NHR retirement strategy Portugal

Probably a common topic NHR Portugal

I am retiring to Portugal under NHR and buying a property with rental and dividends income from outside Portugal

Should I borrow ( offer of 1.1 % interest from bank outside Portugal) or use own capital ( lose possible appreciation of about 10%) or borrow in Portugal at 2.1% euroibor linked.

Pension will be paid from Spain to Portugal I guess with new tax rate of 10%

I pay for school of two kids , one in Portugal and one in Spain , would this be deductible?

My Wife is looking for some work opportunities but I don’t intend to work

Is there some website that clearly explains tax pros and cons of being an NHR?

Finanças determines if what is a pension in another country qualifies as a pension in Portugal. There’s no shortage of Americans in FB groups for American expats who get bent out of shape to learn that Portugal will tax the proceeds from selling shares in their ROTH IRAs. Those proceeds are not taxed in the US of A.

Education is deductible for the Portugal school. In Portugal your tax return tells the taxman about your income, they then use your NIF associated spending[1] to determine your deductions, then they tell you how much, if any, you owe.

[1]Spending outside of Portugal isn’t NIF associated.

“30% of the amount of expenses incurred in the education of any member of the household with a global limit of EUR 800 and with rented property, per member of the household aged 25 or under and who attends a recognised educational establishment located more than 50 km from the permanent residence of the household, with limit of EUR 300. If there are simultaneously these expenses, the limit is EUR 1,000 instead of EUR 800.”

That first sentence could be clearer. Seems to me the 300€ deduction applies only when the household member is living in a rental >50 km from the permanent residence.

I’ve never seen one that mentioned any cons except that the NHR tax incentives last only 10 years.

Hi Dan,

Thanks for the useful info quoted below; do you know if Portugal taxes Roth IRA profits under NHR at 10% or more? How about a regular tax-deferred IRA? I assume they are taxed as income as they would be in the US (10% cap under HR)?

Nope. There is no consensus on how ROTHs are taxed here. There is consensus that they’re not pensions.

My Portuguese tax preparer says income from selling shares of a traditional IRA are tax exempt in Portugal. That’s how he’s filed my taxes for the last 2 years.

Thanks, this info is much appreciated! I was planning to convert my IRA to Roth during the upcoming no-income years but now it seems that would be a bad idea as I’d be taxed twice on them.

excellent advice ,and thanks for the time and sharing , I omitted to mention that I have an a Irish passport

yes and it’s very hard to find much info on planning post 10 years to live tax efficiently if you want to stay