2024 promises a renewed transitional regime for non-habitual residents (NHR), bringing with it a host of opportunities for those looking to make Portugal their new home. The proposed amendments to the draft State Budget for 2024 (OE2024) have sparked considerable interest, particularly among workers, retirees, and investors.
While the proposed end to the tax regime for NHR has initially caused concern among many families, the Socialist Party (PS) is now offering a reassuring solution. The proposed transitional regime, slated for implementation in 2024, caters to individuals who can demonstrate their preparedness to relocate to Portugal in 2023. This proof may take the form of an employment contract, a lease agreement, or even the purchase and sale of a property.
The motivation behind ending the tax benefits for non-habitual residents, as outlined in the OE2024, stems from the achievement of its primary objectives. António Costa, the Prime Minister, has also underscored concerns that the influx of foreigners enjoying these benefits contributes to the rise in housing prices and, subsequently, impacts access to housing. Nonetheless, industry experts, as consulted by idealista/news, assert that the impact remains 'residual.'
The outgoing socialist government's vision was to reallocate these tax incentives to scientific research and innovation, a move that has left many professionals, families, and investors excluded. This decision has sparked concerns among economists and professionals across various sectors, including real estate. A manifesto signed by 59 subscribers, including managers and former government officials, argues that the rationale for ending the NHR tax regime lacks substantiation.
In response to these concerns, the PS has proposed an extension of the transitional regime already outlined by the government. Initially applicable only to those already registered as NHR or meeting the conditions by December 31 of the current year, the extended regime now encompasses families that can prove their preparedness to move to Portugal in 2023.
Under the proposed Non-habitual Resident Regime, families seeking to benefit from NHR until December 31, 2024, must provide documentation demonstrating their prior planning of the move to Portugal. This includes, but is not limited to, employment contracts, lease agreements, property purchase and sale agreements, educational enrollment for dependents, valid residence visas or permits, and initiated procedures for residency, all completed by specified dates.
These adjustments aim to reinforce the transitional regime and protect the legitimate expectations of individuals who have committed to immigrate or return to Portugal. The proposed amendments acknowledge the significant impact that such decisions have on individuals' lives and seek to instill confidence in those making similar choices. As we anticipate these changes, it is essential for current and potential residents to stay informed and navigate the evolving landscape of Portugal's residency regulations.
