Capital Gains Tax on Property Sales in 2026: A Country-by-Country Guide
When you sell a property for more than you paid, the profit — the capital gain — is subject to tax. However, the rules governing how that gain is calculated, what costs can be deducted, and what rate applies differ substantially between countries. Understanding these differences is essential for any real estate investor operating across borders.
How Capital Gains Are Calculated
In most countries, the taxable gain is the difference between the net sale price (after selling costs such as agent commissions and notary fees) and the adjusted acquisition cost (purchase price plus buying costs, plus documented improvements). The more costs you can legitimately deduct, the lower your taxable gain.
Portugal
Portugal taxes capital gains on property at a flat rate of 28% for tax residents (or at the progressive IRS scale if that produces a lower result). However, only 50% of the capital gain is included in taxable income — meaning the effective rate is approximately 14% of the gross gain.
The acquisition cost is adjusted using the currency devaluation coefficient (coeficiente de desvalorização monetária) published annually by the Portuguese Tax Authority, which partially compensates for inflation. This coefficient applies when the property has been held for more than 24 months.
| Item | Rule |
|---|---|
| Tax rate | 28% flat (on 50% of gain) |
| Effective rate | ~14% of gross gain |
| Inflation adjustment | Yes — annual coefficient |
| Primary residence exemption | Yes — if proceeds reinvested in another primary residence within 36 months |
| Holding period requirement | None |
The most important exemption is the primary residence reinvestment exemption: if you sell your main home and reinvest the full proceeds in another primary residence within 36 months (or 24 months before the sale), the gain is fully exempt. This exemption does not apply to investment properties.
Spain
Spain taxes capital gains on property as savings income (rendimientos del capital), with a progressive scale:
| Gain Amount | Rate (2026) |
|---|---|
| Up to €6,000 | 19% |
| €6,001 – €50,000 | 21% |
| €50,001 – €200,000 | 23% |
| €200,001 – €300,000 | 27% |
| Over €300,000 | 28% |
Spain applies an inflation adjustment coefficient (coeficiente de actualización) for properties acquired before 1994, but this benefit was largely eliminated for properties acquired after that date. Selling costs (agent fees, notary, taxes paid on acquisition) are fully deductible.
The primary residence exemption applies if the seller is over 65 years old (full exemption) or if the proceeds are reinvested in a new primary residence within two years.
Germany
Germany has one of the most investor-friendly regimes for long-term holders. Properties held for more than 10 years are completely exempt from capital gains tax. For properties sold within 10 years, gains are taxed as ordinary income at the seller's marginal rate, which can reach 45% plus 5.5% solidarity surcharge (effectively up to ~47.5%).
This creates a strong incentive to hold properties for the long term. For investors using a GmbH (limited company), the gain may be subject to corporate tax (15%) plus trade tax (Gewerbesteuer, typically 14–17%), making the total effective rate around 30%.
France
France taxes capital gains on property at 19% plus social contributions of 17.2%, for a total of 36.2%. However, France applies a generous holding period abatement (abattement pour durée de détention):
| Holding Period | Income Tax Abatement | Social Contributions Abatement |
|---|---|---|
| Up to 5 years | 0% | 0% |
| 6–21 years | 6% per year | 1.65% per year |
| 22 years | 4% (full exemption) | 1.60% |
| 23–30 years | — | 9% per year |
| 30+ years | Fully exempt | Fully exempt |
This means a property held for 22 years is fully exempt from income tax, and after 30 years it is exempt from all taxes. The primary residence is always fully exempt from capital gains tax in France.
United States
The US distinguishes between short-term (held ≤1 year, taxed as ordinary income up to 37%) and long-term (held >1 year) capital gains. Long-term rates are 0%, 15%, or 20% depending on the seller's income level. Most middle-income investors pay 15%.
The most powerful exemption is the §121 exclusion: if the property has been your primary residence for at least 2 of the last 5 years, you can exclude up to $250,000 of gain (single) or $500,000 (married filing jointly) from tax entirely.
Additionally, the US allows depreciation recapture — if you have been depreciating the property as a rental, the accumulated depreciation is taxed at a flat 25% rate on sale, regardless of your income level.
Practical Implications for Investors
The country of residence and the country where the property is located both matter. Most countries have double taxation treaties that prevent the same gain from being taxed twice, but the mechanics vary. In general, the country where the property is located has primary taxing rights.
For investors planning to sell, the key levers are: documenting all acquisition costs and improvements meticulously, understanding the holding period rules (especially Germany's 10-year rule and France's abatement schedule), and timing the sale to maximise available exemptions.
Use the PropCalc Capital Gains Tax Calculator to model your specific situation — including acquisition costs, improvements, inflation adjustment, and applicable exemptions — for any of the five countries covered in this guide.