Non-habitual residence is a status in Portugal that can eliminate or reduce taxation on income for qualifying foreigners. It makes Portugal particularly attractive as a retirement destination, aside from the other obvious benefits of great weather, beaches, reasonably priced property, safety and a low cost of living.
The basic principle is that "passive income" such as pensions, real estate income and dividends from investments in some jurisdictions (including all EU countries) will not be taxed in Portugal if they *could* be taxed in the home country under double taxation agreements. Many countries like the UK do not tax non-residents on such income, as a way to encourage foreign investment. But because they would be entitled to, such income would also not be taxed in Portugal for those with NHR status.
To maintain NHR status, you must be resident, which means you must spend at least 183 days per year in Portugal.
NHR is not a residency route, rather it is a benefit available to those who obtain residency by other means (such as retirement). The concession lasts 10 years.
I can advise on both the residency process, and arrange NHR once that is obtained.
You should always seek independent financial advice before starting the immigration and residency process. I am not an accountant, tax specialist or financial adviser and so cannot advise on the financial implications for your own exact circumstances, only the broad benefits of the NHR status and the process and rules regarding the immigration side.
NHR Update 2024
NHR registration effective for the year 2024, can only be submitted if it also meets the legally established conditions (subparagraph c. of paragraph 3 of article 236 of the Transitional Provision of Law No. 82/2023, of December 29) and provides evidence of at least one of the following elements:
i) Employment contract, secondment agreement or promise of such which was concluded by December 31, 2023, for duties to be performed within Portugal;
ii) Lease agreement or other contract granting the use or possession of property in Portuguese territory concluded by October 10, 2023;
iii) Reservation contract or promise contract for the purchase of real estate in Portugal concluded by October 10, 2023;
iv) Enrollment or registration for dependents in a school located in Portuguese territory, completed by October 10, 2023;
v) Valid residence visa or residence permit until December 31, 2023;
vi) Have initiated the process to obtain a residence visa or permit (either by submitting documents, or scheduling an appointment for the submission of documents) before December 31, 2023.
You must be in possession of the supporting documents and be able to present them if requested by the services of the Tax and Customs Authority (AT).