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Residence in Portugal: Why UK Passport Holders and Others Should Act Now
Portugal’s popularity as a place to live, work and invest into, has increased substantially over the past few years.
The popular Golden Visa (GV) and Non Habitual Residents (NHR) schemes can be combined and offer a route for individuals to move to Portugal and to enjoy tax advantages once they re-locate there.
The GV is less important for EU citizens as they already have a right to live in Portugal without formal immigration or investment being required.
The motivator for EU citizens has therefore been the NHR.
Status of UK Passport Holders
Until the end of 2020, UK passport holders are considered EU nationals in terms of movement to other EU countries. When the Brexit transition period finishes however, on 31 December 2020, so too will the easy route to residency in Portugal and the current 10 year tax advantage, potentially available through the NHR.
Additional Implications for UK Passport Holders: Post End of 2020
Portugal is a full member of the EU and as such legal residents can travel freely and visa-free throughout the EU under Schengen. UK nationals may no longer be able to do this as from the end of 2020.
Further Reasons for UK Passport Holders and Others to Act Swiftly in Relation to Moving to Portugal
It has previously been possible, with careful structuring, for NHRs to not be taxable on income, other than Portuguese-source income for the 10 year NHR designated term (must not have been resident in Portugal within the last five Portuguese tax years).
Recent amendments now include a tax of 10% on pension income. Further amendments are anticipated which would mean that all new NHRs would be taxed 10% on their worldwide income.
The Good News
It seems very unlikely that such a change would be introduced before the end of 2020 and similarly, any new rules are very unlikely to be applied retrospectively.
Combination of GV and NHR
Many non-EU individuals and families apply for GV status as an insurance, to enable them to move to Portugal, in case of difficulty within their home country. A number do not wish to actually move to Portugal unless they need to. It might however, now be valuable for these individuals to apply for NHR, to be able to enjoy the benefits that it offers, just in case they do relocate to Portugal.
To apply for NHR, a fiscal representative such as Dixcart needs to be appointed in Portugal and the individual must have a place to live in Portugal, this could be rental of a modest apartment.
Changes to the GV?
Investment in residential property has been a popular route for non-EU citizens to apply for the GV and to subsequently obtain residency in Portugal, with permanent residency following after five years and an ability to apply for nationality shortly after.
Lisbon and Oporto have been particularly popular as well as certain coastal areas. Locals are being priced out of the market in locations such as these, and there is a strong possibility that residential property investment into these areas might not be allowed, in the future.
Anybody who is thinking of moving to Portugal in the near future, should act now.
UK nationals should definitely act before the Brexit transition period comes to an end, thereafter the right to Portuguese residency for UK passport holders, with no visa requirements, will come to an end.
If you require additional information regarding moving to Portugal, please contact the Dixcart office in Portugal: email@example.com