Non Habitual Residence Portugal

Portugal has recently created interesting conditions regarding fiscal benefits for all those who become Portuguese Non Habitual Residents. Below we explain how you can take advantage of these new incentives.

Advantages

• During 10 years, taxation related to personal income tax (IRS) on labor income in Portugal is fixed at 20%.
• There is No taxation for pensions neither for employment and self-employment income that is obtained outside Portuguese territory.

What are the requests to become a Non Habitual Resident?

• Shouldn´t have been a Portuguese resident for the last 5 years.
• You need to register as a tax resident at the local tax office in Portugal (Finanças) In order to apply for this you must have been in Portuguese territory a total of more than 183 days, consecutive or non-consecutive. The other alternative is that you remained for less time, but at 31st December of that year, you have a home in such conditions that the tax office premises that it is intended to be occupied as your habitual residency.
• Request the Non Habitual Resident status to be attributed at the time of registering as a tax resident in the Portuguese territory or by the following year until the 31 st of March in which you become a resident in Portugal.

Domestic Taxation Rate applicable to Non Habitual Residents

The applicable taxation rate is 20% for employment or self-employment.

The taxes apply to income from high value activities like the ones from artistic, technical or scientific nature:

• A - Architects, engineers and similar
• B – Auditors
• C - Fine artists, actors and musicians
• D - Doctors and dentists, teachers and psychologists
• E - Liberal professions, technicians and similar
• F - Senior managers, managers, Investors

Taxes, Rates & Benefits applicable to Wealth

It is important that you know that in Portugal the concept of property is "full ownership", meaning that the owner has the full and exclusive right to use, enjoy and have immovable property for his usage. This concept gives the Portuguese property system a important competitive advantage when comparing with other countries.

IMT Tax

It is charged when there is a transfer of ownership, it is applied to the value of purchase or to the taxable value of the property, whichever is higher. In case of a property bought for residential use, this tax may vary between 0 and 6%.

Stamp Duty

This is a tax applied to all official acts, deeds and other legal documents. Regarding property purchases it´s applied either to the value shown on the deed contract or to the taxable value of the property, depending which one is higher. The tax is 0.8%

When purchasing a house who is responsible for paying the taxes?

The taxes are paid by the party that purchases the property.

When are the taxes due to be paid?

They have to be paid before the Deed (property purchase document) is signed.

Where can I pay the property purchase taxes?

The taxes can be paid in any Finance office (Finanças), in their Website or at any “Casa Pronta” desk.