If you’re interested in buying a property in Portugal, you might be familiar with the Non-Habitual Residency (NHR) scheme. Launched in 2009, the tax scheme allowed those who become tax residents in Portugal (anyone spending over 183 days in the country) to benefit from a special 20% tax rate on Portuguese-sourced income and exemption on most foreign-sourced income for 10 years.

The NHR scheme was introduced to make the country more appealing to qualifying entrepreneurs, professionals, retirees and high-net-worth individuals as Portugal looked to recover from the financial crisis.

However, in October 2023, prime minister Antonio Costa shared plans to close the scheme by the end of the year.

 

Why is it ending?

The NHR scheme has been extremely popular with international buyers, so much so that Portuguese locals are being priced out of the housing market and it has properties are becoming unaffordable to many across Portugal.

 

Can I still benefit from the NHR scheme?

Yes and No. While the NHR program will end, the window is open for you to act if but only if you became a tax resident before December 31, 2023.

The Socialist Party was behind the decision to extend the deadline, saying it was important to “safeguard the legitimate expectations of people who have already made the decision to immigrate or return to Portugal.”

 

How will this affect me?

If you’ve already been granted NHR status, there will be no change to your circumstances. Your NHR status will remain in place for 10 years.

If you had obtained NHR status before the law came into force, there would be no change to your circumstances. Your NHR status will remain in place for 10 years.

If you acquired tax residency or a residence permit in Portugal before December 31^, 2023, the deadline to request NHR status is March 31, 2024.

Those wishing to gain tax residence in Portugal in 2024 can no longer benefit from the NHR program.

 

What are my other options?

If you want to live in Portugal, luckily there are other residency pathways available. They include:

– Golden visa: Residency by investment via:

• capital transfers of over €500,000
• Investment or donation in the arts or reconstruction of national heritage of at least €250,000.
• Scientific research of at least €500,000
• Creation of 10 jobs
• Share and capital job creation with an investment of €500,000.

– D3 visa for skilled workers.

– D7 visa for individuals with a passive income.

 

For more information on the visas available, download our Portugal Buying Guide.

If you are considering an overseas property purchase, whether for lifestyle or investment, opening a no-obligation account with FCA-authorised Smart Currency Exchange will enable you to benefit from their competitive exchange rates and specialist currency knowledge, ultimately saving you money and time. For more information, download Smart Currency Exchange’s free report or visit the Currency Zone.

 

Written by PropertyGuides for Rightmove