Other Considerations

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However, the tax consequences in Portugal are not the only considerations to take into account. The specifics of the relevant double taxation treaty needs to be examined, as well as the local laws and regulations applicable in the country of tax residence.

A typical example of this for a UK resident, is the fact that UK tax residents also pay tax on the gain from the Portuguese property in the UK, however, under the double taxation treaty, any tax paid in Portugal may be credited against the tax due in the UK.

Is there a Preferred Structure to Hold Property in Portugal?
A topical query – what is the most preferred and tax efficient structure to hold property in Portugal?

The answer may vary depending on the objectives and circumstances of each individual indonesia mobile database investor, as well as the proposed usage of such properties. It is however worth noting, that for a non-tax resident investor wishing to invest in property to earn rental income, holding such a structure through a Portuguese (resident) company may be beneficial, with tax rates varying between 17% to 21% for properties located on the Portuguese mainland and 11.9% to 14.7% for properties located in the autonomous region of Madeira, in comparison to the flat rate of 21% for non-resident entities.
For residents, holding a primary residence in their personal capacity, may be more beneficial from a capital gain point of view. Thus, each situation needs to be considered on a case-by-case basis.
Other considerations, however, need to be taken into account, such as the operational costs for running a company and ensuring appropriate substance exists. The cost of holding a property through a corporate structure may thus not exceed the benefit in all circumstances.