Press Release: Commission takes Portugal to Court over discriminatory rules on tax relief for capital gains from home sales

The European Commission decided on 13 January 2005 to refer Portugal to the European Court of Justice because Portugal had not amended its legislation according to which capital gains from home sales attracted tax relief only if the proceeds were reinvested in a Portuguese home. The Commission considered that the disallowance of tax relief where the proceeds are used to acquire homes in other Member States was contrary to EC Treaty rules, including those on the free movement of persons. Portugal had not responded satisfactorily to the Commission's formal request of July 2004 to change its law.