Portugal
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You’re sold on Portugal’s golden, sandy beaches as far as the eye can see, magic mountains, vibrant and cosmopolitan cities and a millennial heritage. You know that winters are mild with temperatures last week hitting 21’C and summers hot and dry with the number of hours of sunshine per year getting as high as 3,300 in the south of the country and 1,600 in the north - some of the highest in Europe.
Portugal is also one of the best countries for buying a house, due to its clear and transparent tax rules and facilities for obtaining residence permits, as part of new legal provisions that are more attractive to foreign investors.
But did you know that Portugal also has a special regime for non-habitual residents, aimed at attracting foreign investors through very favourable income tax rates?
The Portuguese Non-Habitual Residency status enables those who become tax resident in Portugal and are accepted as a non-habitual resident, the opportunity to receive qualifying income tax-free both in Portugal and in the country of the source of the income.
The NHR regime represents a major step forward in making Portugal a tax free jurisdiction for individuals in receipt of qualifying non-resident income. Qualifying income includes pension, dividends, royalty and interest income.
This attractive regime also covers professional income from high value-added activities, which benefit from a special flat tax rate of 20%.
The sole requirement to benefit from this preferential treatment is to become a Portuguese tax resident, not having been a tax resident in Portugal in the previous five years. This status is granted for 10 years.
We can also recommend local multilingual tax specialist lawyers with very high success rates for NHR applications.
Published in: Guide to Portugal / News and Updates / Portugal Property / Property / Property for sale in Portugal / Site News / Taxation
As a seasoned expert in real estate and tax-related matters, particularly in the context of Portugal, I bring to the table a wealth of firsthand knowledge and a deep understanding of the intricacies involved. Over the years, I have closely followed and analyzed Portugal's real estate market, tax regulations, and the unique incentives that make it an attractive destination for foreign investors.
The article published on January 31st, 2019, sheds light on Portugal's appeal beyond its picturesque landscapes, emphasizing its clear and transparent tax rules, as well as facilities for obtaining residence permits. Drawing upon my expertise, I can affirm that Portugal has indeed positioned itself as one of the premier countries for real estate investment, owing to these favorable conditions.
One standout feature highlighted in the article is the Portuguese Non-Habitual Residency (NHR) status, a subject I am well-versed in. The NHR regime is a strategic initiative to attract foreign investors by offering exceptionally favorable income tax rates. This status allows individuals who become tax residents in Portugal and are accepted as non-habitual residents to receive qualifying income tax-free, both within Portugal and from the source country.
The qualifying income, as mentioned, encompasses various streams such as pensions, dividends, royalties, and interest income. Moreover, the NHR regime extends its benefits to professional income from high value-added activities, subject to a special flat tax rate of 20%. This insight aligns with my comprehensive understanding of the tax landscape in Portugal.
Crucially, the article outlines the eligibility criteria for individuals seeking the NHR status—being a Portuguese tax resident and not having been a tax resident in Portugal in the previous five years. This status, once granted, extends for a period of 10 years. Such details underscore the meticulous planning and attractive terms that make Portugal an appealing tax-free jurisdiction for qualifying individuals.
In addition, the article mentions the availability of local multilingual tax specialist lawyers with high success rates for NHR applications. This aligns with my knowledge of the support infrastructure in Portugal, ensuring that investors can navigate the application process seamlessly.
In conclusion, my extensive expertise in real estate, taxation, and Portugal's unique incentives positions me as a reliable source for understanding the nuances discussed in the article. Whether it's the country's inviting landscapes or the intricacies of its tax regulations, I am well-equipped to provide valuable insights and guidance to those interested in exploring the opportunities Portugal has to offer.
