# how to report a house sale



## steve01 (Dec 8, 2010)

Hi,
any advice would be welcome.

I sold a house in Portuga llast year
I still live here - different house, already owned prior to the sale.

Basically i sold my holiday home, no profit.

I went to the Camera and financas and paid all outstanding debts and taxes in the area the house was sold in 

Now i believe even though there was no profit i have to declare the sale to my financas, different area to the financas where the house was sold.

Can someone tell me which form i need to return to the financas and when.

Many thanks


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## canoeman (Mar 3, 2011)

You must declare on Anexo G with Financas along with any other income you have.

Sale 2014 reported March by paper returns 2015, April 2015 via internet but download not available till March sometime, doesn't matter what area or office you file return at the important thing is to file at correct time so your not fined.

If you've ignored your responsibility to report your worldwide income before you might find that something like this might create a problem for you


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## steve01 (Dec 8, 2010)

many thanks,
we live in Portugal and report all income here
so hopefully no problems


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## TonyJ1 (May 20, 2014)

steve01 said:


> Hi,
> any advice would be welcome.
> 
> I sold a house in Portuga llast year
> ...


If the declared price was below the tax value (valor tributário), you may still get a tax bill to pay. Also make sure, that the purchase price of the house sold, that there was no 'cash' element, as was often done. While you may think that there is no capital gain, there may be, as only the original cost (indexation is allowed) plus documented expenses on purchase plus capital expenditure over the previous 5 years can be taken into account to determine the capital gain. Agent's commission is deductible, only if incorporated in the sale contract

There are specific rules dealing with reinvestment / roll over relief should you come foul on the above. It may be sensible to get professional advice in filling your capital gains form to avoid any come backs.


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## steve01 (Dec 8, 2010)

Hello thanks for that,

we bought the house to live in , then decided we preferred to live in the countryside.

We owned in for 3 years and sold it for exactly the price we paid for it - i was happy in the present economic climate
so our only loss was the legal fees.
With no gains
Hopefully this will mean no tax

I thought all of the 'plus value', council guessing at the real value of your house was restricted to the lunatics in Spain


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## TonyJ1 (May 20, 2014)

steve01 said:


> Hello thanks for that,
> 
> we bought the house to live in , then decided we preferred to live in the countryside.
> 
> ...


The property valuation is not a guess, there are mathematical formulas involved - though, the Finanças often do get it wrong - in my practice more than 80% of the valuations are wrong (often too high, sometimes too low) , though sometimes the valuation errors are only a few thousand euros, so not with the hassle to ask for a revaluation.


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## steve01 (Dec 8, 2010)

hi,
so this value has no relationship with the price paid or the price sold for
So theoretically you could think you bought at a good price, sell at break even , or at the moment considerably lower and still have a potentially enormous tax bill
So a goverment invented system could value my house based on the height of the property market, I would have no knowledge of this, 2 lawyers, 2 notaires and one estate agent were involved and none of them mentioned this
I love Portugal, but when you encounter the government its really possible to hate it here


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## steve01 (Dec 8, 2010)

Ordem dos Engenheiros

I defy anyone to work out there own value


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## TonyJ1 (May 20, 2014)

Sorry Steve, but all the laws and regulations are published. As they say, ignorance of the law is not an excuse. If you did not buy with under the table money, I should think that you do not have a problem. 

There is a code 'Código do imposto municipal sobre imóveis´which set out how properties are valued for tax purposes (though there are a lot of mistakes as they did a nationwide revaluation of properties - more than 5 million within a short period of time) and even after asking for revaluations, there are details that they get wrong even after this. Sometimes you have to appeal and set out where they have gone wrong. The mathematical formula has 6 different factors, some of these factors then have have other factors and calculations - so when these are processed by sub contractors (who don't care - they just want their fee) and then the common person assumes the government knows what they are doing, the errors will be there for ever. The valuers have to follow the rules and the owners get a notification of how it is made up and they may challenge, but the reality is that most people assume that there is nothing to be done, or they don't know who to approach to check the numbers and inertia kicks in. In reality the valuation document that is sent to you is essentially mumbo jumbo to 99.9% of the population (I used to be one of those 99.9%).

As to the calculation of the capital gains, it is in the personal tax code as well. When you go to a lawyer, or a notary they will take care of the transaction in front of them - the fee that you pay them does not cover the situation of - do you understand this, do you understand that. Even other professionals will not cover these issues unless specifically asked. You need a person with a sensitivity to the issues that may arise.


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## steve01 (Dec 8, 2010)

I really do thank you for all of the information.
i agree ignorance is no excuse, but i still think some law makers should be strung up.

However thanks to your explanation i have now checked the valor patrimonial tributario and thankfully it is lower than the selling price.

So hopefully as we were totally honest in every way all will end well that should end well


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