In the present earthquake engineering practice, the capacity spectrum method (CSM) is a widely used strategy for seismic performance evaluation of existing and new structures. This non-linear static approach is based on well known approximations (e.g. constant lateral simplified force distribution, fundamental elastic modes, etc.). Several authors have reported deficiencies of the general procedure: inaccurate deformation predictions and no convergence of iterative procedures given in design codes among others. Furthermore, besides these deficiencies, some aspects are usually ignored, such as the effect of the ratio of fundamental frequency of input signal and this one of the structure and the alteration of the seismic response of a structure due to the flexibility of its soil foundation (i.e. soil-foundation interaction effect). In this paper, results obtained by using finite element method (FE) to model the non-linear behaviour of both the structure and the soil foundation illustrate the shortcomings in the use of actual design codes. The fragility curves obtained, show that even though both FE and CSM give similar results for inexistent to low damage, the difference becomes non negligible for moderate damage levels.