# Calculating CGT



## 4rivers (Jun 16, 2011)

I purchased a property ( in Portugal ) in 1997 , on a 6 yr mortgage , ( and payed 1 yr early ) As I was unmarried at the time , I was not entitled to any tax relief on the interest payabe to the mortgage provider. The costs were 20,000 Euros ,for the property, plus 6 % sisa ( 1,200 Euros ) plus the Escritura costs which were approx. 2,500 Euros . The interest I paid on the mortgage was 5,100 Euros. So by 2002 , total payed was 28,800 Euros . 
Now , I hope ( to god ) to sell the property this year for a mininium of 75,000 Euros . I know the CGT is 25 % because I am not resident in Portugal at the moment or for 183 days this year . 


Question - how do I calculate the Inflation Adjustment Coefficient ?? And when do I calculate it from a) from when I first bought the property 1997 or b) from when I finally finished paying for it 2002 . 
Is the Inflation Adjustment Coefficient the same as the (CPI) Consumer Price Index or is it a different animal ?? 

Can anyone provide a link or an answer ?? Umm thanks in advance.


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## canoeman (Mar 3, 2011)

CGT calculated by
A)Sale price as Escritura minus allowed expenses
Original (SISA) IMT, Stamp Duty, registration at Conservatoria, lawyer if used, correctly receipted Capital expenditure for the 5 years prior to sale, selling costs, estate agents fees but they must be registered & named in selling Escritura. They are very unlikely to accept lawyers fees if used when selling as that is considered a buyers cost.

B)Purchase price as in buying Escritura x co-efficient 1.38 for 1997 

CGT calculation is B-A= profit x 25%

Not handled mortgage but interest fits in there somewhere as does being married. Financas handle the calculation, but if you sell this year then you must file IRS return in mid to late May 2013 + Anexo G Section4 if more than one Atricle number then all values have to be apportioned,


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## canoeman (Mar 3, 2011)

Forgot to include buying Escritura costs in A, all helps


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## 4rivers (Jun 16, 2011)

Canoeman - thanks , but based on the numbers given , and nothing extra , I calculate that as 10,925 Euros as CGT , or did I do that wrong ?


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## canoeman (Mar 3, 2011)

I make it a bit less, but you must have more expenses you can offset


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## 4rivers (Jun 16, 2011)

Additional expenses I can claim for , don't think so . I will be hard pressed to claim for , the expenses I can claim for , as I don't have any of the receipts ( as my ex , absconded with all the property paperwork, tax receipts etc ) 
Next question ( Canoeman ) I read on another thread , that if purchasing another property in the EU , you are not liable for CGT on a property sold in Portugal . Is that correct ??????


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## canoeman (Mar 3, 2011)

As your not a resident then no, your liable to 25% tax on gain.

Providing you are a Resident and this is your primary home, and you reinvest profit within 3 years in another primary home in the EU then yes, the reinvestment can be purchase, improvement. You still have to make IRS return and specify re-investment.

Tax receipts you can replace and probably quite a few others, I would be looking to replace anything possible it all helps to reduce liability.


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