Portugal has long been popular among travelers, and in recent years, it’s become a hotspot for foreign, high-net-worth homebuyers, too. But that’s about to change.
This month, the Portuguese government announced its plans to end its special tax regime for non-habitual residents starting in 2024. Under the current NHR program, qualifying individuals who live in the country at least part-time enjoy tax exemptions for up to 10 years on income earned in Portugal and are also exempt from paying taxes on their global earnings. Additionally, in February, Portugal also said it would be pulling the plug on its golden visa program over concerns that wealthy expats were causing property prices to rise.
“We already have clients that are looking to reconsider their plans,” Alex Ingrim, a private wealth manager and senior investment analyst at Chase Buchanan, told Business Insider. “I think it’s caused a lot of people to reconsider why they were moving to Portugal if it’s not going to be as easy as they first thought.” The good news is that Americans and other foreigners who are already living in Portugal will still keep their tax benefits through the duration of their 10-year term.
Portugal announced that in 2024 it will be ending its Non-Habitual Residency tax regime for new entrants.
Unsplash/Louis Droege
As of 2022, there were approximately 10,000 Americans living in Portugal. Per the New York Times, that’s a whopping 239 percent increase since 2017. According to a recent report from the Property-Market Index, home values throughout the country spiked 6.5 percent over the last year due to the country’s inability to keep up with demand.
In the Algarve region specifically, prices rose 15 percent in the same period, with cities like Lisbon experiencing similar surges. At Quinta do Lago, a golf community on the Algarve coast, prices have jumped over 28 percent since 2020, and the research firm estimated that values will climb by 19 percent by 2025.
“It’s causing people to take a step back and go, ‘Okay, Portugal was the easy answer, and now there’s no other easy answer out there. France, Italy, or Spain might be back on the table,’” Ingrim told Insider.
Source: Vacation Home - robbreport.com
