Non-habitual resident status Portugal 2024
2024 Update: The 2024 State Budget has suspended new applications for Non-Habitual Resident (NHR) status. However, individuals who have already applied can benefit from a provisional measure allowing the completion of their ongoing process. Those who initiated their immigration process before December 31st, 2023, may apply for NHR status by March 31st, 2025, based on the 2024 regulations, and enjoy the regime’s benefits for 10 years under previously specified conditions.
The government has outlined a list of professions in innovation and scientific research sectors eligible for a special Income Tax (IRS) scheme in subsequent years. However, following the March 2024 elections, the status may be subject to further review by the incoming government. GuestReady will compile a document detailing the final amendments, updating this article as soon as new information becomes available.
Below, you’ll find our article on the NHR status, along with our recommended specialist’s contact details to address any queries regarding this process.
Portugal has always been a country of choice for foreign families, remote workers, and retirees looking for a place in the sun in southern Europe.
Known for its gastronomy, hospitality, and amazing beaches – which are already reasons enough to justify a move – Portugal also offers tax benefits to foreigners moving to the country, and to those who, being Portuguese citizens, have resided abroad in the last 5 years.
New tax residents, who acquire the Non-Habitual Resident Status (NHR), benefit from a special IRS rate of 20% for 10 years, under specific conditions.
Table of Contents:
1. What is Non-Habitual Resident Status?
2. Who is eligible and who qualifies as a Non-Habitual Resident?
3. How to obtain NHR status in Portugal?
4. When to apply for NHR status in Portugal?
5. What are the tax exemptions and benefits in Portugal?
6. How long does the NHR status last?
7. How can GuestReady help me with moving to Portugal?
Last update: October 2023
The this special tax status is currently pending renewal for 2024 as part of the 2024 Portuguese State Budget initiatives. This article will be updated in case the Portuguese Government decides to leave the program as is, or whether the Portuguese Government decides to cancel it starting in 2024, in which case we will explain what program will replace it and under which conditions.
For now, the NHR status has not been changed, and the information in this article is still valid for the current and future years.
1. What is the Non-Habitual Resident Status?
NHR is a special tax regime that offers personal income tax (PIT) exemptions or reduction to new foreign residents or Portuguese citizens who have been emigrated for more than 5 years, on income from skilled work, passive income, and pensions, under specific conditions.
The NHR regime was launched in 2009 by the Investment Tax Code (Decree-Law 249/2009 of September 23) to attract qualified professionals and pensioners with purchasing power, being currently regulated by the PIT Code.
Alteration to the Non-Habitual Resident Status
Note that in 2020, the Non-habitual resident status underwent a minor change – pensioners who were previously exempt from taxation will now have their pensions taxed at 10%.
2. Who is eligible and can qualify as NHR?
To be eligible and qualify as an NHR you will have to fulfill 3 requirements:
- Not have resided in Portugal for the last 5 years;
- Obtain fiscal residency in Portugal, either through the purchase or rental of property;
- Register as an NHR with the Tax and Customs Authority (AT);
3. How to obtain NHR status in Portugal?
To become a tax resident in Portugal under Portuguese law, you must:
- Stay in Portugal for more than 183 days;
or - Have available housing in a condition that is assumed to become your usual residence. You can proceed with the purchase of a property, however, renting is a possible solution to ensure fiscal residence.
4. When to apply for NHR status in Portugal
The attribution of the Non-habitual resident status must be achieved at the time you register as a resident in Portuguese territory, directly on the website portaldasfinanças.gov.pt, or until March 31st of the following year in which you register as a resident in the country.
5. What are the tax exemptions and benefits in Portugal?
- No wealth tax in Portugal and exemption from declaring any assets to the Portuguese tax authorities (income only);
- Inheritances and donations, between ascendants and descendants (ex: father to son, or grandfather to grandson, or son to mother ) and husband and wife, are tax exempt. Other inheritances and donations (such as uncle to nephew or unrelated persons) are taxed at a flat rate of 10% on assets located in Portugal (other assets will not be subject to tax);
- For citizens of countries that are not members of the EU or the Schengen area, Portugal approved in 2012 the Golden Visa program;
- National citizens can benefit from the regime, which makes it particularly attractive for Portuguese emigrants;
6. How long does NHR status last?
Once obtained, NHR status lasts for 10 years from the year of first tax residence in Portugal.
List of high added value activities in the NHR
In 2019, a new list of high value-added activities was introduced, and it became effective in 2020.
I – Professional activities (codes of the Portuguese Classification of Professions – CPP):
112 – General Director and executive manager, of companies;
12 – Directors of administrative and commercial services;
13 – Directors of production and specialized services;
14 – Directors of hotels, restaurants, commerce, and other services;
21 – Specialists in physical sciences, mathematics, engineering, and related techniques;
221 – Doctors;
2261 – Dentists and stomatologists;
231 – University and higher education teachers;
25 – Specialists in information and communication technologies (ICT);
264 – Authors, journalists, and linguists;
265 – Creative and performing arts artists;
31 – Technicians and science and engineering professions, intermediate level;
35 – Information and communication technologies technicians;
61 – Market-oriented skilled agricultural and animal production workers;
62 – Market-oriented skilled forestry, fishery, and hunting workers;
7 – Skilled industrial, construction, and crafts workers, including particularly skilled metalworkers, metalworkers, food processing, woodworkers, garment workers, handicraft workers, printing workers, precision instrument makers, jewelers, craftsmen, electrical and electronics workers;
8 – Plant and machine operators and assembly workers, in particular, fixed plant and machine operators;
II – Other professional activities:
- Directors and managers of companies promoting productive investment provided that they are assigned to eligible projects and have contracts for granting tax benefits concluded under the Investment Tax Code, approved by Decree-Law No. 162/2014, on October 31;
- Activities excluded from the NHR;
- Activities such as auditors, tax consultants, psychologists, and archaeologists are no longer on the list;
- Professionals who applied for the status until December 31st, 2019, may still benefit from reduced taxation in case of performing an activity stated in the previous list of high-value-added activities;
In this article, we’ve asked Lisbon-based tax lawyer Rita Botelho Moniz to shed some light on the frequent questions we (and she) receive about the Portuguese tax system and more specifically the NHR regime.
7. How can GuestReady help me?
At GuestReady, we are in contact with people who have chosen Portugal to set their primary home address daily and have the need to sometime in our portfolio of furnished apartments as a temporary residence before they find their dream homes.
Making a quick decision about buying or renting a property for the long term can have negative consequences. By taking the time to explore the area of interest and the surrounding areas, you can ensure that you make a good decision.
GuestReady is available to help you find a property for you and your family. We guarantee your maximum comfort while looking for the ideal property for a prosperous long-term investment. Our properties in Lisbon, Porto, Braga, Setúbal, and the Algarve are fully furnished and ready to welcome you.
We rely on our partners to provide you with the best possible assistance in legal and fiscal matters. If you have more questions, feel free to contact Rita Botelho Moniz directly via Linkedin or email, who will be happy to assist you.
