It was recently announced that the NHR tax regime for expats in Portugal will be abolished at the beginning of 2024. However, it appears there is still time for those looking to move to Portugal — the expat tax incentive program is likely to be extended for another year. 

On November 7, 2023, Portuguese Prime Minister António Costa resigned due to a corruption scandal. As reported by Imidaily, such an event will directly affect the operation of the NHR tax program for expats. According to lawyers, the NHR tax regime, which was previously excluded from the state budget program for 2024, will continue to exist for at least another year. It was previously discussed that the crisis in the real estate market in Portugal was provoked, among other things, by the preferential tax regime of NHR. Portuguese Prime Minister António Costa emphasized that maintaining this measure leads to an inflated housing market.

Long discussions on the “More Housing” bill have led to some of the blame for the real estate crisis being placed on the NHR preferential tax regime. Portuguese Prime Minister António Costa emphasized that maintaining this measure inflated the housing market.

The NHR preferential tax regime provided foreign residents with the following benefits:

  • Expats who moved to Portugal could pay no taxes on worldwide income for 10 years, making the country very attractive to businessmen and professionals.
  • Instead of a progressive rate, which could be as high as 53%, the NHR allowed the tax to be paid at a flat rate of 20%.
  • To take advantage of NHR benefits, foreigners had to be tax residents of other countries for the last 5 years.

Reportedly, those who already use the benefits will be able to continue to do so. However, for new expats, the NHR will no longer be available after 2024. This means foreign nationals planning to move to Portugal must look for other tax solutions.

It is important to note that Portugal's “residence permit for investment” program remains relevant. However, buying a property or depositing it in a bank is no longer possible under it. But other opportunities remain, such as job creation and investments in culture, science, or foundations. The minimum threshold for such investments remains at the same level—EUR250,000.