How much do you keep after selling your house in Portugal?

How much do you keep after selling a property in Portugal? The answer is the sale price minus what the seller pays. That covers the estate agency's commission, the other costs of the sale and any mortgage still outstanding. If you make a capital gain, the IRS (Portuguese income tax) due on it also counts, even though you only pay it later, with your annual IRS return.

The simulator below works this out line by line, from the agreed price to the amount you actually receive at the escritura (the deed of sale signed before a notary). The capital gains figure is an estimate. It depends on the price and year of purchase, on the expenses you can deduct and on whether you reinvest in another main home. If you leave out the purchase price and year, the result is shown before capital gains, rather than treating them as zero.

Everything starts from a realistic price. If you don't yet know what your property is worth, begin with the free estimate. To see each cost in detail, read how much it costs to sell a property in Portugal. If the property still has a mortgage, see also how to sell a property with a mortgage.

When it makes sense to work out your net proceeds

Your net proceeds don't change from one day to the next. The decisions that depend on them change a great deal. There are four moments when it pays to run the numbers again, and each one calls for slightly different figures.

Before asking for a valuation or speaking to an estate agent

Many owners realise at this stage that the sale will bring in less than they expected. If you bought only a few years ago with a large mortgage, you still owe the bank much of the capital. After the agent's commission and the loan repayment, what remains can be modest.

Your monthly statement isn't enough for this calculation. Ask the bank for the early redemption figure on a date close to the planned sale. That amount may include an early repayment charge that the statement doesn't show.

The price you enter here is an assumption. To start from a market-based figure, get a free estimate first. Then run the simulation with that value and with a slightly lower one, to see how much room you have.

If the result is negative or close to zero, giving up isn't the only option. You could wait a few years while you pay down the mortgage, or let the property instead. The sell or rent tool compares the two routes. The guide on selling a property with a mortgage explains how the loan is paid off at the escritura (the deed of sale signed before a notary).

Before signing the CPCV

The CPCV (contrato-promessa de compra e venda, the promissory contract of sale) sets the price, the deposit and the deadline for the escritura. Once it is signed, backing out is expensive. If the seller withdraws, the law requires them to return the deposit with a penalty.

Run the simulation again with the figures in the draft contract, not the ones in the listing. Before signing, check the following:

• the price stated in the draft, which is often no longer the first offer;
• the commission set out in your agreement with the estate agent, including VAT;
• the amount needed to clear the mortgage on the date set for the escritura;
• what is needed to cancel the mortgage charge in time, as the bank must attend or send the release document (distrate).

Don't spend the deposit before the escritura. If a document is missing, such as the licença de utilização (the occupancy licence), completion can be delayed or fall through, and you would have to pay back what you received. The guide to documents for selling a property lists what to gather before signing, and the guide on sale timescales shows what usually holds up the escritura.

When the sale is funding your next purchase

Here, your net proceeds become your deposit. The bank lending on the new purchase wants to know how much of your own money goes into the deal. What counts is the cash left over from the sale, not the price of your old property.

Buying has its own costs too: IMT (property transfer tax), stamp duty, the escritura, land registration and the fees on the new mortgage. They are paid out of the same money. So the deposit you actually have is your net proceeds minus those costs.

Capital gains also belong in this calculation. If you sell your main permanent residence and reinvest in another, the gain may be exempt from tax, subject to time limits and conditions. If you reinvest only part of it, the remainder may be taxed. Simulate both scenarios before setting your maximum purchase price.

1. Simulate the sale at a realistic price, not the price you would like.
2. Subtract the costs of buying the new property from the result.
3. Compare what remains with the deposit the bank requires for the new mortgage.
4. If you come up short, lower your purchase ceiling before you start viewings.

The order of events matters as well: selling first, buying first, or completing both on the same day. The page on selling the family home to move covers this situation in more detail.

When you receive an offer below the asking price

A lower offer cuts what you receive by almost the same amount. The commission falls slightly with the price, but the sum owed to the bank stays the same. If you still owe a lot, the same reduction hits much harder.

An illustrative example: on a sale at €300,000, the seller is left with €60,000 after clearing the mortgage. An offer of €285,000 takes away nearly a quarter of that. On paper the discount looks small, but in what you actually receive it isn't.

Turning an offer down has a cost as well. Each month without a sale brings another mortgage payment, condominium fees, insurance and, at the end of the year, IMI (municipal property tax). Compare today's offer with the asking price a few months from now, after those outgoings. The page I've received an offer on my property helps you judge whether the amount offered is fair. If your property has been on the market for a long time, see my property isn't selling.

How to read the result, line by line

The result starts from the sale price. It then takes off, line by line, everything that goes out before the money reaches you. The last line is the net amount: a rough idea of what you keep, not a bank statement.

The deed price and the money that reaches your account

The price is the figure written in the escritura (the public deed of sale). The amount paid into your account that day is almost always lower. If you still have a mortgage, the bank is paid the outstanding capital first. The estate agency usually receives its commission at the signing itself, by cheque or bank transfer.

Then there is the deposit paid when the CPCV (contrato-promessa de compra e venda, the promissory contract of sale) was signed. That money reached your account weeks or months earlier. At the deed, you only receive the balance of the price. The total is the same, but take care not to count the deposit twice when you plan your finances.

Capital gains tax is not paid on the day of the deed. The gain is declared in the following year's IRS (personal income tax) return, on Annex G, and paid when the tax assessment arrives. So set that amount aside, even if your balance looks comfortable after the sale.

Why the commission is shown with VAT

Estate agencies usually quote their commission as a percentage, excluding VAT. VAT at the standard rate is added to the agreed amount, as set out in Article 18 of the VAT Code. That total is what you are invoiced, which is why the result shows it this way.

On a property worth a few hundred thousand euros, VAT adds several thousand to the invoice. If you work things out using only the quoted percentage, your net figure will be too optimistic.

When comparing agencies, read the fee clause in the contrato de mediação (the agency agreement). A commission with "VAT included" and another with "plus VAT" at the same rate do not leave you with the same amount. To see how much each cost weighs, read the guide on how much it costs to sell a property.

A net amount "before capital gains"

This label appears when the purchase price or the year of purchase has been left blank. The figure shown does not yet deduct tax on the gain from the sale. Read it as a ceiling: what you keep will be the same or lower.

The missing details are usually in your purchase deed, which states the price and the date. If you cannot find it, ask the notary's office for a copy or check the certidão permanente (the land registry certificate for the property), which records the purchase. The rules for calculating the gain are in Article 43 of the IRS Code.

If you received the property through an inheritance or a gift, its acquisition value follows its own rules. In that case, read the page on property estimates in an inheritance before entering the figure that seems right to you.

A negative or very low result

A negative figure means the outstanding mortgage, plus the costs of the sale, is higher than the price. The bank only cancels the mortgage once it has received everything it is owed. You have to cover the difference yourself, by the day of the deed.

This happens mostly with recent mortgages, with purchases financed almost in full, or when the asking price has had to come down. The early repayment fee also adds to the bill. The bank states it in the document showing the amount owed.

1. Ask your bank for a statement of the amount owed on the planned deed date, with all fees included.
2. Check that your sale price is in line with the local market, with a free estimate, before lowering it or turning down an offer.
3. Negotiate the agency's commission before signing the agency agreement.
4. Decide where the difference will come from: savings, family help or an arrangement with the bank, discussed well in advance.

The order of the steps when you have a mortgage is explained in the guide on selling a property with a mortgage.

A positive but low result also deserves attention if you are selling to buy again. What you keep has to pay the deposit on the new purchase, the IMT (property transfer tax paid by the buyer) and the deed. If a specific offer leaves little room, the page I've received an offer will help you weigh it up.

What changes the amount you receive

The simulator's result rests on just a few figures. Each one can shift the outcome by several thousand euros. Before you decide, run more than one simulation: one with the price you hope for and another with a more cautious price.

The price agreed in the escritura, not the asking price

The figure that counts is the one in the escritura (the public deed of sale signed before a notary or other authorised official). Between the listing and the CPCV (contrato-promessa de compra e venda, the promissory contract of sale) there is almost always a negotiation. Few buyers pay the asking price without trying to bring it down.

Say you list the property at 320,000 euros and agree a sale at 305,000. That 15,000 comes straight out of what you keep. If the commission is a percentage of the price, it drops a little too, but that barely offsets the loss.

To judge how much room for negotiation is realistic in your area, look at recent sales of similar properties. Current listings show what sellers are asking, not what buyers are paying. The free valuation gives you a value range based on the local market. If you already have an offer, see how to tell whether an offer is fair.

The commission you agree with the estate agent

Commission is not set by law. It is negotiated, and it varies with the agency, the type of contract (exclusive or not) and the value of the property. Check in the contrato de mediação (the agency agreement) whether the rate quoted already includes IVA (Portuguese VAT).

One percentage point sounds small. On a property sold for 300,000 euros, it comes to 3,000 euros, plus IVA. So compare offers from several agencies before you sign.

Selling without an agent saves the commission, but it costs you time. You handle the viewings and screen the people who get in touch. Gathering the documents and booking the escritura also fall to you. In that case, set the commission to zero in the simulator and put aside a sum for adverts and photos. The other costs of selling are explained in how much it costs to sell a property.

Ask as well when the commission is due: at the CPCV, at the escritura, or split between the two. The total is the same, but the date the money leaves your account changes.

The mortgage balance still owed on the day of the escritura

What the bank receives is the capital outstanding on the date of the escritura, not the figure on today's statement. Every instalment paid until then reduces it a little. If the escritura is a few months away, enter the balance expected for that date in the simulator.

Ask your bank for a statement showing the exact amount needed to pay off the loan on the planned date. That is the sum the bank will require at the escritura to cancel the mortgage. If the date moves, ask for an updated statement.

The bank may charge an early repayment fee. The law caps it, with a different limit for fixed and variable rates. There may also be charges for the distrate (the bank's formal release of the loan) and for cancelling the mortgage registration. Check the current rules on the Banco de Portugal's Bank Customer Portal. The order of the steps is set out in selling a property with a mortgage.

Capital gains: purchase date, improvement works and reinvestment

The capital gain is not simply the sale price minus the purchase price. The purchase price can be uprated using currency devaluation coefficients, published each year by the tax authority (Finanças). The older the purchase, the larger that uprating tends to be, and the smaller the taxable gain.

Improvement works carried out within the period set by law can be deducted from the gain. You need invoices issued with your NIF (Portuguese tax number). A new kitchen or a licensed extension usually counts. Repainting or small maintenance repairs generally do not.

Other expenses also come into the calculation, such as the IMT (property transfer tax) and the imposto do selo (stamp duty) paid when you bought, or the commission on this sale. Before you run the simulation, gather these papers:

• the purchase escritura, showing the price and the date;
• proof of the IMT and imposto do selo paid on purchase;
• invoices for the works, issued with your NIF;
• the agency agreement and the commission invoice for this sale.

If you sell your habitação própria e permanente (your main, permanent home) and buy another for the same purpose, the reinvested part of the gain may be exempt. The law sets deadlines for reinvesting, both before and after the sale. Your intention to reinvest must be stated in the IRS (income tax) return for the year of the sale. If you reinvest only part of the proceeds, only that part benefits from the exemption.

These rules have exceptions and change with each State Budget. For your own situation, check on the Portal das Finanças or with an accountant. If you do not live in Portugal, read selling a property as a non-resident as well.

Limits of the simulation and what to do next

The figure you see is there to help you decide. It helps you set a price, answer an offer or check whether the sale will fund your next purchase. It is not an IRS (income tax) assessment, nor a calculation by the tax authority (Finanças). The official figure only arrives later, with the tax assessment notice.

Capital gains tax is only known the following year

Tax on the capital gain is not paid at the escritura (the deed of sale signed before a notary). The sale goes on the following year's IRS return, in Annex G, and the tax authority works out the tax along with the rest of the return. The rules are set out in the Portal das Finanças FAQs on capital gains.

For a tax resident, the tax depends on the household's other income: salaries, pensions, rents. The same gain can cost one family more than another. That is why the simulation gives an order of magnitude rather than an exact amount.

In practice, if you sell in March, the assessment only reaches you in the summer of the following year. Until then, set aside the share that covers the tax instead of spending the whole net amount straight away. If you are counting on the reinvestment exemption and do not buy within the legal deadline, the tax becomes due again.

When to check with an accountant or your bank

Some situations fall outside the simple case the simulator handles. In those, treat the result as a starting point and get confirmation before signing the CPCV (the promissory contract of sale).

• Inheritance: the acquisition date and value follow their own rules, and the gain is split between the heirs. See the page on inherited property.
• Joint ownership: each co-owner declares their own share. What each one keeps depends on their share and their tax position.
• Non-residents: taxation and filing obligations differ from those for residents. See selling without living in Portugal.
• Charges other than the mortgage: a seizure order, a usufruct, a second mortgage or an attachment. These must be cleared by the escritura, and the creditor decides what that costs. The certidão permanente (the land registry certificate) shows what is registered.

Even with a single mortgage, the amount owed to the bank may differ from the capital you entered. Interest up to the date of the escritura and any early repayment fee are part of the sum. Ask your bank for the exact figure on that date, as the guide on selling with a mortgage explains.

Everything rests on the price you enter

The simulator does not know what your property is worth. It works from the price you typed in. If that price is optimistic, so is the net amount, and your plan for the next purchase sits on a shaky base.

To find out whether that price is realistic, ask for a free estimate of your property's market value. It draws on market data, sales and listings in your area, and on the features of your property. It is neither a bank valuation nor a certified valuation, but it tells you whether the price you have in mind is in line with the local market.

Frequently asked questions