
Portugal can be a very attractive destination for non-residents who want to buy a property. With benefits such as the Golden Visa scheme and even a special tax scheme, Portugal can be an attractive destination to buy a property.
How does the Non-Habitual Resident scheme work?
The status of non-habitual resident in Portugal grants tax advantages for those who establish their tax residence in the country. You must meet certain conditions and go through an application process to be recognized as a non-habitual resident.
First, the status of non-habitual resident can be requested by anyone who meets the following requirements:
- Be a foreign citizen or Portuguese citizen.
- Have had your tax residence outside Portugal in the five years prior to the application.
- Intend to establish tax residency in Portugal.
- Have high added value training or professional experience.
The application for registering as a non-habitual resident should only be made after registering as a resident in Portuguese territory (if it has not already been done).
Thus, the first step towards becoming a non-habitual resident may be to first request a Portuguese taxpayer number (if you do not have one).
By filling in the address, you will be classified as a resident or non-resident in Portugal and to benefit from non-habitual resident status, you will have to change your status to tax resident.
If you already have a non-resident Portuguese TIN, you will have to change your tax address to become a tax resident in Portugal. Only then you will be able to proceed with the registration and application for the attribution of non-habitual resident status.
Please also read: Documentation required for mortgages for non-residents
The request can be made electronically on the Portuguese tax agency website or through a specific form application until the 31st of March of each financial year. To be considered a resident you must stay in Portugal for 183 days (non-consecutive) or, alternatively, prove that you have your own house that serves as the main residence.
The non-habitual resident status entitles you to tax benefits for ten years, provided that during each of those ten years you are always considered a resident citizen. During this period, non-habitual residents benefit from the following tax advantages:
- 20% income tax (IRS) rate from wages and self-employed work if earned through a high-value-added profession of a scientific, artistic or technical nature;
- 10% income tax (IRS) rate on pension income for those registered after 31 March 2020;
- Income from work which does not result from the exercise of a high-value activity and income from other categories is taxed in accordance with the general rules on income tax (IRS);
- Income is subject to withholding tax at the rate of 20%.
How does the Golden Visa work?
The Golden Visa can be an attractive option for those who want to invest and live in Portugal. The scheme, which may see new changes in 2022, continues to present itself as an attractive option.
The Golden Visa is a scheme to obtain residency through an investment option. In practice, it is a scheme to obtain nationality in an expedited manner. The country approves visas more quickly, in order to boost the entry of capital into the economy through the investments of participants in the scheme.
Once the Golden Visa is obtained, it entitles you to:
- Live in Portugal;
- Work in Portugal;
- Move freely, with a visa waiver, within the Schengen area;
- Possibility of obtaining a Permanent Residence Permit after five years, with no expiration date;
- Use the right to reunify your family.
The Golden Visa scheme implies the following investment options in the country:
- Investment of 1 million euros in Portugal and in the creation of opportunities. It means that you can choose to buy several properties or invest in the purchase of companies or businesses.
- Invest between 280 and 500 thousand euros in buying real estate in Portugal. If the properties are located in areas which are earmarked for urban rehabilitation, the investment amount required drops to 350 thousand euros. If the properties are acquired in urban rehabilitation areas and in low population density areas, the value is even lower, at 280 thousand euros.
- Demonstrate the creation of a minimum of eight permanent job opportunities in Portugal.
The Golden Visa option is ideal for those looking for flexible and fast access to investment opportunities in Portugal. The Golden Visa Portugal holder only needs to stay in the country for 7 days during the first year. Golden Visa applications are submitted through Portugal’s Immigration and Border Services (SEF).
Do you want to know how to apply for a mortgage for foreign nationals in Portugal? We can help!