You can STILL apply for Non Habitual Residence (2024)

Non Habitual Residence (NHR) - What has happened?

In my last video, I explained that there were proposals to cancel the NHR scheme within effect from 1st January. We were hoping the proposal would be amended or at least watered down in parliament but unfortunately they weren’t. Therefore, the NHR scheme is cancelled for new applicants with effect from start of 2024.

The good news

1. Existing Non Habitual Residents are unaffected
2. There is a transitional regime for 2024 so in certain situations you can still qualify for NHR in 2024
3. A new tax incentive program has been introduced which, at the current time, has no name (some have called it “NHR 2.0”)

Existing NHR individuals

Those with NHR already will continue to benefit from the scheme until the end of their 10 year period.

Just be cognisant of the planning you can be putting in place now to put yourself in the best position possible so that you will be in a tax efficient position post the end of NHR.

Please see our article below for more details:

https://spectrum-ifa.com/preparing-fo...

Residency obtained after 1st January 2024

Those who obtain Portuguese residence after 1st January 2024 will not be able to apply for the NHR scheme unless you meet one of the transitional criteria below.
Transitional rules: applications open until 31st December 2024

Those who become resident in 2024 may still be able to apply for NHR if certain conditions are met. These are individuals with:
• A promise of employment or secondment, or a work contract before 31st December 2023 and where the work is performed in Portugal
• A contract in respect of purchase, lease or use of property in Portugal concluded before 10th October 2023
• A reservation or promissory contract over a property in Portugal before 10th October 2023 i.e. a `contrato-promessa de aquisição de direito real sobre imóvel`
• Enrolment or registration of dependants in education within Portugal before 10th October 2023
• A residence permit or visa obtained prior to 31st December 2023
• A residence or visa process registered with the relevant authority before 31st December 2023

Those who cannot claim NHR status will be subject to the standard rates of Portuguese tax.
A practical point on the granting of NHR – it used to be the accepted principle that you needed to have your FULL residency before applying for NHR. But in practice we’re seeing clients successfully applying for NHR with just the first stage permit in place. It seems that it very much depends on the interpretation of each local tax authority.

A new tax regime……NHR 2.0?

There is a new 10 year scheme introduced as a result of the 2024 Budget Law that offers benefits to select individuals. This is aimed at attracting those involved in the scientific research and innovation fields and will apply to those with roles in higher education and specific high value sectors.

We will be doing a separate video on this over the next few weeks with more details and some planning angles, so please subscribe to the channel if you want to be kept up to date on this.
Final words

It is expected that there will a high volume of applications for NHR and for embassy appointments so if you can, take action now.

Even if you do not qualify for NHR or NHR 2.0, Portugal can still be a very tax efficient place to live however more careful planning will be needed both before and after your move.

IMPORTANT – PLEASE READ REGARDING THIS CHANNEL

The content on this channel is for educational and information purposes only. It should not be relied on as advice, and you should always take qualified advice before making any changes to your personal position.

Whilst I have experience in the financial and tax industry, this channel is for recreational purposes and is not an advertisement for my business or services. Its purpose is to share quality information.

Whilst every care is taken as to the accuracy of the information in these videos, the information provided is based on the understanding of the rules at the time, and rules can change with little or no notice.

Whilst I cover a wide range of issues on the channel, in my professional role I specialise in tax efficient investments, UK and overseas pensions, estate planning, and wealth management for expatriates based in Portugal. Unfortunately, I do not offer visa or tax return services, nor can I assist US nationals.

Thank you for your support and understanding. I hope to continue to provide you with valuable information to help you with your life in Portugal. If you have any suggestions for content you would like to hear, please let me know