NHR Tax Guide — Aldeia Realty

Important Update: NHR Regime Closure

The original NHR regime closed to new applicants on 1 January 2024 under Portugal's State Budget Law. However, several important categories can still benefit from transitional rules or alternative regimes. This guide explains the current landscape for 2024/2025.

Who still qualifies: existing NHR holders (full 10-year benefits), 2023 residents who applied by 31 March 2024, certain professionals with specific employment contracts, and qualifying individuals under the new IFICI regime. We strongly recommend consulting a Portuguese tax advisor for your specific situation.

WHAT IS NHR?

A Decade of Tax Efficiency

The Non-Habitual Resident (NHR) regime was a Portuguese tax programme that offered significant benefits for up to 10 years to foreign professionals, retirees, and investors moving to Portugal. While the original regime closed to new applicants in January 2024, existing holders retain their benefits, and transitional rules may apply for certain late applicants.

For property owners and investors on the Silver Coast, understanding the current tax landscape — including the new IFICI regime — is essential for informed decision-making.

Years of Benefits

20%

Flat Tax Rate

On Foreign Income*

*For qualifying existing NHR holders. Most foreign-sourced income is exempt from Portuguese tax, provided it may be taxed in the source country under the applicable double tax treaty.

KEY BENEFITS

What NHR Means for You

Flat 20% Income Tax

Employment and self-employment income from high-value activities (including many professional and tech roles) is taxed at a flat 20% instead of Portugal's progressive rates up to 48%.

Foreign Income Exemption

Most foreign-sourced income — including pensions, dividends, interest, royalties, and rental income — is exempt from Portuguese tax under the NHR regime (provided a tax treaty exists).

Property Investment Friendly

Rental income from Portuguese property is taxed at the flat 20% rate. Capital gains on property are generally taxed at 28%, but your primary residence may qualify for full or partial exemption if reinvested.

CURRENT STATUS 2024/2025

Who Still Benefits?

Existing NHR Holders

If you already hold NHR status, you continue to enjoy the full benefits for your entire 10-year period. There is no change to your tax treatment.

Transitional Applicants

You may still qualify under transitional rules if:

You became a Portuguese tax resident in 2023 and submitted your NHR application by 31 March 2024
You moved to Portugal under a specific professional employment contract registered before the deadline
You are a digital nomad or remote worker who registered under the regime before the 2024 closure
You hold a Golden Visa obtained before the 2023 legislative changes and met the residency timeline

The New IFICI Regime

Portugal introduced the Incentivo Fiscal para o Investimento, a Criação e a Inovação (IFICI) as a partial replacement for NHR.

IFICI offers a 20% flat tax rate on employment and self-employment income from qualifying high-value activities, including:

Directors and managers of qualified companies
IT professionals, software engineers, and data scientists
Engineers, architects, and technical specialists
Medical professionals and researchers
University-level teachers and educators
Artists, designers, and creative professionals
Investors and professional investors
Senior executives and board members

Note: IFICI does not include the foreign income exemption that was a key feature of NHR. We recommend comparing both regimes with a tax advisor.

APPLICATION

How to Apply for NHR

Obtain Your NIF

First, get your Portuguese tax number (NIF) from the local tax office (Finanças) or through a fiscal representative. Non-residents need a fiscal representative.

Establish Tax Residency

Move to Portugal, register your address, and spend 183+ days per year in the country. Register as a tax resident at Finanças.

Submit NHR Application

Apply for NHR status through the Portuguese tax portal or with assistance from your accountant. The deadline is March 31 of the year after you become resident.

We work with experienced English-speaking accountants who specialize in NHR applications. Contact us for a referral.

TIMELINE

What to Expect

Month 1–2

Arrive in Portugal, secure accommodation, obtain NIF, open bank account, and register as tax resident at your local Finanças office.

Month 3–6

Establish habitual residency (183+ days), finalize property purchase if applicable, and prepare NHR application with your accountant.

By March 31 (Year 2)

Submit your NHR application. Approval typically takes 2–4 weeks. Your 10-year benefit period begins from your first year of tax residency.

IMPORTANT NOTES

Things to Keep in Mind

NHR is not a "zero tax" scheme

While many types of foreign income are exempt, Portuguese-sourced income and some foreign income may still be taxable. Always consult a qualified Portuguese tax advisor for your specific situation.

Tax benefits can be combined with property purchase

Whether you hold NHR, qualify for IFICI, or are under the standard Portuguese tax regime, property ownership remains an attractive investment. Rental income is taxed at a flat 28% regardless of regime, and primary residence sales may qualify for capital gains exemption when reinvested. Use our Tax Calculator to estimate your purchase costs.

Professional guidance is essential

NHR rules are complex and subject to change. We strongly recommend working with an English-speaking accountant who specializes in international tax matters. We can introduce you to trusted professionals on the Silver Coast.

Non-Habitual Resident (NHR) Scheme