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VAP - Real Estate | Algarve Properties

Tax Benefits for Retirees moving to Portugal

The Legal Regime has existed since 2009, however there was a clarification of the Tax Act, which came through the State Budget Law for the year 2013. Accordingly, since the beginning of 2013, the Portuguese Government allows any retired expats to establish a normal tax residence in Portugal, provided that he has not been tax resident in Portugal for the past five years, thus giving him a tax exemption for a period of 10 years, although this term could be extended.
To benefit from a no tax pension the individual must have his pension in a country with which Portugal has an agreement on double taxation. In moving his pension to Portugal with his residency the individual can therefore avoid paying tax in their country of origin and only be taxed in Portugal; which in turn offers a tax exemption for a period of 10 years.

Thus Portugal has become one of the EU's more attractive investment prospects from a fiscal point of view. To receive this status, the applicant will have to obtain the status of "Non Habitual Resident".

In practice, what this means is that a reformed obtaining a reform in their country of origin and to transfer their tax residence to Portugal, will be completely tax free. This measure is a strong incentive for the housing market, once the renovation can buy your home , or your dream farmhouse in Portugal, financing the purchase with only the monthly amount that fails to pay for reform in their country of origin.

The Non-Resident in the European Union, and who are willing to invest in Portugal , buying a property worth at least 500,000 euros, can get called Golden Visa - a permission to live permanently in Portugal.
Finally , not only pensioners can benefit from a highly advantageous tax regime, but also the professionals engaged in an activity with high added value, such as doctors, engineers, architects, psychologists and others who appear on a list drawn up by the Tax Authorities if they obtain the mentioned status of "Non Habitual Resident", benefit from a reduced income tax rate of only 20%.

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