💔 Divorce and selling your house. Two words that, together, already bring headaches.
But pay attention: changing your fiscal residence before the sale could make you lose the capital gains tax exemption.
Yes, even if you’re still paying the mortgage or splitting costs with your ex. For the Tax Authority, what matters is simple: where your fiscal address is registered.
🏡 So, what exactly is this exemption?
When you sell your main residence and use the money to buy another home, you may not have to pay tax on the profit from the sale (capital gains).
But only if:
- The house was your primary residence for the 12 months before the sale (and your fiscal address matches).
- The sale amount (minus any remaining mortgage) is reinvested in a new home.
- The reinvestment is made within the deadline: up to 36 months after the sale or up to 24 months before.
😕 "But I’m still paying the mortgage... doesn’t that count?"
No.
The Tax Authority only looks at the official address.
Even if you’re paying the mortgage or splitting expenses, if you changed your fiscal address before the sale... say goodbye to the exemption.
💡 How to avoid losing the capital gains tax exemption?
Three simple and clear tips:
🔸 Keep your fiscal address at the old house until you sell. Don’t rush.
🔸 Keep all documents organised. Address, contracts, reinvestment proofs – everything in order.
🔸 If needed, speak with a specialist. It can save you headaches and money.
👀 Attention to other situations
The capital gains tax exemption also applies if the house was bought before 1989 or if you’re over 65 and reinvest in financial products (like retirement funds or pension plans).
📌 Important note:
This topic gained attention after a recent case where the Portuguese Tax Authority denied the capital gains tax exemption to a taxpayer who had changed their fiscal address years before selling the house, even though they continued paying the mortgage and sharing expenses with their ex-spouse. The information in this article is based on current legal rules and guidelines, so you can make informed decisions and avoid surprises.
If you’re selling your house after a divorce, be prepared and don’t let the capital gains exemption slip away.
Knowledge is power.
If you need help, we’re here for you. 😉
👉 Get in touch and clear up all your doubts!
