Living in Portugal comes with many advantages, like good weather almost all year round, the delicious and healthy Mediterranean cuisine and lifestyle, welcoming people, security and an overall quality of life. In addition, we should also mention the less romantic, or more practical facts, being the fiscal benefits of investing in Portuguese real estate
In 2009, Portugal introduced a range of tax benefits for both EU and non-EU citizens, which made obtaining residence quick, easy, and financially lucrative. The aim was to encourage direct foreign investment and thus help get the economy back on its feet after the Global Financial Crisis. It worked, and investors from all over the world are coming to Portugal.
Portugal offers a selection of attractive advantages for those choosing to invest in property, with favourable tax regulations like the principle of Non Habitual Residents (NHR).
This regulation allows for tax exemption on almost all income from foreign sources and a flat income tax rate of 20% on the majority of revenue sources, such as salaries. Some other advantages of this special tax regime include tax exemptions on retirement income, inheritance, capital gains income and on dividends and interests.
The NHR is available to all individuals becoming tax residents in Portugal (if they were not a Portuguese resident in the last 5 years) and the status is granted for a period of 10 consecutive years. To be considered a tax resident, one should stay in Portugal for more than 183 days during the relevant fiscal year or have a dwelling in Portugal on December 31 of that year with the intention to hold it as his or her main residence.