According to a report by Bloomberg: “Portugal attracted a flood of expats in the pandemic, thanks to cheaper property prices, a warm climate and beneficial tax and visa programs. But political pressure tied to rising housing prices has fuelled a recent crackdown on perks for foreigners. And the looming elimination of the tax breaks has many scrambling to file paperwork to make sure they qualify for the program, which can save people hundreds of thousands of euros over 10 years”.

The end of the NHR tax regime is part of the measures in the State Budget for 2024 (OE2024), which was approved at the end of November in Parliament. The PS presented, however, a proposal to amend the document that creates a transitional regime for NHRs next year, in order to take care of the case of workers, retirees or investors who prove that they have prepared their move to Portugal during 2023.

The objective of the Socialist Government is to “strengthen the transitional regime, allowing the legitimate expectations of citizens who have already undertaken a set of material steps to change of tax residence to Portugal, based on the regime whose validity ends with the OE2024 law proposal”.

Bloomberg presented several reports from North Americans who want to move to Portugal and gives the example of Matt Booth, a resident of Boise, Idaho. Initially planning to move to the Algarve in January, where he and his wife bought a house for €380,000 in 2021, he postponed his move date by a few weeks to guarantee qualification.

The North American says he spent around 1,800 dollars (1,668 euros) on flights, close to 3,000 dollars on fees and missed four days of work to fly to Portugal at the beginning of October and present his request in person. Despite a “very stressful and chaotic” process, Matt guarantees that the investment is “worth it” in the long term.

Bloomberg highlights that: “Americans living abroad still pay US taxes. But the non-habitual resident tax system allows expats relocating to Portugal to pay a flat 20% tax on income and 10% levy on pensions for 10 years. That’s less than the progressive tax regime for locals, which requires residents with annual incomes surpassing about €79,000 to pay a 48% tax”.