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D7 Passive Income Visa

D7 Passive Income Visa

Old Sep 22nd 2023, 11:49 am
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Default D7 Passive Income Visa

Hi there,

Is it possible to purchase property and reside on Madeira using a P7 visa? What are the age and income requirements for a couple? Any pitfalls of this type of visa?

Many thanks for any guidance.
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Old Sep 22nd 2023, 1:37 pm
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Default Re: D7 Passive Income Visa

I presume that should be D7 in the text, as in the thread title.

Yes, you can go anywhere on the mainland or in the autonomous regions - you'll need to convert the visa to a residence permit after arrival. There are no age barriers. The means requirement for the D7 is that you have passive income at least equivalent to the minimum wage, which is 760€ per month for 2023 and will be rising to 810€ in January. That figure is for a single person - add 50% for a 2nd adult.

You can buy property whether or not you have permission to reside.
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Old Sep 23rd 2023, 5:30 pm
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Default Re: D7 Passive Income Visa

Originally Posted by Red Eric
I presume that should be D7 in the text, as in the thread title.

Yes, you can go anywhere on the mainland or in the autonomous regions - you'll need to convert the visa to a residence permit after arrival. There are no age barriers. The means requirement for the D7 is that you have passive income at least equivalent to the minimum wage, which is 760€ per month for 2023 and will be rising to 810€ in January. That figure is for a single person - add 50% for a 2nd adult.

You can buy property whether or not you have permission to reside.
Much obliged for the response.

Does the residence confer NHR status and thereafter 10% taxation on overseas income? Is 10% taxation absent any personal allowances, as per the UK?
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Old Sep 23rd 2023, 5:59 pm
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Default Re: D7 Passive Income Visa

Originally Posted by smallpiff
Does the residence confer NHR status and thereafter 10% taxation on overseas income? Is 10% taxation absent any personal allowances, as per the UK?
It's not automatically conferred, no. You have to apply for it by 31st March in the year after you become tax resident. As I understand it, the online application process is very simple and quick, although that doesn't necessarily mean that all income you receive will qualify.

The 10% rate applies specifically to pensions from overseas. Most other (particularly passive) income arising outside PT would be free of PT tax under NHR, provided it could be taxed in the country of origin (that doesn't mean is taxed there - just that it could be). I think I'm right in saying the pension does benefit from something akin to a personal allowance - to the tune of 4,104€, which is deducted from the gross paid prior to calculation of the 10%. Other allowances allowed under the general taxation regime are, I think, not conceded under this regime (those would be deductibles from the gross tax due, on the basis of certain types of expenditure).

Pensions from most public sector bodies in the UK (but not the State Pension) would be subject to tax only in the UK and with the benefit of the UK personal allowance. The rest, only in PT.

The above is just rough guidance. I'm not / never have been a benficiary of NHR, so know very little about it, nor am I any sort of expert or advisor.
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Old Sep 24th 2023, 11:55 am
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Default Re: D7 Passive Income Visa

Again thanks,

Final question for now. If residing on an NHR visa is it acceptable to let ones Portugal property out for a limited amount of time (for example airbnb), subject to the 20% local tax, also maintaining sufficient time in country (183 days per year).

thank you
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Old Sep 24th 2023, 5:07 pm
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Default Re: D7 Passive Income Visa

I'll give you what little I can on that in the hope that someone with actual experience or knowledge steps in with more.

First off, NHR is not a visa - it's a tax regime. Your residency is granted via, in the first instance, your obtaining a visa which allows you to apply for a resident permit. That permit will also allow you to work in Portugal either as an employee or self-employed and it may be that holiday letting falls under the scope of the latter. Eaxactly how the income would be treated and whether it falls within the scope of the NHR regime, I don't know. If it doesn't, it just means it would be taxed at normal rates, not that you couldn't do it.

You would have to have the property registered and licensed for short term letting, so it would need to conform to all the requirements. I think you also have to register the activity with the tax authority prior to starting letting and comply with whichever regime you choose to do that under (I think there's a choice to be made there).There may be pitfalls in mixing holiday letting in with it being your primary dwelling with regard to any property tax breaks and possibly to capital gains tax treatment should you subsequently decide to sell.

Bit vague, I'm afraid but that's about the sum total of my knowledge on the matter. somebody better-informed can add to that.
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Old Sep 25th 2023, 7:32 am
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Default Re: D7 Passive Income Visa

An afterthought.

You mention 20% local tax in your last question. That flat tax rate is, I believe, for earnings from high value added work undertaken in Portugal according to a defined list of categories.

Holiday letting wouldn't come under that but there are, I believe, other concessions which would mean not paying tax on all of the income.
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Old Oct 3rd 2023, 9:02 am
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Default Re: D7 Passive Income Visa

And one further point which may be of relevance.

In a live TV interview last night, the Prime Minister announced the end of the NHR tax regime, to be enacted in next year's budget. So if you want to benefit from that, you'll need to be resident before the end of this year.
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Old Oct 3rd 2023, 9:32 am
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Default Re: D7 Passive Income Visa

Originally Posted by Red Eric
And one further point which may be of relevance.

In a live TV interview last night, the Prime Minister announced the end of the NHR tax regime, to be enacted in next year's budget. So if you want to benefit from that, you'll need to be resident before the end of this year.

LOL.....Red, what did I tell you 5 or 6 years ago.......sprat to catch a mackerel.
Net is now so full its bursting and the only benefit to PT has been house price IMT values.
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Old Oct 3rd 2023, 12:42 pm
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Default Re: D7 Passive Income Visa

Originally Posted by wellinever
LOL.....Red, what did I tell you 5 or 6 years ago.......sprat to catch a mackerel.
Net is now so full its bursting and the only benefit to PT has been house price IMT values.
Not sure what's occasioned the cackling but I'll refrain from responding any more about that on this thread out of deference to the thread starter and their particular requests for info.

I'll start another thread - we could probably do with somewhere to have a bit of a free-for-all on the subject in general
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