NHR: Our Opinion
Without the NHR tax regime, is a relocation to Portugal still appealing?
The Non-habitual resident (NHR) tax regime is one of the many reasons why expats, investors, and others were considering a move to Portugal. This program was meant to attract those people who are working in Portugal upon relocation and/or still working for a company outside of Portugal but living in Portugal.
In a nutshell:
It was an exemption or tax reduction from almost all foreign sourced income
NHR program lasted for up to 10 years
Some Portuguese sourced income is also taxed at a low 20% flat rate
Incentivized for entrepreneurs and self employed freelancers but also executive/corporate employees
Program is slated to end in 2024, official date not known yet.
However, here’s where we felt the program didn’t live up to expectations:
Missed tax revenues was an opportunity cost to the Portuguese economy
Missed chance to help with needed infrastructure upgrades across the country
Some occupations were prioritized over others in this program. They were mostly professional or executive in titles, such as architects and consultants etc. The people who may have needed this tax relief the least compared to the rest of the Portuguese population.
From our perspective, we would love to see the government bring in a more balanced incentive to still maintain benefits for relocation to Portugal but can also benefit the local economy and local salaries. We are optimistic there will be other programs to attract expats and hope that it will be more balanced for everyone.
So to answer the question about whether Portugal is still worth the relocation, the answer we have is a resounding YES. There are still many reasons to move or buy in Portugal as it is a beautiful country to spend time in with your family or to live during your golden years. However, nothing starts without a NIF and a bank account so take all these changes in stride, be prepared and make your move. So if you are ready to start, then let us help you get started at www.easystarteurope.com.
Até já,
Mia and Rafael
