PORTUGAL, does it make sense to become residents?
#1
PORTUGAL, does it make sense to become residents?
My wife and I are very interested in moving and residing in Portugal. My wife is British and carries a British passport but has been resident in SA for many years. We are both in our 50's and have no need to work IF we ensure a tight budget.
Currently we are in Spain applying for our residency but we are having 2nd thoughts due to a few reasons. We are led to believe that moving to Portugal may resolve these problems such as :
1) We both only have South African drivers licences which Spain does not recognise. We believe it will cost us each over Euro 1200 to redo our drivers licences here.
2) I wish to "self build" a motor-home using a locally purchased commercial vehicle but have since established that Spain does not allow for this . No commercial vehicle can be converted here and must remain a commercial vehicle.( very strict)
3) The minimal tax bracket in Spain is 23% which I believe in Portugal is 0% for the 1st 10 years or so for new residents? ( or is this only for immigration?) . Understanding our budget it would be most beneficial not have to pay tax for a few years and until we become established.
4) We were informed that the Cost of living in Portugal is less than that of Spain.
Our intention is bus a small property in our country of residency and remain there indefinitely with the flexibility to travel throughout Europe via Camper depending on the weather and of course costs..... our monthly budget would need to be no more than Euro 1600 pm once we've settled into regular living. Hopefully within our budget we can save about Euro 100 per month to cover future travel costs once a year.
Based on the above, I would be very grateful if you folk could offer some response as to whether indeed it would be worthwhile and cost effective for us to reconsider our residency status in Spain.
Currently we are in Spain applying for our residency but we are having 2nd thoughts due to a few reasons. We are led to believe that moving to Portugal may resolve these problems such as :
1) We both only have South African drivers licences which Spain does not recognise. We believe it will cost us each over Euro 1200 to redo our drivers licences here.
2) I wish to "self build" a motor-home using a locally purchased commercial vehicle but have since established that Spain does not allow for this . No commercial vehicle can be converted here and must remain a commercial vehicle.( very strict)
3) The minimal tax bracket in Spain is 23% which I believe in Portugal is 0% for the 1st 10 years or so for new residents? ( or is this only for immigration?) . Understanding our budget it would be most beneficial not have to pay tax for a few years and until we become established.
4) We were informed that the Cost of living in Portugal is less than that of Spain.
Our intention is bus a small property in our country of residency and remain there indefinitely with the flexibility to travel throughout Europe via Camper depending on the weather and of course costs..... our monthly budget would need to be no more than Euro 1600 pm once we've settled into regular living. Hopefully within our budget we can save about Euro 100 per month to cover future travel costs once a year.
Based on the above, I would be very grateful if you folk could offer some response as to whether indeed it would be worthwhile and cost effective for us to reconsider our residency status in Spain.
#2
Lost in BE Cyberspace
Joined: Feb 2013
Posts: 6,148
Re: PORTUGAL, does it make sense to become residents?
My wife and I are very interested in moving and residing in Portugal. My wife is British and carries a British passport but has been resident in SA for many years. We are both in our 50's and have no need to work IF we ensure a tight budget.
Currently we are in Spain applying for our residency but we are having 2nd thoughts due to a few reasons. We are led to believe that moving to Portugal may resolve these problems such as :
1) We both only have South African drivers licences which Spain does not recognise. We believe it will cost us each over Euro 1200 to redo our drivers licences here.
2) I wish to "self build" a motor-home using a locally purchased commercial vehicle but have since established that Spain does not allow for this . No commercial vehicle can be converted here and must remain a commercial vehicle.( very strict)
3) The minimal tax bracket in Spain is 23% which I believe in Portugal is 0% for the 1st 10 years or so for new residents? ( or is this only for immigration?) . Understanding our budget it would be most beneficial not have to pay tax for a few years and until we become established.
4) We were informed that the Cost of living in Portugal is less than that of Spain.
Our intention is bus a small property in our country of residency and remain there indefinitely with the flexibility to travel throughout Europe via Camper depending on the weather and of course costs..... our monthly budget would need to be no more than Euro 1600 pm once we've settled into regular living. Hopefully within our budget we can save about Euro 100 per month to cover future travel costs once a year.
Based on the above, I would be very grateful if you folk could offer some response as to whether indeed it would be worthwhile and cost effective for us to reconsider our residency status in Spain.
Currently we are in Spain applying for our residency but we are having 2nd thoughts due to a few reasons. We are led to believe that moving to Portugal may resolve these problems such as :
1) We both only have South African drivers licences which Spain does not recognise. We believe it will cost us each over Euro 1200 to redo our drivers licences here.
2) I wish to "self build" a motor-home using a locally purchased commercial vehicle but have since established that Spain does not allow for this . No commercial vehicle can be converted here and must remain a commercial vehicle.( very strict)
3) The minimal tax bracket in Spain is 23% which I believe in Portugal is 0% for the 1st 10 years or so for new residents? ( or is this only for immigration?) . Understanding our budget it would be most beneficial not have to pay tax for a few years and until we become established.
4) We were informed that the Cost of living in Portugal is less than that of Spain.
Our intention is bus a small property in our country of residency and remain there indefinitely with the flexibility to travel throughout Europe via Camper depending on the weather and of course costs..... our monthly budget would need to be no more than Euro 1600 pm once we've settled into regular living. Hopefully within our budget we can save about Euro 100 per month to cover future travel costs once a year.
Based on the above, I would be very grateful if you folk could offer some response as to whether indeed it would be worthwhile and cost effective for us to reconsider our residency status in Spain.
#3
Banned
Joined: Oct 2012
Posts: 26,724
Re: PORTUGAL, does it make sense to become residents?
My wife and I are very interested in moving and residing in Portugal. My wife is British and carries a British passport but has been resident in SA for many years. We are both in our 50's and have no need to work IF we ensure a tight budget.
Currently we are in Spain applying for our residency but we are having 2nd thoughts due to a few reasons. We are led to believe that moving to Portugal may resolve these problems such as :
1) We both only have South African drivers licences which Spain does not recognise. We believe it will cost us each over Euro 1200 to redo our drivers licences here.
2) I wish to "self build" a motor-home using a locally purchased commercial vehicle but have since established that Spain does not allow for this . No commercial vehicle can be converted here and must remain a commercial vehicle.( very strict)
3) The minimal tax bracket in Spain is 23% which I believe in Portugal is 0% for the 1st 10 years or so for new residents? ( or is this only for immigration?) . Understanding our budget it would be most beneficial not have to pay tax for a few years and until we become established.
4) We were informed that the Cost of living in Portugal is less than that of Spain.
Our intention is bus a small property in our country of residency and remain there indefinitely with the flexibility to travel throughout Europe via Camper depending on the weather and of course costs..... our monthly budget would need to be no more than Euro 1600 pm once we've settled into regular living. Hopefully within our budget we can save about Euro 100 per month to cover future travel costs once a year.
Based on the above, I would be very grateful if you folk could offer some response as to whether indeed it would be worthwhile and cost effective for us to reconsider our residency status in Spain.
Currently we are in Spain applying for our residency but we are having 2nd thoughts due to a few reasons. We are led to believe that moving to Portugal may resolve these problems such as :
1) We both only have South African drivers licences which Spain does not recognise. We believe it will cost us each over Euro 1200 to redo our drivers licences here.
2) I wish to "self build" a motor-home using a locally purchased commercial vehicle but have since established that Spain does not allow for this . No commercial vehicle can be converted here and must remain a commercial vehicle.( very strict)
3) The minimal tax bracket in Spain is 23% which I believe in Portugal is 0% for the 1st 10 years or so for new residents? ( or is this only for immigration?) . Understanding our budget it would be most beneficial not have to pay tax for a few years and until we become established.
4) We were informed that the Cost of living in Portugal is less than that of Spain.
Our intention is bus a small property in our country of residency and remain there indefinitely with the flexibility to travel throughout Europe via Camper depending on the weather and of course costs..... our monthly budget would need to be no more than Euro 1600 pm once we've settled into regular living. Hopefully within our budget we can save about Euro 100 per month to cover future travel costs once a year.
Based on the above, I would be very grateful if you folk could offer some response as to whether indeed it would be worthwhile and cost effective for us to reconsider our residency status in Spain.
You as a property owner still have to pay local taxes.
Portugal also has its rules and beaurocracy, they are inescapable.
#4
Re: PORTUGAL, does it make sense to become residents?
Hi all, seems my concerns were not clear. Apologies and i'l try again .
Main concern is whether w can:
- simply exchange our SA drivers licenses or would we need to redo them.
- Would one be able to build a camper using a Commercial vehicle and still be able to matriculate it in Portugal?
- Would we be taxed on out "out of Portugal" income for the 1st couple of years?
The question of "cost of living" was mostly for interest sake as i full understand the dynamic's of location etc. Our mission would be to settle within an economic base where we would be able to save for future travel adventures..... not partake in daily pub crawls or eating out .. My wife cooks great !! and she allows me to drink at home, lol.
Main concern is whether w can:
- simply exchange our SA drivers licenses or would we need to redo them.
- Would one be able to build a camper using a Commercial vehicle and still be able to matriculate it in Portugal?
- Would we be taxed on out "out of Portugal" income for the 1st couple of years?
The question of "cost of living" was mostly for interest sake as i full understand the dynamic's of location etc. Our mission would be to settle within an economic base where we would be able to save for future travel adventures..... not partake in daily pub crawls or eating out .. My wife cooks great !! and she allows me to drink at home, lol.
#5
Lost in BE Cyberspace
Joined: Feb 2013
Posts: 6,148
Re: PORTUGAL, does it make sense to become residents?
Hi all, seems my concerns were not clear. Apologies and i'l try again .
Main concern is whether w can:
- simply exchange our SA drivers licenses or would we need to redo them.
- Would one be able to build a camper using a Commercial vehicle and still be able to matriculate it in Portugal?
- Would we be taxed on out "out of Portugal" income for the 1st couple of years?
The question of "cost of living" was mostly for interest sake as i full understand the dynamic's of location etc. Our mission would be to settle within an economic base where we would be able to save for future travel adventures..... not partake in daily pub crawls or eating out .. My wife cooks great !! and she allows me to drink at home, lol.
Main concern is whether w can:
- simply exchange our SA drivers licenses or would we need to redo them.
- Would one be able to build a camper using a Commercial vehicle and still be able to matriculate it in Portugal?
- Would we be taxed on out "out of Portugal" income for the 1st couple of years?
The question of "cost of living" was mostly for interest sake as i full understand the dynamic's of location etc. Our mission would be to settle within an economic base where we would be able to save for future travel adventures..... not partake in daily pub crawls or eating out .. My wife cooks great !! and she allows me to drink at home, lol.
Typically, if your country is part of the Road Traffic International Agreements, you must exchange your non-EU driving licence within 185 days after obtaining residence in Portugal. If you’re an Australian, Canadian, South African or US citizen, for example, you can use your licence for six months before you must exchange it for a Portuguese driving licence.
When exchanging a US licence for a driving licence in Portugal, American citizens need to apply for an abstract of their driving record from their last state of residence and a physician’s certificate to prove they are fit to drive.
As Australian licences don’t have a ‘valid from’ date printed on them, citizens may need to get a document from the Australian authorities to confirm their licence start date.
If you have previously exchanged your foreign licence in another country, you are free to use your EU licence.
You can find out how exchanging a licence works for citizens from your country on the IMT website
#6
Re: PORTUGAL, does it make sense to become residents?
Great info , Tx a million regarding drivers licence info !! All is clear regard this question.
#7
BE Forum Addict
Joined: Mar 2013
Location: central Portugal
Posts: 4,111
Re: PORTUGAL, does it make sense to become residents?
Which is why my missus no longer drives. lol!
#8
BE Forum Addict
Joined: Jul 2009
Posts: 1,835
Re: PORTUGAL, does it make sense to become residents?
The surest way to guarantee zero tax is to have zero income.
#9
Re: PORTUGAL, does it make sense to become residents?
"Out of Portugal" income (such as income/gains from foreign real estate) will usually be taxed in the foreign country first and Portugal second. The relevant double taxation treaty and the NHR scheme may provide some reduction in the rates of tax(es) that will actually be charged on some specific forms of income etc but they do not offer an automatic across-the-board tax holiday.
#10
BE Forum Addict
Joined: Jul 2009
Posts: 1,835
Re: PORTUGAL, does it make sense to become residents?
While the UK may not apply withholding tax to UK bank interest paid to non-residents, I do not see why interest paid on a UK account would be tax-exempt for a beneficiary of the NHR scheme. How is it different to any other type of investment income?
#11
Re: PORTUGAL, does it make sense to become residents?
I'm not too sure about other forms of investment income but I do know for sure that for residents of Portugal, witholding tax or no, UK bank interest should be declared and taxed in Portugal. When UK witholding tax applied it was up to the taxpayer to reclaim it but paying it didn't exempt the taxpayer from declaring the interest here.
It is, however, specifically exempt from PT tax under NHR.
It is, however, specifically exempt from PT tax under NHR.
Last edited by Red Eric; Nov 15th 2017 at 6:39 pm.
#12
BE Forum Addict
Joined: Jul 2009
Posts: 1,835
Re: PORTUGAL, does it make sense to become residents?
That makes sense.
What doesn't make sense is that interest from a UK bank account would be tax-free to a beneficiary of the NHR scheme, while interest from a Portuguese bank presumably wouldn't.
Both would be equally taxable to a normal Portuguese tax-resident.
What doesn't make sense is that interest from a UK bank account would be tax-free to a beneficiary of the NHR scheme, while interest from a Portuguese bank presumably wouldn't.
Both would be equally taxable to a normal Portuguese tax-resident.
#13
BE Enthusiast
Joined: Jul 2017
Location: Algarve
Posts: 569
Re: PORTUGAL, does it make sense to become residents?
I am sorry RichardHenshall, but I have the impression that you really don't know a lot about the RNH.
#14
Re: PORTUGAL, does it make sense to become residents?
Leaving aside the aspect of whether it makes sense, he's spot on with that post.