What has happened?
The NHR (Non-Habitual Residence) 10 year tax incentivised scheme to new residents will officially end from 1st January 2024.
NHR in Portugal is over
By Portugal team
This article is published on: 2nd December 2023
There is a new 10 year scheme introduced as a result of the 2024 Budget Law that offers benefits to select individuals. This is aimed at attracting those involved in the scientific research and innovation fields and will apply to those with roles in higher education and specific high value sectors.
Key points
Residency obtained after 1st January 2024
Those who obtain Portuguese residence after 1st January 2024 will not be able to apply for the NHR scheme unless you meet one of the transitional criteria below.
Those who cannot claim NHR status will be subject to the standard rates of Portuguese tax.
Transitional rules: applications open until 31st December 2024
Those who become resident in 2024 may still be able to apply for NHR if certain conditions are met. These are individuals with:
- A promise of employment or secondment, or a work contract before 31st December 2023 and where the work is performed in Portugal
- A contract in respect of purchase, lease or use of property in Portugal concluded before 10th October 2023
- A reservation or promissory contract over a property in Portugal before 10th October 2023 i.e. a `contrato-promessa de aquisição de direito real sobre imóvel`
- Enrolment or registration of dependants in education within Portugal before 10th October 2023
- A residence permit or visa obtained prior to 31st December 2023
- A residence or visa process registered with the relevant authority before 31st December 2023
Existing NHR individuals
Those with NHR already will continue to benefit from the scheme until the end of the 10 year period.
Final words
It is expected that there will a high volume of applications for NHR and for embassy appointments so if you can, take action now.
If you do miss the NHR boat, Portugal can still be a very tax efficient place to live however more careful planning will be needed both before and after your move.