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Just come back from the Finanças. Ongoing IRS/house sale saga.  Nightmare.  But have come away with new information that if true, makes me question part of our raison d’etre for being here:

1. The reinvestment of any capital gains HAS to take into account the value of the property WHEN YOU BOUGHT IT.    So the money we got from our house sale in Nov 2007, the value of which was €100k+, has to be ALL invested into a new property. Ouch!

2. You can either reinvest in a new property OR in works to that property. Not both.  No wonder there’s so many abandoned houses in Portugal.

3. You have 3 years in which to get rid of any money you may have put by for your old age!

So, from what I understand, there’s no incentive to downsize, there’s definitely no incentive to invest in older properties/ruins and using property to try and build a nest egg is futile here!  There’s no way you can buy when the market’s low and sell when it’s high without some opportune help from your accountant (we need one of these!)

I don’t want to have to think about buying bigger and bigger properties until I die, I have no desire to clean them for a start.  I wonder what you do if you’re single (by choice or divorce or death)?  Suppose you had a big 4 bed place, wanted to sell to move to a 2 bed flat, what do you do with any gain on a sale?  Get taxed on it?  Lordy!

I’m now thinking that €3k+ kitchen I was after isn’t such a bad investment after all!