Portuguese Non Habitual Resident Status
This very advantageous status is part of the measures taken by the Portuguese government in 2009 to encourage real estate investment in the country: exemption from pension tax, business and professional income, investment gains, participations, dividends, property income and capital gains from a foreign source in Portugal.
Obtaining the status of Non Habitual Resident (NHR) in Portugal will allow you to benefit from an advantageous taxation on your foreign source income. However, you may also be exempt from taxation both in Portugal and in the country where the income comes from. This status also offers a special tax rate of 20% on income from high value-added activities. Find out more about these high value added activities in our dedicated article.
A status that is not only advantageous but also valid for 10 years. Its duration is interesting but this NHR status cannot be renewed.
According to the latest study set up by the Franco-Portuguese Chamber of Commerce and Industry, French expatriates in Portugal are more and more numerous but are mainly represented by 80% of retired people. This is mainly due to the tax advantages offered by the status of Non Habitual Resident in Portugal. This site aims to give as much information as possible to French speakers wishing to settle in Portugal, mainly in Lisbon, you will find below a point on the most frequently asked questions about this Portuguese NHR status.
Non Habitual Resident in Portugal: be accompanied
As stated above, it is not possible to expatriate to Lisbon and immediately apply for Non Habitual Resident status. You will first have to carry out various administrative formalities with the city’s administration. This will not be a problem if you are fluent in Portuguese, but if not, it is strongly recommended that you are accompanied by a competent person. You can also contact me here by using the button below and be accompanied in all these steps from A to Z by a competent person:
- To explain you the different necessary steps
- Make sure you have all the necessary documents to complete the application.
- To accompany you directly in the different Portuguese administrations if needed.
- Follow the different steps until you obtain your papers and your status of Non Habitual Resident.
- Remaining available whatever your fears or questions may be
It is important to note that the information on this page has no legal value and that it is your responsibility to be accompanied by the professionally competent people to obtain this NHR status in portugal. Use the contact button to be accompanied by a professional in Lisbon.
Please note that the status of Portuguese NHR could be changed in the coming years and be subject to taxation on previously exempt income. For more information, you can read our article: Non Habitual Resident in Portugal: status soon to change ?
Conditions for Non Habitual Resident Status in Portugal
A point often relayed on the forums and containing many distorted statements by word of mouth. The obtaining of the status of Non-Usual Resident in Portugal is done under certain conditions, the most important of which is to be a Portuguese resident (and not to have been one during the last 5 years). In order to become a Portuguese tax resident, it is not enough to spend more than 183 days a year in Portugal, as you can sometimes read, but also to prove that your country is no longer the centre of your “Vital Interests”.
It is strongly advised against trying to keep certain vital activities in your country and trying to benefit from the NHR status in Portugal. The tax authorities in Europe and Portugal would be harmed and you could face a very heavy tax adjustment.
Portuguese Non Habitual Resident: taxation
In the case of retired Non Habitual Residents, taxation is not levied on all income. You will find below the various important points to note:
- Exemption from tax for 10 years, only on category H private pensions.
- Other types of income may be exempt if it does not come from tax havens or if it is taxed in another country that has a tax treaty with Portugal.
- Portugal has no wealth tax (ISF). A Portuguese NHR could therefore no longer pay wealth tax when moving abroad.
- There is a municipal tax between 0% and 6% for the acquisition of real estate in Portugal.
- There is an annual stamp tax on residences with a value of more than 1 million euros.
- In Portugal, there is no direct inheritance tax but a 10% tax on real estate inheritance.
- The tax on donations is taxable at 10%, except for donations to direct heirs.
These are just some information on the tax issues that may affect the Non Habitual Portuguese Resident but that I advise you to complete according to your situation. Each case is different and it is possible that obtaining the status of Non Habitual Resident in Portugal may not be successful for various reasons.
You can also consult other of our articles for information on general or property taxation in Portugal :
- Taxation in Portugal
- Declare your taxes in Portugal
- Taxes and duties on real estate purchases in Portugal
- Taxes on rental income in Portugal
Steps to obtain the status of Non Habitual Resident
It is also a recurrent request from people wishing to settle in Portugal and apply for NHR status: what documents to provide and how to do it. Please note that if you do not speak Portuguese, you will first need to find someone who can accompany you to the Portuguese authorities. Whether it is to send a letter, make a call or make an appointment, this point seems indispensable to me.
The procedure for applying for Non Habitual Residence in Portugal is as follows:
- Obtain a Tax Identification Number as a Non-Resident (Portuguese TIN): this is a temporary number that you can replace with a permanent TIN when you have an address in Portugal.
- To actually live in Portugal
- Register with the municipality (Câmara Municipal)
- Obtaining the European register certificate
- Go to the Finanças with the right documents in order to obtain a receipt of application for the status of Portuguese Non Habitual Resident.
- Attach a written sworn statement declaring that you have not been a Portuguese tax resident for the last 5 years.
Please note that you may also be asked for a written certificate stating that you reside well over 183 days per year in Portugal.
However, keep in mind that there may be complications and you should be prepared for them. Indeed, if the Portuguese tax authority has any doubts about your situation and your non-residence in Portugal over the last 5 years, it may ask for additional proof. This may be proof of tax residence or other documents proving that your personal or economic ties during the last years were attached to another country.
The file to be brought to Finanças to apply for Portuguese NHR status must contain the following documents:
- Your valid passport or identity card
- Your Fiscal Identification Number (The paper provided by the Finanças containing the contributor’s number)
- Your European registration certificate
- Your title of property or dwelling in Portugal
- Your tax returns for the last 5 years
- The various certificates of honour
- The letter requesting status (below)
You will find here the document to be produced and brought to the Finanças in addition to those mentioned above. It has been posted on a specialized expatriation forum by an experienced contributor:
The Finanças will give you as a receipt a photocopy of your stamped application.
Income qualifying for Portuguese NHR status
- Wages paid from a non-Portuguese source
- Pensions paid from abroad for Non Habitual Residents
- Rental income, investment income and capital gains from a non-Portuguese source obtained by habitual non-residents are also exempt from personal income tax.
According to the law of the country and from the moment you become a Portuguese tax resident, you are eligible for the status of NHR This means that you must fulfil one of the first 3 conditions as well as the 4th one to be eligible:
- Have your main residence in the country
- Spend at least 183 days in the tax year; and
- Owning a dwelling in Portugal on 31 December of the year with the intention of maintaining it as a habitual residence
- That you have not been taxed in Portugal for the last 5 years
- Have your main residence in the country
- Spend at least 183 days in the tax year
- Owning a dwelling in Portugal on 31 December of the year with the intention of maintaining it as a habitual residence
- That you have not been taxed in Portugal for the last 5 years
There are therefore opportunities for certain categories of people to buy a second home, to spend most of the year there and to generate rental income the rest of the time, which is subject to strong tax advantages.
Obtaining NHR status: time limit, application, procedures, etc.
If you meet the requirements, the application for the status of Non Habitual Resident in Portugal is made immediately and to the General Directorate of Public Finance (Autoridade Tributaria) of your place of residence. The application is made once you have become a Portuguese tax resident or before 31 March of the following tax year.
The chronological order of the administrative steps to obtain the status :
- Obtaining a non-resident tax number
- Living in Portugal (Renting or buying real estate in Lisbon and elsewhere in Portugal)
- egister at the Camara Municipal (The Municipality)
- Send a written request to the Tributary Authority
Application for NHR status in Portugal
By validating the contact form, you authorize me to forward your request to an English-speaking person who will be able to contact you directly. This person is a professional who offers paid services whose price varies according to your requests, needs and projects. Nothing is automated: these are people I know, based in Lisbon and who are qualified to accompany you in your approach & your project.
