Pay Less Tax on your Income and Pension when you own property in Portugal (NHR)

The Portuguese Non Habitual Resident regime (NHR) is aimed at attracting high level professionals to Portugal, who will pay a flat rate Tax of 20% on their salary or self-employed income. Pensioners also benefit by being exempt from taxes under this scheme.


Such individuals are exempt in Portugal from paying tax on their non-Portugal income of all categories, including pensions, self-employment, real estate, capital income and capital gains.

To qualify you cannot have been registered in Portugal as a tax resident in the preceding five years. Many individuals are not aware that they automatically registered as tax residents of Portugal if they applied for their fiscal numbers prior to 2002.. If your IMI property tax bill is sent to your Portuguese property address you are definitely registered as a resident and you should review this situation if you are in reality a non-resident of Portugal!

Special applications for the NHR must be submitted within a specific deadline after you have registered as a resident at the local Portuguese tax department, and from there on you must submit yearly tax returns in Portugal. You can then enjoy the benefits of being an NHR for the next ten years.

It should also be noted that any income earned in the 81 territories listed on the Finance Department list of preferential tax regimes – the so called blacklist would not qualify for this regime.

Notably, PwC mentioned Portugal as a well kept secret, in relation to the nation being a tax haven for property investors and emigrant home owners. See PwC terms of the NHR: http://www.pwc.pt/pt/fiscalidade/imagens/2012/PwC_RNH_2012.pdf

The right tax advice is essential to benefit from tax savings and most importantly to avoid falling foul of the Portuguese tax department! If you are interested, feel free to contact Portman Properties for further advise on Property and Tax

Posted on Friday, September 5, 2014

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