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Capital Gains Tax

Discussion forum for expats moving to or living in Portugal.
Subforums: Property for Sale/Rent, 2nd Hand Items for Sale/Wanted

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Capital Gains Tax

Post Posted: Wed Apr 03, 2013 6:16 pm

Just a word of warning. As you all probably know, CGT is due on the sale of all property here (unlike the UK where it is only on 2nd and subsequent property).

We sold our villa in 2009 and bought a new one. I paid my (substantial) CGT in 2010. I have just received a letter from Finanças claiming that they made a mistake and that I owe a further sum of money amounting to 30% of what I paid originally.

I have obviously referred it to my Accountant.

It appears that the Law changed in 2007 and Finanças are trawling through old papers to find out where they overlooked applying the changes.

The new Law states that only improvements made on your property in the 5 year period prior to selling is eligible to be taken into account for mitigating CGT. So, if you buy a villa to renovate it, the cost of the renovations cannot be offset against CGT unless you sell within 5 years. In our case it was a large extension that we had built in 2003; 6 years before our sale.

So, out busking this afternoon!!!!!!


_________________

Rod S

 

rodstocker
Forum Leader - Portugal
Forum Leader - Portugal
 
 
  
Re: Capital Gains Tax

Post Posted: Wed Apr 03, 2013 6:50 pm

Didn't you rollover gain into new property?

 

Canoeman
Forum Legend
Forum Legend
 
 
  
Re: Capital Gains Tax

Post Posted: Wed Apr 03, 2013 8:03 pm

- Canoeman

Didn't you rollover gain into new property?



I am also led to believe that providing the monies from the sale of a property are reinvested in another property within three years, no CGT is payable.

 

Jessel
Regular Poster
Regular Poster
 
 
  
Re: Capital Gains Tax

Post Posted: Wed Apr 03, 2013 9:09 pm

Didn't you rollover gain into new property?



Yes. But all this does is to establish a new baseline. Otherwise, when you finally sell your last property (on death or departure from the country) you will have to pay the gain from the difference between your very first property and the final one.


_________________

Rod S

 

rodstocker
Forum Leader - Portugal
Forum Leader - Portugal
 
 
  
Re: Capital Gains Tax

Post Posted: Wed Apr 03, 2013 10:19 pm

Think you need a new accountant if that's advice he's given you, CGT or CIRS is only applicable to the property your selling, if you reinvested gain within EU in another primary property you shouldn't have physically paid anything, could be very worthwhile checking the information he filed and how he filed it.

 

Canoeman
Forum Legend
Forum Legend
 
 
  
Re: Capital Gains Tax

Post Posted: Wed Apr 03, 2013 11:17 pm

just wondered with the state of the market and so many villas being sold at less than they were purchased for, does this mean the tax man will give a tax refund on the percentage loss on a sale .

we trust of course that the finances will trail thru their records insuring all refund are givens

as honest tax payers we would have it no other way

after all what's good for the goose is ...

 

scruffts2006
Forum Legend
Forum Legend
 
 
  
Re: Capital Gains Tax

Post Posted: Wed Apr 03, 2013 11:27 pm

:):) No Gain No Pay but no refund:(

 

Canoeman
Forum Legend
Forum Legend
 
 
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