The END of NHR in Portugal?

There have been recent concerns regarding the NHR (Non-Habitual Resident) tax regime in Portugal. The Portuguese Prime Minister, Antonio Costa, mentioned in an interview that the NHR might be coming to an end, causing panic among potential expats and those interested in Portugal. The NHR is not a permanent tax status, and for some may not be worth being concerned, however others may find this could significantly impact their interest in Portugal. The current NHR regime offers an advantageous tax rate for a period of 10 years. While it benefits some, others might find the "regular" Portuguese tax regime more favorable. In this moving to Portugal expat podcast episode of Not Your Average Globetrotter hosted by Rafael Di Furia, we'll look at what to take into consideration with the NHR and these new considerations...

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#movingabroad #expatlife #livinginportugal

[manzahalem]

Regardless of whether the NHR tax regime is “fair” or not it would be ignorant to think that the removal of it won’t impact people’s decision to relocate to Portugal. Of course it will.

[livingworkingoutsidebox]

Thanks for talking about this.

6:43 Having a 5 to 10 year window to see how the country develops as a home.

9:44 not a good argument. Did you kinda say if you are retiring and aging out that enjoying the much lower taxes thise 10 years will give you a shock when you're hit with the bigger tax rates? Might as well have paid those taxes right in the beginning? 😮

We are talking about 10 years say it only saved a person 5-10k a year thats 50k-100k ! 💰

Plus if you are at that older retired age your income is most likely dropping. A good accountant even just on the Portugal side will help decrease that tax burden to the aging out person. 👍🤔

I understand how there are those regular Portuguese people who look at these programs and get upset or more so jealous 🤔 they fail to see all those extra funds that go directly into the local economy and not into the political bureaucracy.👍🎯

[ForeignAffair]

Thank you for this update, for online business owners what do you think is the best option, Sociedade pessoal por quotas or ENI? those would be a good or even better options instead of the NHR, but I'm not sure which one yet.... I want to set up an online business here, any resources or links that you know about that?

[imirim]

This is an excellent video. My wife and I will be submitting for our VFS appointment soon to be held in a few months, so we are at the beginning ( we have our NIFs and Portuguese bank account). The announcement on NHR came ironically on the day we returned from a month long trip to Portugal. It's been on my list to consume as much info as possible on this topic but I have been dreading it. I was glad that your video here was the first one I have viewed on the topic. Very balanced (I agree - important to consider the good and the bad - if you want plenty of bad - look no further than the news stories in The Portugal Resident publication). We are meeting with our tax consultant soon and until then I am not panicking. Thanks for your thoughtful video

[josehernandez]

Those most affected over time will be the Portuguese people. The NHR provided more disposable income for immigrants that could be spent in Portugal. Therefore providing more tax revenue for the government and JOBS for the Portuguese people. Note that there are other countries that have similar programs: You know that Italy has a 7% flat tax for retirees.

[scottmacconnell]

I have a problem with clarity of the impact. Trying to get info always leads to the NHR and it is hard to differentiate that from other rules. It is hard for example to see if the no double taxation is a general rule or part of the NHR. Also, Portugal taxes pensions which are different than 401k, IRA, Roth etc. but often they are conflated. It would be truly awful to having $100, 000 taxed at 24% in the US then another 48% in Portugal leaving only $40, 000. I have also heard that either way these taxes are a right off in both countries. I look forward to someone giving a true picture of the impact. However thanks for your take. I do have to agree the 10 year temporary scheme was a bigger deal then you portray especially for retirees. Protecting the principle and compounding is important particularly in the beginning.

[Solrac-Siul]

Just for full clarification the EU itself is looking into the NHR and similar systems in spain, italy, Greece and cyprus. The portuguese government is being pressured by one side the portuguese population and on the other side the EU regulatory entities as tax regimes such as the NHR or alikes are being politically weaponized by multiple left and particularly populist right parties within Europe - to be fully fair the populist right is having a field day as they already have the traditional anti foreigner speech writen for years and just need to replace "blacks and muslins" with "americans", "social security" with "tax exemption regimes" and the classic " they are taking our jobs" with "they are increasing house costs".
In the near future NHR and similars systems will most likely be wiped out within the european space.

[PortugalDoor]

Brilliant and informative :)

Can't believe you live in Braga and we haven't met yet! But thank you for the video, a lot of our clients have been panicking about this and it's important to put things in perspective.

New subscriber ;)

[LeoHipolito]

I remember that you did not get the NHR because it did not benefit your business structure, but maybe now that it'll be eliminated, and housing will be more affordable, will lower rents hopefully in Braga.

[suebowman]

I have to pay taxes for American IRS and pay some taxes for Portugal. NHR may sound good but Americans have to pay taxes to the uncle SAM and pay taxes for Portugal. NHR doesn’t help my case.

[alexfoxx]

I’m confused. If I retire in Portugal in a few years and there is no NHR tax regime any longer, what will be the tax on my Social Security from the states (assuming it’s around $29, 000 and I have no other income)?

[brooksmagruder]

not sure if I heard your argument right that if you need NHR tax savings to squeak by, that when it expires you then can't squeak by, so therefore you shouldn't get ever NHR so you can't squeak by now or ever. better to not have that benefit now & save????

[Jacob-tpsw]

@7:13 so so so true. It is like there are 2 PRs, one on YouTube and one in reality. PR is a very poor country, and people are/look very depressed. The quality of service is awful, and the gov does not seem to follow its own laws.

[grizfan]

I think you hit the nail on the head when you mentioned how certain aspects of moving to Portugal have been over-hyped and over-sold. I think the NHR and taxes in general 100% falls into that category. I have seen so many comments this week from people who seem to think that NHR is the magical tax unicorn, and really haven't a clue how it actually works. I'm also really surprised how many people fail to understand how graduated income taxes work, too.
As you mentioned, there are many ways to determine your income tax rate here in Portugal, and yes, the NHR program does offer some good rates on certain types of income, but that isn't the only option. Book an hour with a Portuguese accountant that specializes in taxes for immigrants. Ask that person to model out a few different scenarios with and without NHR based on the type of income you expect to have when living in Portugal (retirement, salary, etc...) But also make sure to factor that into your plans for overall cost of living, including transportation, food, housing, health care, things like that. My property taxes in Portugal for the year are close to what we used to pay in a single month back in the US, for example. It is so easy to focus in on just one aspect, income tax, and lose sight of the complete picture.
If Portugal does stop accepting new applications into the NHR, that will deter some, but give how few people actually use the NHR, the overall impact to the Portuguese economy and housing market will be so small, you won't be able to notice, especially with everything else going on.

[tinglestingles]

I'll wait and see what actually gets passed into law. I'm a recipient of NHR and have seen some pandemonium online. I could see a big reduction in immigrants coming to Portugal, which is great for us here.

[craftbrewer]

the trendiness is over, now where is the next trendy place to move?

[willweiss]

And the best about PT is??? NO capital gains taxes on crypto if you hold longer than a year before cashing out. And NO capital gains trading crypto within Crypto at all. SO HAVEN!!!
Great points made though.

[jorgegomez]

If you love living in this country pay the same taxes as natives, otherwise, goodbye and good luck!

[DS-vxwf]

this was bound to happen.... many of these retirement 🤡 from the US and UK out there to exploit PT health care might move out. Portugal has one of the oldest populations in the world. (2nd oldest in Europe).