The Non-Habitual Resident (NHR) regime, which offers lower tax rates for new residents from overseas during 10 years, will end next year, according to the Portuguese government.
In an interview with CNN Portugal last week, Prime Minister António Costa said that the regime will end for new residents in 2024, but will remain in place for those who already benefit from it.
Part of an attempt to tackle the lack of affordable housing in Portugal, Costa said that the NHR was a measure that “once made sense”: “It doesn't make sense to continue to keep a tax level for non-habitual residents.”
“Keeping that measure for the future is extending a measure of tax injustice that isn't justified, and is also a way of continuing to inflate the housing market,” added Costa, whose government also approved plans to end the Golden Visa programme earlier this year.
While we'll still have to wait for the proposed State Budget for 2024 to find out what the new law will look like, the announcement to drop the NHR came as a surprise for the entire country.
Investors, developers, economists and even companies have shown concern about the scrapping of another measure that will likely have a big impact on the sector without actually solving the housing crisis.