Portugal will end special tax regime for new residents in 2024

What has  happened? In an interview with CNN, Portuguese Prime Minister Costa has announced the abolition of the special tax regime for new residents “Non Habitual Residence” (NHR)from 2024.

In July 2023, 89 thousand foreigners used this benefit.

What is the essence of the NHR: 

• New residents pay a set 20% tax on income received in Portugal for 10 years.
• Income from abroad is generally exempt, except for pensions, which are taxed at a rate of 10%.

For comparison: ordinary Portuguese have to pay on a progressive scale - from 14% to 48%.

Why is it important? NHR status is popular with expats and digital nomads, who travel to Portugal by the thousands. As a result, the demand is growing, and the housing prices grow upwards.

The reasons. In House prices in Portugal recorded the fourth highest increase (8.7%) in the European Union in the second quarter of 2023, according to the latest numbers from Eurostat. It is becoming increasingly difficult for locals to purchase and rent real estate, which is heating up the social situation. And it forces politicians to take similar measures.

For now the Portuguese Parliament has re-approved the law to abolish golden visas for real estate investments.

Source: Euronews

Photo by Aayush Gupta on Unsplash

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