Find out everything about the NHR Regime: who can benefit, tax advantages and how to apply for status.
- The NHR Scheme in Portugal was created to attract qualified professionals and individuals with significant assets, offering unique tax benefits for 10 years.
- Among the main benefits are reduced rates for high value-added domestic income, partial exemption from foreign income and advantages for pensions and retirement funds.
- To apply for NHR status, you must prove your tax residence, obtain a tax identification number (NIF), register on the Finance Portal and submit your application with the appropriate documentation.
Portugal remains a fascinating destination for those seeking quality of life, security and new opportunities. Among the incentives that attract the most interest is the NHR Regime.
Although it has already been revoked, it can still be applied for in specific cases (by those who have acquired tax residence in Portugal by the end of 2024). In addition, there are other incentive options for the same purpose.
Find out what this scheme is, who can benefit from it, what the advantages are and how to take the first steps.
What is the NHR Regime?
The NHR Portugal Regime (formally known as the Non-Habitual Resident tax regime) was in force until the end of 2024. It was created to make the country more attractive to skilled professionals, investors and individuals with significant assets who were looking to establish tax residence in Portugal.
In practice, it offered a range of tax benefits for a specified period, with specific conditions for access and maintenance, designed to strengthen the country’s competitiveness on the international stage.
Despite its revocation, the regime remains in force for all taxpayers who already benefit from this status. If you became a resident before the end of 2024 but have not yet applied for the regime, it is still possible to assess your application, provided that the other legal requirements are met.
Benefits of the NHR Portugal Scheme
For those who managed to qualify for the NHR Portugal Scheme, the set of benefits was, at the very least, appealing. It was not just a matter of paying less tax, but of having a more intelligent and predictable tax framework, capable of supporting important decisions (from asset reorganisation to international mobility).
Special income tax rate of 20%
One of the pillars of the regime was the special rate of 20% applied to income earned in Portugal from activities considered to be of high added value. For many professionals, this represented a substantial difference when compared to general income tax rates, which can be as high as 48%.
Exemptions for income earned outside the country
In addition, those who received income abroad could benefit from specific exemptions, provided that certain conditions were met – something that made all the difference for those with diversified income.
In the case of pensions earned outside Portugal, the regime offered a special rate of 10%, making the country particularly attractive to retirees seeking fiscal stability, a mild climate and quality of life.
Benefits for 10 years
Another valued aspect was the duration: the framework remained in place for 10 years, which allowed for planning for the future with a level of security that is rare in tax matters. And, unlike other European regimes, there was no minimum annual stay requirement, which offered flexibility to those who led a truly international life.
Possibility of avoiding double taxation
Even without the NHR, Portugal already offered significant advantages: no wealth tax, tax exemption on gifts and inheritances between immediate family members, and no taxation on simple transfers of funds, regardless of their origin. All of this was part of a stable tax system, aligned with European rules and supported by an extensive network of Double Taxation Avoidance Agreements, which added legal and operational security.
Essentially, the regime created a competitive and transparent tax environment where professionals, investors and families could organise their income and assets efficiently, without losing the peace of mind that comes with having a clear and recognised framework within the EU.
Who can apply for the NHR Portugal Regime?
Although the NHR Portugal Regime has been revoked for new residents, it is worth understanding who could (and, in some cases, still can) access this status.
For the purposes of eligibility, the following criteria had to be met:
- Become a tax resident in Portugal, in accordance with the law, which meant staying in the country for more than 183 days per year or, alternatively, having accommodation that demonstrated the intention to reside there habitually.
- Not have been taxed as a tax resident in Portugal in the five years prior to the application.
- Apply for classification within the legal deadline, usually by 31 March of the year following that in which the taxpayer became a tax resident.
- Be engaged in an eligible activity, including healthcare professionals, managers, information and communication technology professionals, or university lecturers and researchers. Have proven qualifications or experience: in addition to performing an eligible activity, it was necessary to have at least five years of relevant experience or a qualification corresponding to level 4 of the European Qualifications Framework (or level 35 of the International Standard Classification of Education).
Comply with the conditions applicable to foreign-source income when seeking to benefit from the exemptions provided for that type of income.
Portugal NHR Regime and Golden Visa: what is the difference?
Although often mentioned in the same context, the Portugal NHR Regime and the Golden Visa served different purposes. One focused on taxation; the other on residence permits. And that is precisely where the essential difference lies.
The NHR Regime was a tax framework. It was not a visa, nor did it give the right to enter or reside in Portugal. To benefit from the regime, you already had to be a tax resident in the country and meet the criteria defined by law. The aim was to create competitive tax conditions for those who decided to live and work in Portugal, with special rates and exemptions on certain types of income.
The Golden Visa, on the other hand, is a mechanism for obtaining residency, aimed at investors who wish to establish an economic connection with Portugal. Instead of tax benefits, the programme allowed applicants to obtain a residence permit through eligible investments (such as funds, research support or job creation) and, over time, paved the way for permanent residency or nationality.
In short, while the NHR helped to structure income and assets more efficiently, the Golden Visa facilitates legal entry and stay in the country. They were complementary for some profiles but never substitutes for each other.
NHR Portugal Scheme: how the request was made
Although the NHR Scheme is no longer available to new residents, it is worth remembering how the process worked, especially for those who are still in the transition period. In general terms, the application followed four steps:
- Confirm tax residence in Portugal. EU citizens dealt with the process at the City Council; those coming from outside the EU first needed a residence permit.
- Obtain a NIF (tax identification number). Issued by the Tax Authority, upon presentation of a passport, proof of address and (where applicable) residence permit.
- Update your status to tax resident. Also at the Tax Office, after obtaining your NIF.
- Submit the application on the Finance Portal. Once you had active access, all you had to do was fill in the form and attach the essential documents: proof of habitual residence, tax returns for the last five years and a statement confirming that you had not been a tax resident in Portugal in the previous five years.
The process also depended on two critical deadlines: proving residence by 31 December and submitting the application by 31 March. After that, the decision would arrive within two weeks.
How to renew the NHR
Those who already benefit from the NHR regime can continue to use it until the end of its 10-year validity period. However, the status is not automatically renewed. It remains active year after year only if the taxpayer continues to meet the conditions that gave rise to the framework, and this implies some practical obligations.
Simply put, ‘renewing’ the NHR means ensuring that the Tax Authority recognises that you are still a tax resident in Portugal and that you meet the required criteria. These are the essential points:
1. Maintain active tax residence
Every year, you must meet the criterion that underpins the scheme itself: maintaining Portugal as your tax residence. In practice, this means having your tax address updated with the tax authorities and staying in the country for more than 183 days per year or maintaining accommodation in conditions that indicate your intention to reside there habitually.
If you change your address, buy a house, move to another city or spend long periods outside Portugal, you must update everything on the Tax Authority’s website to avoid future problems.
2. Declare your income in accordance with the regime
Maintaining NHR status also depends on compliance with the associated tax rules. Every year, when filing your income tax return, you must:
- Declare your foreign income as applicable (employment, self-employment, pensions, capital or property);
- Indicate the correct framework that allows the rates provided for in the regime to be applied (such as exemption, progressive exemption or fixed taxation at 20%, where applicable).
An incorrectly completed declaration may raise questions and lead to additional requests for information.
3. Respond to any requests from the Tax Authority
Although it is not common, the Tax Authority may request additional documentation to confirm that you continue to meet the requirements, especially if there are relevant changes (change of country, significant changes in income, change of job, etc.).
In such cases, you should always have the following with you:
- Proof of habitual residence;
- Employment or service contracts;
- Documentation proving the nature of foreign income.
These requests do not invalidate the scheme but ignoring them can create complications.
4. Pay attention to the expiry date
The NHR has a fixed duration of 10 consecutive years, which cannot be extended. This means that it is not necessary to apply for a formal renewal every year, but it is essential to comply with the requirements annually in order to maintain your status until the end of the period.
In the tenth year, the regime ends automatically. From then on, the taxpayer is taxed according to the general rules of the IRS.
After the NHR: Tax Incentive for Scientific Research and Innovation (IFICI, or RNH 2.0)
After the official end of the NHR, Portugal moved forward with a more demanding alternative that is potentially more advantageous for many profiles. The IFICI scheme (often referred to as ‘RNH 2.0’) is the new tax framework for highly qualified professionals who wish to take up residence in the country.
The two advantages are:
- Fixed income tax of 20% for dependent or independent work in qualified activities;
- Exemption on foreign source income, including interest, dividends, property income and capital gains. There are important exceptions: pensions and income from jurisdictions on the Portuguese list of tax havens are not included in the package.
To apply, you need an academic degree equivalent to level 6 of the European Framework (bachelor’s degree) and three years of proven professional experience. Alternatively, a PhD exempts you from the experience requirement.
The list of eligible professions is comprehensive: executive directors, ICT specialists, engineers, researchers, doctors, industrial designers, university professors, among other technical roles essential to business growth.
The application must be submitted by 15 January of the year following the year of entry into tax residence.
How to invest in Portugal with or without NHR
Factors such as climate, security, institutional soundness and an increasingly innovation-oriented economy have kept Portugal on the radar of international residents looking for more than just tax benefits. It is in this context that Vantage Group’s developments are positioned: projects designed for those who want to live in Portugal with quality, security and a vision for the future.
Comendador 45
- Location: Matosinhos
- Units: 12
- Type: Residential area
- Types: 1-bedroom and 2-bedroom flats
- Area: 50 m² – 75 m²
- Status: Under development
In the heart of Matosinhos, Comendador 45 is a modern apartment complex designed for those who want to feel at home from day one. Every detail, from the layout to the natural light that floods the interiors, has been designed to create effortless comfort, combining functionality and understated elegance.
Here, everyday life takes on a new rhythm: the co-working space on the top floor, the lounge and the panoramic view from the terrace make every moment more enjoyable, whether for working, relaxing or entertaining friends. And all this just a few steps away from the best the city has to offer.
The A Avenida
- Location: Valongo
- Units: 70
- Type: Residential area
- Types: 1-3 bedroom apartments
- Area: 65 m² – 160 m²
- Status: Under development
The A Avenida project was born with one ambition: to give families space to grow and explore. The 70 apartments are designed to take advantage of every ray of natural light and offer large areas where living and socialising becomes simple and enjoyable.
With over 2,000 m² of green areas, a swimming pool, padel court and running tracks, it invites you to enjoy the outdoors, leisure and socialising. Its proximity to Porto and ease of transport make all this even easier.
Sea & Sun
- Location: Matosinhos
- Units: 20
- Type: Residential area
- Types: Studio-2 bedroom
- Area: 40 m² – 80 m²
- Status: Under development
Living a few metres from the beach changes your routine, and Sea & Sun captures exactly that essence. There are 20 apartments that breathe light, space and just the right amount of elegance.
Here, working, relaxing or socialising comes naturally. The coworking space and lounge offer alternatives for everyday life, while the proximity to schools, shops and parks makes life more practical. All this with the sea always there, reminding you that the pace may be intense, but there is always room to slow down.
Portugal NHR Regime: frequently asked questions
Below we answer some of the most common questions about the Portugal NHR Regime.
Can I combine NHR benefits with other international tax regimes?
Yes. Portugal has double taxation agreements with around 80 countries. This means that, in many cases, you can organise your income so that you are not taxed twice.
Does the NHR affect property taxation in Portugal?
The scheme does not directly change the municipal property tax (IMI) or stamp duty on purchases/sales, but income generated from property may be treated differently for tax purposes, depending on whether it is from a domestic or foreign source.
Is it possible to benefit from the NHR if you have mixed income (Portuguese and foreign)?
Yes. The regime provides specific conditions for foreign income, often with exemption, and a flat rate of 20% for certain income of Portuguese origin. It is ideal for professionals with international careers.
Does the scheme cover income from recent activities or only past experience?
For certain high value-added professions, the scheme considers both previous experience and current activity, provided that demonstrable professional competence and recognised qualifications are demonstrated.
What happens if I move to another country during the 10-year period?
NHR status is valid as long as you maintain tax residence in Portugal. If you move permanently to another country, you lose your tax status, but income earned while resident can retain applicable benefits retroactively.
NHR Portugal and Vantage: together in your new life in Portugal
Living in Portugal means choosing a lifestyle, seizing opportunities and organising your income wisely
At Vantage Group, we are by your side every step of the way: we answer your questions, help you understand what makes sense for you and connect you to developments that excel in comfort, functionality and quality of life. Every step without worries. Just a smooth transition to your new life in Portugal.
FRANCISCO SIMÕES
CEO & Partner at Vantage Group
Francisco Simões leads Vantage Group with a clear vision: good architecture and quality property development are not a luxury, but a responsibility. With projects in Portugal, he combines strategy, innovation and rigor to create developments that enhance the urban experience and reinforce the value of the communities in which they are located.