IRS on capital gains: Government wants to eliminate time limit for exemption.
If you have bought a new house, the measure that the Government wants to implement may interest you: the exemption on capital gains can only be requested once every three years, and the goal is to end the restriction on the number of times to benefit.
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Government aims to eliminate restriction on the number of times to benefit from capital gains exemption.
Currently, the exemption on capital gains when buying a house can only be requested once every three years. However, the government now intends for there to be no more restrictions on the number of times citizens can benefit from this regime.
According to Notícias ao Minuto, the Government intends that "Portuguese families now can benefit, without time limit, from the exemption of IRS on capital gains obtained from the sale of their home, when these are used to purchase a new property for own and permanent habitation. So far, taxpayers can only benefit from this exemption once every three years."
This is a change included in the Government's proposal in Parliament regarding the housing sector. The law will take effect starting December 31, 2023, with cases that were already in place at the end of last year. This implies that there may be cases already impacting this year's IRS, based on 2023 income, so there may be a need to make replacement declarations.
In general, through this measure, it is expected that families can now change houses as many times as they want, always accessing the exemption from income tax on the resulting capital gains, when directed towards the purchase of another.
The Government's objective is to repeal restrictions imposed on reinvesting real estate capital gains, also aiming to reduce the minimum holding period of a property to benefit from the IRS exemption from 24 to 12 months, in cases of own and permanent housing.
However, this is a measure that, already presented as a request for legislative authorization, will still have to first pass through the Opposition.
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