The Non Habitual Residents is a special regulation exclusively applicable to individual persons who transfer their residence to Portugal after a long period of residence abroad (minimum of 5 years), who obtain income from dependent or independent work, or pensioners.
The NHR special regulation was created to encourage the transfer of residence to Portugal of pensioners, businessmen, investors and specialized professionals. It’s compulsory for purposes of tax residence that, in particular, the individual person has a property that could be considered as habitual residence in Portugal, and where remains for more than 183 day a year, being this one of the elements to provide in the application for NHR.
The NHR can benefit from a special IRS tax (Personal Income Tax) regime for a consecutive period of 10 years.
The income considered to haven’t been obtained in Portugal, since they don’t come from a tax haven, could be exempted from taxation, in certain circumstances defined by law.
In this context, a NHR that is subject to an unfavourable tax regime in its current country of residence may, through the tax savings obtained in Portugal, recover all the investment made in the acquisition of a permanent residence within the maximum period of 10 years allowed by this special tax regulation.
On the other hand, the income obtained in Portugal, since that they are considered income from dependent work and professional and business income, they are taxed at a special rate of 20%, once they are related to activities of high added value, with a scientific, artistic or technical character, exercised in Portugal, which are identified in legislation (Ordinance no. 12/2010, of January 7), and income from other categories being taxed at normal Personal Income tax rates.
The taxes in the property for housing acquired in Portugal are as the follows (there is no tax on the assets of detention):