Iām in a similar situation (not pre-approved) and successfully received my NHR certificate in 2022 so I hope you will too.
Regarding the right to live in PT, I assume you applied in 2021, then you should have that right already, refer here for more information
If the state has a high income, tax, like California or New York, and you reside in Portugal, you wonāt pay the state tax anymore
Thatās a very loose approximation of the rules. I cringe to think of anyone reducing it to āhey I landed in Portugal, Iām done with the Franchise Tax Board forever!ā, and thus embarking down the class 6 cataract of self-inflicted tax hurt.
Hereās the first link I found with a 2 second web search; it checks out at first glance:
For the neutron star of tax obligations named California, here are the specific guidelines:
I am going to wait until the budget passes and then rent a place in PT to get the NHR this year. My wife and I have had my GV for a couple of years now, so not an issue.
Always a good idea to move out of California first. Preferably, move from CA to OR then to NV. If CA sees you move straight to a low tax state, they will be paying attention and potentially claiming you didnt really move, or that some of your money is still theirs somehowā¦I would probably time it so that I did a quick move to OR right before taxes are filed, so that CA sees me in OR. Then I could leave immediately for NV, and then the world!
(This is not tax dodging advice. This is advice for avoiding taxes you shouldnt owe.)
Kristen,
I too live in Portugal, with pre-approval in 2022 and biometrics in Lisbon in January 2023. I also do not have my card yet, but I had a title to the property I bought. With this title in hand, I went to local Freguesia (Santo Antonio for me), showed them my passport, paid them 7.25ā¬, and received an Atestado da ResidĆŖncia in about four days after declaring that I lived at that address for about 8 months. This certificate was enough for FinanƧas to change my residency address to Portugal (both NIF and Tax residency). The next day, through a simple on-line form on FinanƧas portal, I was granted NHR status.
Three days later, we did the same for my wife. It was really that simple.
Also, if you are going to FinanƧas in Lisbon, consider going to FinanƧas 7 on Rua Tascoa 16: much better service and far fewer people.
Try again and good luck.
I brought all of those documents as well. Maybe they are just cracking down on it now. We were advised by our lawyer, accountant and AFPOP that they also would not grant us tax residency without visa approval.
Thatās bizarre. It seemed to me they were quite eager to get a couple of extra taxpayers added to the system. Maybe you could try again at a different FinanƧas office ?
A couple of options here:
Hello all, just chiming in with an update as promised. I was granted NHR status as of yesterday. I own a house in Portugal (bought in summer ā23) and have completed my biometrics appointment, but have not yet received my physical residence card. I havenāt actually moved to Portugal yet but plan to in the spring.
My accountant was somehow able to convince FinanƧas to grant me tax residency and NHR on this basis, with the combination of the deed to my house and the proof of attendance document that SEF issues after biometrics stating that you showed up to the appointment.
Great news!
Hello.
Iām hoping for some advice here, I purchased my Lisbon condo in September 2023, and I am in the process of furnishing it. I live in Los Angeles, and was wanting to apply for an HR but I have no residence permit nor an application for one yet and it is already the end of December based on my ownership of my condo in September before the cut off date will I still be able to qualify for the original NHR regime?
I am also worried about the tax implications on my US tax return to get the NHR and be taxed as resident for both countries ?
Hi Aliray, any change in your situation since this post?
I just came across this thread. I actually obtained legal advice on the question of US citizens who are NHRs of Portugal and want to rely on US stock sales for income, which is relevant to some of the comments above.
I was advised that Portugalās electronic tax filing system is not set up to recognize a CGT deduction on US stock sales for NHRs who are US citizens. And you can only submit your taxes through this system. If you sell stock in the US, you will have to pay the full CGT rate in Portugal (28% on top of the 20% LTCG you already paid in the US), then go to court to appeal your tax bill, presuming you win the court will issue a notice that you submit to the tax authorities so that they can issue a new tax assessment deducting your US tax paid. All up, it can take over a year to get your money back and has a lot of administrative costs.
I wish I was making this up.
Huh? Capital gains are supposed to be taxed at a flat 28% unless itās real estateā¦
No youāre right. My typo corrected. But it effectively becomes 48% because you cannot deduct the 20% LTCG you pay in the US until you go through the court process. The Portuguese tax office has pursued a very narrow interpretation of language in the double tax treaty and is only relenting when forced to by court rulings.
First I am not an accountant. My understanding is that as a PT tax resident, you pay PT first. You then get to deduct what you pay from your American tax. Under NHR, it is supposed to be taxed at source and 0% for Financias. Financias disagrees so you have to find an accountant that will work with you otherwise you pay the 28% and then get the US credit.
Thatās interesting. As you say, under the NHR program Portugal should then levy 0% but the issue is their electronic tax submission form has not been set up to recognize US stocks that way.
This summary is from an article I just came across: āEven if the taxpayer rightfully claims an exemption from capital gains, the automated calculation will not acknowledge it and will produce a tax assessment that includes full taxation on the gains. This leaves the taxpayer to choose between three bad choices: (1) pay the tax even through it isnāt due (2) choose different category and submit a wrong return (3) submit a correct return and dispute the wrong outcome.ā
And the point lawyers made to me is that option 3 can take 1-2 years through the courts, during which time you still have to pay 28% to Portugal. Maybe some accountants will try fudge the filing but I think that brings risks.
Elsewhere ā¦ āCapital gains is also a murky area in Portugal taxation as it relates to U.S. citizens. There is a non-binding tax ruling that states they are exempt from taxation in Portugal because they are subject to taxes in the U.S. (and therefore exempt under the double taxation agreement). Portugal doesnāt recognize the tax ruling and will still charge the 28% cap gains tax. People who contest the taxation under the DTA have been successful, but you will typically be assessed the taxes first.ā
If the online filing is broken, is there no option to file paper forms as a fallback?
No news. We gave up and now still waiting on residency. Lawsuit filed.
I had the same question and was told no, there is no paper filing option, you have to use the electronic system.