Pilou

In fact it is just a tax benefit and not more. The outcome of this benefit was for Portugal disappointing. It did not attract enough high qualified people, the prices for houses went up and up, the locals are not happy with this benefit and the international pressure.
The outcome of the golden visa was negative too. There were only investments in areas where they were not needed.

I can understand that the government wants to change that. Maybe the RNH will continue for high qualified people who create jobs and will stop for the pensioners.
If it does not change in 2020, it will change in the near future.

qianh

To be fair, there are lots of people want to apply for high value added activities under NHR (I have seen quite a few asked on forum) but the process is lengthy, confusing and bureaucratic. The default is no activity when you apply NHR online. That’s probably the reason why so few has registered such activity!

factseeker

Hi Everyone,

My income is from two UK based pensions- my wife and I are considering a property purchase in Portugal.

Obviously RNH is an 'attraction' - without it - if on the Portuguese system - I calculate our Tax cost would be circa three times what it is now.

We would be applying for RNH status before end February very latest.

Does anyone have the experience of the application process?

Assuming success in the application does the confirmation actually state the level of Taxation to be expected?

If the changes spoken about here occur later in 2020 I am not keen on waiting until 2021 and then finding out that I receive a +7K tax bill.

Hoping for comment.
Best Rgds

qianh

I don’t think it will state the level of tax even you applied NHR, because you will still be taxed on different level depending on your income. It’s not zero tax for everything!

factseeker

Hi gianh,

I appreciate it affects all 'income' and each type of income will be dealt with individually.

But what I am after is does an RHN acceptance detail what is to be expected for each Class of Income??

Is that available anywhere??

Also is any change within a year 'retrospective' no matter when in the year the change occur

Rgds

qianh

There is English brochure on Finanças website about NHR tax. In reality is not as simple as that but it gives you basic idea. As far as I know the change won’t be back tracked, the condition will be the same as the year you applied

Diddion

Factseeker: RNH is absurdly simple... once you have residency. All you do is register online, for online access with Finanças. Receive login details by post (mine came within a fortnight). Login. Spend half an hour trying to find where to go, then answer 3 easy questions, which takes you about a minute. That’s it.

Presumably you have a NIF, if you are buying a house.

Are you ok about the process of getting residency?

On the other question, remember that some occupational schemes remain taxable in the UK. Pm me if you need more info.

Pilou

The end of the RNH is now really around the corner ......
https://zap.aeiou.pt/governo-prepara...-fiscal-303347

Diddion

I wonder if existing beneficiaries of RNH will be swept up in the new tax. The article suggest possibly so, but that could be as a result of sloppy language.

AlgarveAndy

It would be very useful to know these two levels of proposed taxation, does anyone have access to the official proposal tabled by the PT party?

Cortiz

Would this only apply to pensioners? What about semi-self employed people living mainly on passive income? I.e., not of retirement age and not on a pension.

qianh

I got the email from my accountant mentioning this change may be on the horizon. I can understand 10% tax but minimum 7500 per year is baffling, what if you have modest pension, say like 1000 per month , isn’t it better just paying normal income tax?

wellinever

nothing sould baffle you about Portuguese IRS

Diddion

I have no doubt that the 7500 figure is incorrect, as no income tax anywhere has such a minimum. I suspect that tax may be levied on an income above 7500 euros, and everyone is just repeating and copying from an erroneous source.

I have seen, today in a Swedish publication, the statement that changes would not be backdated and would apply from 1 March. If so, and if applicable to existing NHR holders of pension funds, there will be clear advantages to taking proceeds before that date. Note that Blevins Franks (unsubstantiated elsewhere, to my knowledge), say that if a pension is fully encashed within 10 years it may become taxable . It could be a wise precaution to leave some funds in place.

I wonder if other income, such as UK rental income, is also being scutinised.

dingg

Diddion
I don't think, if it happens, that it will be applicable to those already in the system but only to new sign ups.
Eta
Do you have a link to the article?