The Portuguese government has introduced a 'transitory NHR tax regime' for non-habitual residents in 2024. This temporary scheme extends the Non-Habitual Residence (NHR) regime until December 31, 2024, for foreigners who can prove they were planning to move to Portugal in 2023.
Documents such as property purchase evidence, residence visa requests, or enrollment in Portuguese schools can serve as proof.
The new transitory regime provides six ways for individuals to benefit:
- Promise of employment or work contract, or promise or secondment agreement celebrated until December 31, 2023, with work duties having to be performed in national territory;
- Lease contract or another contract granting the use or possession of property in Portuguese territory concluded until October 10, 2023;
- Reservation contract or promissory purchase contract with rights over property (contrato-promessa de aquisição de direito real sobre imóvel) in Portuguese territory concluded until October 10, 2023;
- Enrolment or registration of dependants in an educational institution located in Portuguese territory, completed until October 10, 2023;
- Residence visa or residence permit valid until December 31, 2023;
- Procedure initiated with the competent authorities for the granting of a residence visa or residence permit, until December 31, 2023.
The decision to scrap the NHR regime was justified by Prime Minister António Costa earlier, citing fiscal injustice and housing market inflation. However, the Socialist Party (PS) now believes a transitional period is necessary to protect the expectations of individuals who have decided to immigrate to Portugal.
This announcement follows the resignation of PM Costa and the scheduling of early elections for March 10, 2024. PS has faced criticism for altering some divisive measures after the election announcement. The NHR regime, in effect since 2009, allows individuals to enjoy reduced tax rates on income for a duration of 10 years.