Effective 1 January 2026, amendments to the IRS Code modify the treatment of capital gains on property sales in two key areas. First, the reinvestment exemption for primary residence proceeds now explicitly includes the purchase of properties classified as “ruins” (ruínas), provided reconstruction is completed within 24 months. Second, the deduction for home office expenses is expanded: taxpayers working remotely may deduct a proportional share of property depreciation, maintenance, and energy costs, capped at €1,200 annually. These changes, published in Decree-Law 78/2026, aim to support housing rehabilitation and adapt the tax system to post-pandemic work patterns.
Key Takeaways
- Ruins Reinvestment: Gains rolled over into ruin rehabilitation qualify for full exemption if the rebuilt property becomes the taxpayer’s primary residence within two years.
- Home Office Deduction: Employees and self-employed workers can claim a flat-rate deduction based on square meters used for work, simplifying compliance.
- Anti-Abuse Safeguards: Tax Authority may require proof of effective reconstruction and genuine professional use; penalties apply for misuse.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement