^{As Portuguese emigrants have known for several years, there was discrimination in the taxation of non-residents' real estate capital gains.
This is because the taxation of a resident's real estate capital gain and the taxation of a non-resident's real estate capital gain were different, even if they had sold the same property, and for the same amount.
But this was not always the case.
Strictly speaking, when the IRS code (CIRS) came into force in 1989, there was no discrimination between residents and non-residents. In both cases, only 50% of the balance of the capital gain was taxed.
However, with the 2002 State Budget, discrimination was introduced, providing that residents were only taxed on 50% of the balance of the capital gain, while non-residents were taxed on 100% of the balance of the capital gain.
Now, according to the rules of the European Union (namely through the signing of the Maastricht Treaty in 1992, one of the basic principles of the Union was precisely that of non-discrimination between residents of the different Member States.
What is certain is that after 2002 discrimination became a reality.
This discrimination was the subject of several complaints to the Tax Authority (AT) and as a result several cases were brought before the Court of Justice of the European Union (CJEU).
The best known are the Hollman ruling (2007) and the MK ruling (2021).
In the period between these two rulings, more precisely with the 2007 State Budget, a subsidiary regime was approved that allowed EU residents to opt for taxation that was more similar to that of residents in Portugal.
Therefore, and after much pressure, the 2023 State Budget definitively ended the discrimination.
So, as of January 1, 2023, real estate sales made by non-residents in Portugal will only be taxed on 50% of the balance of capital gains.
This ends discrimination.
However, with the end of discrimination, the 28% autonomous tax rate also ends, as the balance of real estate capital gains will now only be taxed on 50%, but according to the progressive IRS brackets.
And now you ask me: so how will non-residents know which bracket they will be subject to?
Well, this new form of taxation requires non-residents to declare all their income in Portugal, so that we can see which bracket they belong to.
Then only the 50% of the balance of capital gains will be taxed at that rate.
But in order for the rate to be determined, the AT will need to know all the income of non-resident taxpayers.
Let's give two examples, so that it's easier to understand.
A Swiss emigrant couple who sell a property in 2023 and get a capital gain balance of €27,995 will be taxed on 50% of that capital gain balance, but to calculate the rate they will need to declare their Swiss salaries. If this couple in 2023 has employment income of €120,000, the overall income for calculating the applicable rate is €133,997.50.
According to the IRS brackets for this income, this couple would be subject to a 45% IRS rate. Therefore, on the 50% of the capital gain balance, this couple will pay 45% IRS, meaning they will pay around €6,300 in IRS.
If, on the other hand, the change in the law had provided for only paying IRS on 50% of the capital gain balance, but at the flat rate of 28% (as existed until 2022), this couple would pay around €3,900 in IRS.
Tell me now: is this good news? Or is it just a poisoned gift after all?
Finally, it's important to note that all non-residents who sold property in Portugal between 2019 and 2022 should inform themselves, as they can only be taxed on 50% of the capital gains balance, and not 100% of the capital gains balance.
Mainly because with the entry into force of the 2023 State Budget, this new rule will only apply to real estate sales made after January 1, 2023. This means that real estate sales made in 2022 will be taxed on 100% of the balance of capital gains, which is why taxpayers must claim and assert their rights.}

^{Font: Balcão do Emigrante}