Portugal is currently grappling with a significant housing crisis. The convergence of an influx of foreign buyers and the challenging European financial landscape is escalating living costs, making it increasingly challenging for the average Portuguese citizen. This dynamic has intensified political pressure on Prime Minister Costa.
In a recent dialogue, Prime Minister Costa hinted strongly that the Non-Habitual Resident (NHR) scheme might conclude by 2024.
Such an announcement, while anticipated by some, raises numerous questions. Costa has often been criticized for making decisions that seemingly lack substantial data or clear justification.
It’s easy for residents and potential investors to feel as though they’re in a state of uncertainty. However, our preliminary research suggests that existing NHR agreements may remain unaffected.
But in this volatile climate, it’s wise to be prepared for all eventualities.
It’s worth noting that the surge in property prices can be largely attributed to the NHR scheme’s incentives. If the program ends, it’s plausible to expect a notable decline in property prices, given that the allure for foreign investors would diminish in light of a potential 48% tax bill. Under such circumstances, few might be willing to take the risk.
We remain committed to keeping you informed and will provide updates as more information becomes available.
While the outcome remains uncertain until the legislative process concludes, it’s highly likely. The socialist government, holding a majority, has typically announced vaguely and then legislated accordingly under the current prime minister.
What’s the timeline for NHR’s discontinuation?
While the Prime Minister quoted “2024”, this doesn’t signify an immediate end to the NHR program come January 1, 2024. It’s more plausible that the program continues throughout 2024 given the time legislative adjustments require. Nonetheless, if the legislation is expedited within the budget framework, there’s a chance it could cease at the beginning of the year. This would be a challenging feat and may invite legal disputes. Our estimation leans towards a mid-2024 termination, though this is speculative.
Will NHR be completely phased out?
That remains a mystery. For instance, the golden VISA program’s discontinuation was announced but was later revised due to public outcry. With NHR, the primary concern voiced by the prime minister is over the pension income tax relief. Potential repercussions, like the possible exodus of skilled workers, might push for partial retention of the program. Predicting the exact outcome is tricky.
How does it impact current NHR beneficiaries?
Those who currently possess NHR status are expected to remain unaffected. Removing this benefit would contravene Portugal’s constitutional principles, and the prime minister has indicated that existing beneficiaries will retain their status.
I’m a legal resident in Portugal. Is it wise to pursue NHR immediately?
Absolutely yes, if you want to use this program. Given the potential changes, securing NHR sooner rather than later is advisable.
I’m in Portugal, but without legal residency. What’s my next step?
Due to the prevailing uncertainties, you should expedite your legal residency application.
Not sure on a move to Portugal without initiating the process. Should I proceed?
If you start on the process promptly, you might still be able to benefit from the NHR regime. But there’s no guarantee. Delays or procrastination could work against you. If you’re committed to the move, act swiftly.
Are you planning to apply for NHR? Then click here for the official guide
Are you considering moving to Portugal? Or unsure? Check this video: