Is the NHR tax regime still available for new applicants in Portugal?

No, the NHR (Non-Habitual Resident) tax regime is no longer available for new applicants. Here's what happened and what alternatives exist.

What Was the NHR?

The Non-Habitual Resident regime, introduced in 2009, was one of Portugal's biggest draws for expats:

Key benefits:

• 20% flat tax rate on certain Portuguese-source income (vs. up to 48% standard)
• Exemption from Portuguese tax on most foreign-source income
• 10% flat rate on foreign pensions (after 2020)
• 10-year duration

This made Portugal incredibly attractive for retirees, remote workers, and investors.

What Happened?

September 2023: Prime Minister António Costa announced NHR would end for new applicants

January 1, 2024: NHR officially closed to new registrations

March 31, 2025: Transition period ended for those who qualified under special conditions

Who Still Benefits from NHR?

If you became Portuguese tax resident AND registered for NHR before January 1, 2024, you continue to enjoy NHR benefits for the full 10-year period.

Transition period (now closed) covered:

• Those with residence permits before January 1, 2024
• Those with signed rental contracts or property purchases before October 2023
• Those who had started visa applications by specific deadlines

What Are the Alternatives?

1. Standard Portuguese Tax Rates

New residents now pay standard progressive rates:

2. IFICI (NHR 2.0)

A new regime called the "Tax Incentive for Scientific Research and Innovation" launched in 2025:

Benefits:

• 20% flat tax on Portuguese employment income
• Relief from double taxation on some foreign income

Eligibility (very limited):

• Highly qualified professionals in scientific research and innovation
• Must not have been Portuguese tax resident in previous 5 years
• Must not have previously benefited from NHR

Reality: Most expats will NOT qualify for IFICI. It's designed for researchers, scientists, and specific tech roles—not general remote workers or retirees.

3. Double Taxation Treaties

Portugal has treaties with many countries that can reduce your tax burden:

• US, UK, Canada, Australia, and most EU countries
• Can avoid being taxed twice on the same income
• Consult a tax advisor for your specific situation

Impact on Different Expat Types

Retirees:

• Most affected by NHR ending
• Foreign pensions now taxed at full progressive rates (vs. 10% under NHR)
• Consider countries with better pension tax treatment if tax is primary concern

Digital nomads/Remote workers:

• Portuguese income taxed at standard rates
• Foreign income also taxable (worldwide taxation for residents)
• May need to restructure arrangements

Investors:

• Dividend and capital gains treatment less favorable
• Consider tax-efficient investment structures
• Professional advice essential

Should Portugal Still Be on Your List?

Despite losing NHR, Portugal still offers:

• High quality of life
• Excellent climate
• Good healthcare
• Safe environment
• Path to EU citizenship
• Strong expat community

The tax situation is less favorable, but many expats choose Portugal for reasons beyond taxes. If tax optimization is your primary goal, other jurisdictions may now be more attractive.

Important Considerations

1. Don't try to "work around" NHR ending: Tax authorities are aware of common schemes.

1. Get professional advice: Tax situations vary enormously by income source, home country, and structure.

1. Consider the full picture: Lower taxes elsewhere might come with trade-offs (quality of life, visa requirements, healthcare, etc.)

1. Plan ahead: If moving to Portugal, structure your affairs tax-efficiently before becoming resident.

The end of NHR was a significant change, but Portugal remains a wonderful place to live. Just go in with realistic expectations about your tax obligations.