Portugal’s NHR Program - Act Now or Miss Out!

Portugal’s NHR Program - Act Now or Miss Out!

It's confirmed the NHR Programme ends on December 31, 2023. Eligible individuals should establish tax residency in Portugal before 31st December 2023 and submit their NHR applications by March 31, 2024, to secure the program’s benefits.

Establishing a tax residency can be done by renting or purchasing a property in Portugal, opening a bank account, or enrolling your children in Portuguese schools.

The next deadline to meet is the application deadline of March 31, 2024. The NHR program is complex, and it is important to have someone who understands the rules and can help you navigate the application process smoothly. Our advisers are here to help to ensure a smooth and successful application process. What happens now the closure of the NHR programme is confirmed?

Perhaps, the main question now is what are the benefits of this highly successful programme?

Benefits

The NHR Programme offers a range of tax benefits designed to attract foreign skilled professionals, entrepreneurs, and investors to Portugal and it consists of the following:

• Income tax reductions on foreign-sourced income

• Property tax reductions

• Visa-free access to the Schengen area

• Reduced inheritance and gift tax rates

• Faster processing of immigration applications

• Access to private medical care

Eligibility requirements

To be eligible for the NHR program, you must meet the following requirements:

• Be a non-resident of Portugal for at least five of the past six years

• Have no Portuguese tax residency for the past five years

• Establish tax residency in Portugal

• Be able to demonstrate a clear intention to live in Portugal

• Have a clean criminal record

Why should it remain?

Pushing to remove such a programme seems to many a self-destructive move. There’s even a ‘Technical Budget Support Unit’ that says that because the budget law has been approved in "generality," it goes against Article 167.

The stakes extend beyond the fate of the NHR regime; failure to approve the State Budget could sever Portugal's access to vital European funds from the Recovery and Resilience Plan. With the looming question of who will govern Portugal, a potential momentary galvanisation could happen, ensuring support for the budget law, and thus seeing the programme close.

Constitutionalists cry foul, accusing the President, who has generally opposed the bill, of disregarding the Constitution. Amidst a corruption scandal and a resigned Prime Minister under investigation, the government trudges forward, maintaining functionality as if untouched by the unfolding chaos. As Portugal celebrates 50 years of democratic rule, its institutions teeter on the brink of discredit, both domestically and internationally.

Before sealing the deal, a thorough due diligence process is indispensable. This includes meticulous property inspections, title examinations, environmental studies, a review of zoning regulations, and a deep dive into existing leases and potential liabilities.

NHR impact

Yet foreign buyers still want to relocate and or invest in property here. So is it all about the tax? No. Some clients don’t even know it exists before buying, like one of our own said in a recent article by the UK’s The Times newspaper. “Our move was about the lifestyle — we didn’t even know about the NHR when we chose Lisbon,” he said. “ When we heard about it after we had chosen Portugal, it was a nice bonus. But Lisbon is why we chose to buy a Portuguese property. The people are so friendly and welcoming, and there’s a vibrant and interesting group of international people here.”

Lisbon’s curve in the past decade has only made it, and Portugal as a whole, more alluring to foreign buyers. Putting aside the surf-before-work and sunshine, a bold approach to the entrepreneurial sector, increased exports and growing tourism have seen Portugal's economy grow steadily since 2011, with an average annual growth rate of around 2.5%.

Unemployment has fallen from a high of 17.5% in 2012 to 6.4% in 2022. Life expectancy in Portugal has also increased steadily, from 75.8 years in 2011 to 79.1 years in 2022. Tourism, which accounted for €18.3 billion in receipts in 2019, was back up to €21.1 billion in 2022 according to Banco de Portugal data.

During this period of uncertainty, one can't help but ponder the potential impact on the country's allure should the NHR program bid adieu. Will it dim its lustre, or just be one less ray of sunshine for a country that sees 300 days of sun per year?

What to do next?

If you're strongly considering entering the NHR programme to secure 10 years of highly tax-efficient residency, there are ways to enter the programme before it closes at the end of the year. Fill in the enquiry form below and we'll be in touch!