benefit.

The product must be acquired within the 6 months following the sale, and there is no look-back window: unlike people buying another home, nothing applied before the sale counts. The intention is declared in the tax return for the year of the sale.

On the date of the transfer, the taxpayer, their spouse or their de facto partner must be verifiably retired or at least 65 years old. Retiring after the sale is too late. The home sold must have been your permanent home.

The two regimes add up: subparagraph (a) of paragraph 10 deducts from the amount to apply both the mortgage repayment and any reinvestment already made in a new permanent home.

Decreto-Lei n.º 97/2026, de 20 de maio renumbered article 10.º of the Portuguese IRS Code: this regime used to be paragraph 7 and is now paragraph 10, and the rule that withdraws the benefit used to be paragraph 8 and is now paragraph 11.

The calculator applies the proportional exclusion rule for mainland residents and starts from the gain already computed. It does not verify the eligibility conditions, does not handle reinvestment in a new permanent home (which has its own calculator) and does not cover the new affordable-rental regime of paragraphs 7 to 9.

Educational estimate, not financial advice. The marginal IRS rate depends on your total income (mandatory aggregation); always confirm the final figures and the treatment of the product with the Portuguese tax authority or a certified accountant.

The regime: an alternative to buying another home

The best-known exclusion for property capital gains requires reinvesting in another permanent home. Article 10.º(10) of the Portuguese IRS Code opens a second door for people who no longer want to buy: if the taxpayer, their spouse or their de facto partner is retired, or at least 65, on the date of the transfer, the sale proceeds may instead be applied into a life-assurance financial contract, an individual subscription to an open pension fund, a contribution to the public capitalisation scheme (the certificados de reforma) or a Pan-European Personal Pension Product, the PEPP. Once the conditions are met, the gain is excluded from tax.

The sum: what you actually have to apply

The base is not the gain, it is the realisation value, meaning the sale price. Subparagraph (a) of paragraph 10 subtracts two things from it: the repayment of any loan taken out to acquire the property and, where applicable, whatever has already been reinvested under subparagraph (a) of paragraph 5, that is into a new permanent home. Sold for 300,000 € and repaid 80,000 € of mortgage? You must apply 220,000 € to exclude the whole gain, even if the gain itself is only 90,000 €. It is the same trap as the ordinary reinvestment relief: applying only the gain leaves most of it taxable.

The two regimes add up, they do not exclude each other

The second deduction in subparagraph (a) is the detail almost no source explains, and it can save a lot of money. If you put part of the proceeds into a new home under the general regime of paragraph 5, you only have to apply the remainder into a retirement product. In the example above, with 120,000 € already committed to a new home, the amount to apply falls from 220,000 € to 100,000 €. You can therefore combine both exclusions on the same sale, and the calculator has a dedicated field for it.

Six months, and forwards only

Subparagraph (c) of paragraph 10 requires the products to be acquired within the six months following the realisation date. This is the harshest difference from the regime for people buying another home, which has a window of 24 months before and 36 months after the sale. Here there is no look-back and the deadline is six times shorter, so the decision about the product has to be made effectively by the date of the deed. The intention to apply the proceeds, even partially, must be declared in the tax return for the year of the sale.

The annuity is capped at 7.5% per year

This is the condition that turns the regime into an income rather than a withdrawal. Where the money goes into a life-assurance financial contract or an open pension fund, subparagraph (d) requires the product to be aimed exclusively at providing the buyer, their spouse or their de facto partner with a regular periodic payment over a period of 10 years or more, of a maximum annual amount equal to 7.5% of the amount invested. Apply 150,000 € and you may draw at most 11,250 € a year, or 937.50 € a month. Here is the arithmetic nobody publishes: at 7.5% a year the capital only comes back in full after 13.3 years, and the 10-year minimum period returns at most 75% of what you applied.

The public capitalisation scheme and the PEPP have no such cap

Subparagraph (d) opens with the words "where the investment is made by acquiring a life-assurance financial contract or by individual subscription to an open pension fund". It names two of the four products and does not name the public capitalisation scheme or the PEPP. On the letter of the law, the 7.5% ceiling and the 10-year minimum apply only to the first two, and paragraph 11, which withdraws the benefit when payments exceed "the limit set in subparagraph (d)", can only bite where that limit exists. This calculator follows that literal reading and says so rather than implying it: pick the product in the selector and watch the ceiling appear or disappear.

Partial application: the exclusion is proportional

Applying less than required does not forfeit everything. Paragraph 12 of article 10.º provides that the benefit covers only the proportional part of the gains corresponding to the amount reinvested. Applying 150,000 € where the law required 220,000 € excludes about 68% of the gain; the rest follows the ordinary regime, in which 50% of the gain is added to your income and taxed at the progressive IRS rates, through mandatory aggregation. The calculator applies exactly this proportion and shows the difference against not using the regime at all.

The three ways to lose the benefit

Paragraph 11 is explicit and worth knowing before you sign the product. The benefit falls away if the application is not made within the six-month deadline, if in any year the payments received exceed the limit in subparagraph (d), or if the regular payment of the instalments is interrupted. In each case the gain is taxed in the year the failure occurs, not in the year of the sale. In other words, the tax can come back eight years later if you draw more than allowed or stop the income.

What this sum leaves out

The calculator starts from the gain already computed: working out the gain itself, with the acquisition value uprated by the currency devaluation coefficient plus costs and improvement works, is the property capital gains calculator. It leaves out the verification of the eligibility conditions, which are flagged and never used to gate the arithmetic, the new affordable-rental reinvestment regime created by paragraphs 7 to 9 of the same article, non-residents, properties acquired before 1989 (exempt) and the exact marginal rate through aggregation, which is therefore an input field.

Worked example

Suppose you sold the home you lived in for 300,000 €, repaid the outstanding 80,000 € of mortgage at the sale and computed a gain of 90,000 €. You are already retired, so the amount to apply into a retirement product is 300,000 € minus 80,000 €, that is 220,000 €. You applied 150,000 € into a life-assurance financial contract: that covers about 68% of the requirement, so 61,363.64 € of the gain is excluded and 28,636.36 € stays taxable. Of that, 50% (14,318.18 €) is added to your income and, at a 35% marginal rate, costs 5,011.36 € of IRS instead of the 15,750 € you would pay without the regime: a saving of 10,738.64 €. In exchange, the policy may only pay you 11,250 € a year, or 937.50 € a month. To pay nothing at all you would have to apply a further 70,000 € within the 6 months.

Frequently asked questions

Do I have to buy another house to avoid capital gains tax?
From 65, or once retired, no. Article 10.º(10) of the Portuguese IRS Code lets you apply the sale proceeds into a life-assurance financial contract, an open pension fund, the public capitalisation scheme or a PEPP instead of buying another permanent home. The gain is excluded from tax just the same.
How much do I have to apply to pay no IRS?
The realisation value, less the repayment of the loan taken out to buy the property and less anything already reinvested in a new permanent home. Selling for 300,000 € and repaying 80,000 € of mortgage means applying 220,000 €, even if the gain is far smaller. It is the gain that gets excluded, but it is the sale value that has to be applied.
What is the deadline to apply the money?
Six months from the realisation date, meaning the sale, and forwards only. Unlike the regime for people buying another home, which accepts reinvestments made up to 24 months before the sale, there is no look-back window here. The intention to apply the proceeds is declared in the tax return for the year of the sale.
Is it enough that I am 65, or does my spouse count too?
Either of you counts. Subparagraph (b) of paragraph 10 requires the taxpayer or their spouse or de facto partner to be verifiably retired or at least 65 years old. What matters is the position on the date the property is transferred: retiring after the sale is too late.
How much can I draw from the product each year?
If you applied into a life-assurance financial contract or an open pension fund, at most 7.5% of the amount invested per year, and the product must pay a regular instalment for at least 10 years. On 150,000 € that is 11,250 € a year or 937.50 € a month. Drawing more than that limit in any year withdraws the benefit and the gain becomes taxable in that year.
Does the 7.5% cap apply to the certificados de reforma too?
On the letter of the law, no. Subparagraph (d) of paragraph 10 opens by limiting its scope to the life-assurance financial contract and the individual subscription to an open pension fund, and does not mention the public capitalisation scheme or the PEPP. That is a literal reading of the provision, which the calculator adopts expressly, but confirm your position with the Portuguese tax authority or a certified accountant before deciding.
Can I combine this regime with buying another home?
Yes, and it is one of the advantages that goes unnoticed. Subparagraph (a) of paragraph 10 deducts from the amount to apply not only the loan repayment but also whatever has already been reinvested under subparagraph (a) of paragraph 5, that is into a new permanent home. If you put 120,000 € into a new home, you only need to apply the remainder into a retirement product.
What if I apply only part of the amount?
The exclusion is proportional, under paragraph 12 of article 10.º. Applying 60% of the required amount excludes 60% of the gain; the remaining 40% follows the ordinary regime, in which 50% of the gain is added to your income and taxed at the progressive IRS rates.
Does the property sold have to be where I lived?
Yes. Paragraph 10 excludes from tax "the gains referred to in paragraph 5", and paragraph 5 deals with the transfer of property intended as the permanent home of the taxpayer or their household, proven by their tax domicile in the preceding 12 months. Selling a second home or a rental property does not qualify for this regime.
Is this regime paragraph 7 or paragraph 10 of article 10.º?
It is paragraph 10 today. Decreto-Lei n.º 97/2026, de 20 de maio renumbered article 10.º of the Portuguese IRS Code from the old paragraph 7 onwards, and the tax authority consolidated code marks the provision as "anterior nº7". The rule that withdraws the benefit used to be paragraph 8 and is now paragraph 11. Almost everything published before May 2026 cites the old numbering.

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Author: Thorben Rasmus Idel · Reviewed by: Nahar Geva · Last reviewed: 2026-08-22