Summer of ‘89:

(Some) properties acquired before 1st January 1989 benefit from a significant tax advantage in Portugal: they are exempt from capital gains tax upon sale.

This exemption stems from the introduction of the IRS Code, which ensured that only properties acquired and sold under its regime would be subject to taxation.

However, cases where ownership was acquired in stages — such as through inheritance from different family members at different times — require careful analysis. For example:

✔️ A share inherited from a parent who passed away before 1989 remains tax-free.

❌ A share inherited from a parent who passed away after 1989 is subject to capital gains tax upon sale.

Key takeaways:

✅ If you own a pre-1989 property, its sale remains fully exempt from taxation—but must still be reported in Annex G1 of your IRS return.

✅ If ownership was acquired in different stages, taxation depends on the specific acquisition dates.

✅ A careful review of acquisition history is essential to avoid unexpected tax liabilities.

‍So, if you’ve got a vintage property in your portfolio, now might be the time to part ways with it—before ‘tax nostalgia’ turns into a costly surprise!