The End of Portugal's Non-Habitual Residence (NHR) Program Announced

Residencies & citizenships Portugal Golden Visa šŸ‡µšŸ‡¹
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353

Hello all, I made this same comment in the other NHR thread but repeating here in case it is useful.

I was granted NHR status as of yesterday. I own a house in Portugal (bought in summer ā€˜23) and have completed my biometrics appointment, but have not yet received my physical residence card. I havenā€™t 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.

So for those of you physically outside of Portugal it does indeed seem to be possible.

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354

If I follow, the thinking goes like this. PT doesnā€™t have anything like IRAs or 401ks, so the effort is to match it to something it is most like. For a US citizen, matching it as a regular investment account may not be good, as you are taxed in PT while funds are in account with no corresponding credit, and then taxed in US without a corresponding credit in PT. Certainly when NHR runs out and dividends and interest are taxed at up to 48%, that is disadvantageous.

But PT does have supplemental pensions where pre-tax income goes in, is not taxed as either capital gains or interest and dividends while in the account, but taxed as a pension when it is withdrawn. So the thinking is that 401Ks and IRAs are more like that and should be taxed like that. That aligns with the US tax treatment. I donā€™t have any idea how the UK treatment works.

Definitely an area to be creating a 10 or 20 year plan with your tax advisor.

EDIT: Also, different situation for Roth IRAs, which as I understand it are still being debated.

355

Thatā€™s interesting. Thank you for going into the detail. Iā€™ll check out the supplemental pensions with my accountants and see what they say about applying it to a foreign tax-efficient pension vehicle.

Youā€™re 100% correct that a 10 and 20 year plan created with a Portuguese tax advisor is the correct thing to do.

Ultimately, maybe the Portuguese tax office itself doesnā€™t have a clear blueprint for how it expects foreign tax-efficient vehicles to be taxed when declared in Portugal. These things are easier if youā€™re not American because the UK will not continue to tax me on any external income or capital gains the moment I cease to be tax resident in my country of birth. In fact, this moment was 12 years ago when I left to work in Asia. I have submitted a tax return each year but only for UK rental income which is declared and taxed locally. Now Iā€™ve sold that house I can stop filing a return in the UK for anything so my only concern will be Portuguese tax under NHR for the next ten years hence my desire to engineer my ETFs to give me enough income to live off (tax free) while the rest of my capital grows before I move there. And then in ten years time I work out whether capital gains or income tax is the most efficient. But Iā€™ll be closer to the grave then and wonā€™t care so much.

Thanks again for highlighting something that my accountants have not.

356

Hi all, really appreciating the helpful posts here! Iā€™d love some advice. Iā€™m a UK national and my fiance is Portuguese. She is pregnant and we are planning to move to Portugal in the first half of 2024 to be closer to her family. Weā€™d both love to benefit from the NHR (she has been outside Portugal for over 10 years).
Questions:

  1. is applying for tax residency by 31 Dec the first step? It seems this allows us to then apply for NHR by 31 March
  2. What else do we need to do? Sign a lease by 31 Dec?
  3. is there anything additional to do (or other options) given my fiance is Portuguese (and be 31 March weā€™ll be married)?
    Many thanks for any help here!
357

Hi folks,
Iā€™m a tax resident with NHR. Unfortunately, my employer has changed their decision and I need to move back to Germany. Could anyone provide advice on how to remove Portuguese tax residency?

358

I bet you just follow the same instructions from Bordr but in reverse!

359

Would love some clarity on this too. An accountant I spoke to, claims that ā€œwe still need to apply by 31st Dec as the transition period only applies to those who started the process before Dec 31, but have NOT received a card,ā€ and hence I wont be eligible for the transition period. But then he adds the caveat that ā€œhe is not a lawyerā€ so he cannot be certain of this interpretation.

As per my post earlier, I intend to move to Portugal in Mar next year, and got my Residence card in June this year. I would love to apply after I move there, so I am fully above board, but I would like to know if that option would still be open to me, without needing to take any action before Dec 31?

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360

The legal guidance you require can only be obtained from the text of the 2024 Budget legislation passed by the Parliament at the end of November. This is freely available on the Portuguese Parliament web site which I linked to earlier in this thread. Beware of interpretations of this text from people who stand to take money from you today.

The text does not mention anything to do with the issuance of residence cards. It only refers to a residency process started before 31 December 2023. This text appears to cover your scenario. Read the text and see if you think it covers your scenario. You will have as good an interpretation as anyone - professional or otherwise - in Portugal at this stage.

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361

Hi everyone. Below this paragraph is a quote I copied from a portion of an email I just received from our Golden Visa lawyer moments ago. Hereā€™s our back story to put everything in context. My husband and I applied for our Golden Visas in late December 2021, we had our biometrics in Lisbon this past June and July, and we are waiting for our residency cards. With all the delays, and the upcoming US elections next November, we have decided to move to Portugal next October, regardless of the circumstances. If we move to Portugal without our residence cards, and donā€™t receive our cards shortly after moving to Portugal, we will be taking the AMIA and the Ministry of the Interior to court. Our lawyer has been successfully winning cases against the AMIA and Ministry of the Interior. The quote below from our lawyer also gives us hope that we can apply for NHR late next year, and our potential legal action might help us with that effort. I hope this information is helpful for others in a similar situation. I apologize if any of this has already been addressed.

:arrow_right: A transition regime in 2024 aimed at potential candidates for the NHR program as long as they are eligible to obtain tax residency by the end of 2024 and meet one of the following conditions:

:one: By 31.12.2023, meet the conditions to qualify as a resident for tax purposes in Portuguese territory,:
a) Permanence ā‰„ 183 days, consecutive or interpolated;
b) If stayed for a shorter period, having, on 31.12.2023, a house in conditions that suggest intention to maintain and occupy it as their habitual residence;
c) On 31.12.2023, are crew members of ships or aircraft, as long as they are in the service;
d) Carry out public functions or commissions abroad, at the service of the Portuguese State.

:two: By 31.12.2024, are registered as NHR and declare that they have one of the following elements:
a) Promise or employment contract, promise or secondment agreement signed by 31.12.2023, whose duties must take place in national territory; or,
b) Lease contract or other contract granting the use or possession of property in Portuguese territory concluded until 10.10.2023; or,
c) Reservation contract or promissory contract for the acquisition of real rights over property in Portuguese territory concluded by 10.10.2023; or,
d) Enrollment or registration for dependents, at an educational establishment domiciled in Portuguese territory, completed by 10.10.2023; or,
e) Residence visa or residence permit valid until 31.12.2023; or,
f) Procedure, initiated by 31.12.2023, for granting a residence visa or residence permit, with the competent authorities.

:three: Be a family member of the taxpayers referred in the previous paragraphs.

In your case, I would say that you can still benefit from the NHR in 2024 by the subparagph f) above, because you are still waiting to recieve your residence card from the competent public entities.

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362

Hello.

Iā€™m 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 NHR 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?

363

This morning I just set up an appointment for a long stay visa through the official partner online, vfs global , and have a confirmed appointment for April 1, 2024.
Since the date of this appointment request confirmation letter that I received from them is December 30,
And Together with the deed to the property that I acquired in September, 2023 ( before the Oct 10 deadline) , - Will these two documents, ensure that I am under the transition rules qualified to make an application for NHR in 2024, to the best of your collective knowledge?

Your thoughts are appreciated. Thank you. :pray::grinning:

364

I donā€™t think we really know anything for certain. Like many things about this process, things are up in the air until the last minute. In my completely amateur opinion, I believe having the deed to the property and proof of having initiated a visa process in 2023 would suffice.

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366

Hello David

Did you manage to update your NIF address and apply for NHR in 2024 without any issues?

Regards

367

Hi,

No, I have delayed my plans to move to Portugal, and will only move around end of April, so decided to look into it, once I get there.

Thanks

368

Apologies if someoneā€™s already posted this, but I couldnā€™t find mention of itā€¦

Iā€™m sure frequent readers of this forum will be shocked, shocked to learn of this SNAFU :roll_eyes:

the tax authorities are automatically refusing all [NHR] requests from foreign workers and pensioners who want to come to Portugal, this yearā€¦

Only then, ā€œin the notification to candidates, does the Tax Authority (AT) ask them to present proof, documents showing how, until the end of 2023, they were eligible to benefit from the regime, such as employment contracts, enrolment of children in Portuguese schools or contracts promising to purchase a houseā€ā€¦

Not having the means to apply this transitional regime, the AT decided to reject all applications in advanceā€¦

ā€¦could lead to considerable delays in approving applications. ā€œA few months ago, AT was still evaluating requests for 2022ā€

369

Indeed shocked, shocked. :roll_eyes:

*Insert computer says no meme here.*

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Update on this from our advisorsā€¦ they figure ā€œbecause you bought a property in Portugal before October 10, 2023, the system would automatically validate that you fell under the transitional [NHR] regime.ā€

As with many of you, I havenā€™t yet been granted a PT residence permit in order to test this :frowning_face:

Anybody who has got their residency in 2024 and tried for NHR under the transitional rules - please let us know how it went!

Also attaching ATā€™s bulletin about this. Note that if you become tax-resident in 2024, even if you register for NHR after the normal deadline of 31-March the following year (2025) the 10-year countdown still starts from 2024.
NHR transitional regime - Oficio_circulado_90068_2024-2.pdf (236.3 KB)

372

I believe I said this a while ago in the thread, but my accountant was able to get me Portuguese tax residency and the NHR on the basis of my home ownership in Lisbon, even though Iā€™m not living in Portugal (yet). If anyone is in this scenario and plans to live in PT in the future, itā€™s worth engaging an accountant to do this now, so you donā€™t run up against denials down the road.

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373

How are you dealing with the fact of having multiple tax residencies? Seems like a lot of scenarios for being at risk of double taxation. Iā€™ve mentioned it to two tax accountants (outside Portugal) so far, and it kinda made their heads spin. So I havenā€™t gotten a clear sense of this yet. (My case is I live in the Netherlands and might want to move to Portugal some time in the next few years, so it was tempting to secure NHR now while itā€™s still possible.)