The Non-Habitual Residency status in Portugal brings opportunities with its attractive tax-break schemes.
The Portuguese Non-Habitual Residency (NHR) status allows individuals who become tax residents in Portugal and are accepted under NHR terms to receive tax exemptions on qualifying income in both Portugal and the country where the income is sourced. This regime represents a significant advancement in making Portugal a tax-free jurisdiction for individuals receiving qualifying non-resident income, including pensions, dividends, royalties, and interest. NHR status allows individuals to live in Portugal for a mandatory minimum of 183 days per year and either pay no tax if they are a retired person with a private pension or pay a flat tax rate of 20% if they have income from a high-value profession.
To qualify for NHR status, an individual must not have been a resident in Portugal in the previous 5 years. Upon acceptance into the program, individuals will qualify for all tax breaks and conditions for a period of 10 years, with tax-free pensions from outside of Portugal, a 20% tax rate on earnings in Portugal for workers in high-value professions, and a significantly reduced rate on any income earned outside of the country. The tax rate on foreign income earned outside of Portugal depends on the tax agreements in place and varies based on the country where the income is earned. Our tax experts can provide financial advice to help you maximize the potential savings from this opportunity.
If you're considering relocating to Portugal and exploring the NHR program, it's essential to understand the various types of visas available to expatriates. For a comprehensive guide on different visa options and requirements, you can also read our blog post on 'Navigating Visa Options in Portugal’ to help you make informed decisions about your move to this beautiful country.
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