# Capital Gains and Alojamento Local



## Verinia (Apr 6, 2012)

We have a property registered under Alojamento Local, we are residents in Portugal, pay the tax and report to SEF as we should. So far, so good. Recently, however, I have heard that there may be Capital Gains implications in what we are doing, as the years that the property is registered under AL are not eligible for Capital Gains exemption and we will have to pay tax on these years at full rate when we sell the house. Can anybody who knows through any light on this? I don't want to cause any alarm and I don't have any facts on this, but it would be good to know what the law is on this and if there any formulas for calculating the gain. No-one mentioned this to us at the time of registration. I would also like to know what the position is for non residents who have an inicio de actividade under Category B for holiday lettings as you are required to do when you apply for an AL licence, as I have a friend in this position. Thanks for any light anyone can throw on the subject, professional or anecdotal.


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## RichardHenshall (Jul 26, 2009)

Surely a non-resident will always pay full CGT (or equivalent) in both Portugal and their home jurisdiction (subject to any double taxation agreements) as it would be, by definition, a second home?

Is a PT resident selling a second home not subject to Portuguese CGT-equivalent anyway?


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## Verinia (Apr 6, 2012)

RichardHenshall said:


> Surely a non-resident will always pay full CGT (or equivalent) in both Portugal and their home jurisdiction (subject to any double taxation agreements) as it would be, by definition, a second home?
> 
> Is a PT resident selling a second home not subject to Portuguese CGT-equivalent anyway?


Of course you are right re the non resident Richard, sorry. But a resident has a 50per cent reduction on a second home being sold, unless I'm wrong, and my accountant seemed to think there wouldn't be any exemptions on the years it was an AL.

I'll see if she can shed any light on it. My friends who are not residents are saying they had a letter saying they owed CGT now, on deregistering and they aren't intending to sell.

I don't want to cause any concern to anyone. I will ask my accountant.


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## Verinia (Apr 6, 2012)

Verinia said:


> Of course you are right re the non resident Richard, sorry. But a resident has a 50per cent reduction on a second home being sold, unless I'm wrong, and my accountant seemed to think there wouldn't be any exemptions on the years it was an AL.
> 
> I'll see if she can shed any light on it. My friends who are not residents are saying they had a letter saying they owed CGT now, on deregistering and they aren't intending to sell.
> 
> I don't want to cause any concern to anyone. I will ask my accountant.


This puts it better

Local Lodging and Capital Gains « NALLE


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