NHR status portugal
Apr 27th 2018, 7:10 pm
#31
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Re: NHR status portugal
Eric, you are a northerner, things are different in the south , where most expats have property.
There is actually a shortage of decent new listings in the Algarve.
New estate agent branches are popping up like mushrooms.
They are having their best years since pre recession.
Agents are employing French French speakers to cope with demand.
It would be interesting to see the numbers, nationalities and location of those in receipt of NHR.
I still believe that if nothing else it has distorted the property market, and that all the reasons for its creation no longer exist.
It is time to amend it, not remove it.
Min spend of E200k as one example.
But none of this matters if home countries tighten up on the tax free export of income which may be more likely than the end of NHR.
There is actually a shortage of decent new listings in the Algarve.
New estate agent branches are popping up like mushrooms.
They are having their best years since pre recession.
Agents are employing French French speakers to cope with demand.
It would be interesting to see the numbers, nationalities and location of those in receipt of NHR.
I still believe that if nothing else it has distorted the property market, and that all the reasons for its creation no longer exist.
It is time to amend it, not remove it.
Min spend of E200k as one example.
But none of this matters if home countries tighten up on the tax free export of income which may be more likely than the end of NHR.
Pensioners are a minor issue in the global context of what the Portuguese government was trying to do to boost their economy .
Apr 27th 2018, 7:12 pm
#32
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Re: NHR status portugal
By focusing on pensioners and NHR we are overlooking the real purpose of the legislation when it was introduced which was to offer an attractive low tax rate to foreign entrepreneurs and certain skilled professions . In effect it was modelled on and very similar to the Spanish tax legislation, introduced in 2004, which became known as "The Beckham Clause " as he made it famous when he signed for Real Madrid.
Pensioners are a minor issue in the global context of what the Portuguese government was trying to do to boost their economy .
Pensioners are a minor issue in the global context of what the Portuguese government was trying to do to boost their economy .
Until it was opened up to pension incomes from 2014 and the retirement market applications were measured in 100s, rapidly increasing to thousands.
No coincidence that this waz when the property market jumped on the band wagon.
Last edited by EMR; Apr 27th 2018 at 8:09 pm.
Apr 27th 2018, 8:17 pm
#33
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Re: NHR status portugal
I have a long enough association with Portugal and visit other areas of the country often enough to be in a position to notice the vastly accelerated changes which have occurred recently and to be able to pinpoint some of the reasons for them through my consumption of several hectares of print news per week topped off with generous daily helpings of broadcast news and current affairs programmes on radio and TV.
That's odd - just above you were objecting to it supposedly being of benefit only to wealthy people.
), which are having a detrimental effect on the Portuguese economy?OK then **shrugs**
Before you get completely the wrong impression, by the way, I have said previously that I'm totally opposed to such schemes. I'd happily kiss goodbye to them tomorrow. I just don't see that it should be done without careful consideration or unilaterally. It looks as though whatever the desired effects and whether they've been achieved, it's caused enough of a stir to be used as a bargaining chip and Lord knows, Portugal needs those.
Last edited by Red Eric; Apr 27th 2018 at 8:21 pm.
Apr 27th 2018, 8:23 pm
#34
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Re: NHR status portugal
My home location has nothing to do with anything.
I have a long enough association with Portugal and visit other areas of the country often enough to be in a position to notice the vastly accelerated changes which have occurred recently and to be able to pinpoint some of the reasons for them through my consumption of several hectares of print news per week topped off with generous daily helpings of broadcast news and current affairs programmes on radio and TV.
That's odd - just above you were objecting to it supposedly being of benefit only to wealthy people.
You think that 50 year old tax treaties based on the OECD double taxation convention should be torn up rather than some sort of negotiation take place in which Portugal cedes a small amount of gound on the issue in return for similar amendments to some of the more predatory regimes in existence in the EU (and not necessarily just personal taxation), which are having a detrimental effect on the Portuguese economy?
OK then **shrugs**
Before you get completely the wrong impression, by the way, I have said previously that I'm totally opposed to such schemes. I'd happily kiss goodbye to them tomorrow.
I have a long enough association with Portugal and visit other areas of the country often enough to be in a position to notice the vastly accelerated changes which have occurred recently and to be able to pinpoint some of the reasons for them through my consumption of several hectares of print news per week topped off with generous daily helpings of broadcast news and current affairs programmes on radio and TV.
That's odd - just above you were objecting to it supposedly being of benefit only to wealthy people.You think that 50 year old tax treaties based on the OECD double taxation convention should be torn up rather than some sort of negotiation take place in which Portugal cedes a small amount of gound on the issue in return for similar amendments to some of the more predatory regimes in existence in the EU (and not necessarily just personal taxation
), which are having a detrimental effect on the Portuguese economy?OK then **shrugs**
Before you get completely the wrong impression, by the way, I have said previously that I'm totally opposed to such schemes. I'd happily kiss goodbye to them tomorrow.
No rentals, no buying the cheapest available with no intention of living in it for more than the minimum if that.
Sweden and now Finland have agreed new taxation treaties, nothing was torn up.
Apr 27th 2018, 8:28 pm
#35
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Re: NHR status portugal
What they were trying to do and what has happened due to a very good marketing job by the property market and financial advisors are two different things.
Until it was opened up to pension incomes from 2014 and the retirement market applications were measured in 100s, rapidly increasing to thousands.
No coincidence that this waz when the property market jumped on the band wagon.
Until it was opened up to pension incomes from 2014 and the retirement market applications were measured in 100s, rapidly increasing to thousands.
No coincidence that this waz when the property market jumped on the band wagon.
The property market suffered a load of other alterations due to the input of the troika during the so-called bailout, which wanted it to become more "dynamic" without any regard to the effects on people with limited incomes and very long-standing tenancy agreements, nor, indeed, to the relationship between local wages and the effects of their changes on the price of properties. They hacked them to pieces.
Apr 27th 2018, 8:36 pm
#36
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Re: NHR status portugal
If they're interested in something other than the property market, for example repopulating areas which are becoming deserted, why would they not want to keep it open and indiscriminatory in terms of income and wealth?
Apr 27th 2018, 8:46 pm
#37
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Re: NHR status portugal
It was 2012 when the amendments with regard to NHR and pensions were effected.
The property market suffered a load of other alterations due to the input of the troika during the so-called bailout, which wanted it to become more "dynamic" without any regard to the effects on people with limited incomes and very long-standing tenancy agreements, nor, indeed, to the relationship between local wages and the effects of their changes on the price of properties. They hacked them to pieces.
The property market suffered a load of other alterations due to the input of the troika during the so-called bailout, which wanted it to become more "dynamic" without any regard to the effects on people with limited incomes and very long-standing tenancy agreements, nor, indeed, to the relationship between local wages and the effects of their changes on the price of properties. They hacked them to pieces.
It was for many the biggest shot in the arm they had for years.
You are right it provided a very welcome boost to tax income .
The market was not just in the doldrums it was on its knees.
Apr 28th 2018, 6:01 am
#38
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Re: NHR status portugal
Do you mind not atttributing to me things I haven't said? What I said was that the troika foist changes other than NHR onto Portugal which had drastic effects on the property market and I said nothing at all about increased tax revenues.
However, the prices of properties, even then, were not low. Small 2 bed townhouses in the centres of places such as Tavira or the more out-of-the-way Santa Luzia, for example had already undergone something of a revolution over previous years to the point where they were way beyond the average local purse.
Far more drastic effects have been visible in the centres of Lisbon and Porto, now a long way through the process of "rejuvenation" in the form of the turfing out of traditional residents from their rented accommodation to make way for thousands of more profitable AL units and all the joys those bring.
Going back to the link which sparked off this discussion, the Bloco Esquerda is keen to associate NHR with those changes in its admirable quest to get the regime abolished. But there's a great deal more to it than that in my opinion - just look at the massive changes to the very much in vogue Lisbon and Porto in recent years in terms of visitor numbers and long-planned alterations to the infrastructure etc. NHR might be a useful thing to focus resentment on but it's a good deal more than that which is driving the changes and removing it wouldn't have a noticeable effect on its own, satisfying though it would be to see the back of it.
However, the prices of properties, even then, were not low. Small 2 bed townhouses in the centres of places such as Tavira or the more out-of-the-way Santa Luzia, for example had already undergone something of a revolution over previous years to the point where they were way beyond the average local purse.
Far more drastic effects have been visible in the centres of Lisbon and Porto, now a long way through the process of "rejuvenation" in the form of the turfing out of traditional residents from their rented accommodation to make way for thousands of more profitable AL units and all the joys those bring.
Going back to the link which sparked off this discussion, the Bloco Esquerda is keen to associate NHR with those changes in its admirable quest to get the regime abolished. But there's a great deal more to it than that in my opinion - just look at the massive changes to the very much in vogue Lisbon and Porto in recent years in terms of visitor numbers and long-planned alterations to the infrastructure etc. NHR might be a useful thing to focus resentment on but it's a good deal more than that which is driving the changes and removing it wouldn't have a noticeable effect on its own, satisfying though it would be to see the back of it.
Apr 28th 2018, 8:14 am
#39
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Re: NHR status portugal
Do you mind not atttributing to me things I haven't said? What I said was that the troika foist changes other than NHR onto Portugal which had drastic effects on the property market and I said nothing at all about increased tax revenues.
However, the prices of properties, even then, were not low. Small 2 bed townhouses in the centres of places such as Tavira or the more out-of-the-way Santa Luzia, for example had already undergone something of a revolution over previous years to the point where they were way beyond the average local purse.
Far more drastic effects have been visible in the centres of Lisbon and Porto, now a long way through the process of "rejuvenation" in the form of the turfing out of traditional residents from their rented accommodation to make way for thousands of more profitable AL units and all the joys those bring.
Going back to the link which sparked off this discussion, the Bloco Esquerda is keen to associate NHR with those changes in its admirable quest to get the regime abolished. But there's a great deal more to it than that in my opinion - just look at the massive changes to the very much in vogue Lisbon and Porto in recent years in terms of visitor numbers and long-planned alterations to the infrastructure etc. NHR might be a useful thing to focus resentment on but it's a good deal more than that which is driving the changes and removing it wouldn't have a noticeable effect on its own, satisfying though it would be to see the back of it.
However, the prices of properties, even then, were not low. Small 2 bed townhouses in the centres of places such as Tavira or the more out-of-the-way Santa Luzia, for example had already undergone something of a revolution over previous years to the point where they were way beyond the average local purse.
Far more drastic effects have been visible in the centres of Lisbon and Porto, now a long way through the process of "rejuvenation" in the form of the turfing out of traditional residents from their rented accommodation to make way for thousands of more profitable AL units and all the joys those bring.
Going back to the link which sparked off this discussion, the Bloco Esquerda is keen to associate NHR with those changes in its admirable quest to get the regime abolished. But there's a great deal more to it than that in my opinion - just look at the massive changes to the very much in vogue Lisbon and Porto in recent years in terms of visitor numbers and long-planned alterations to the infrastructure etc. NHR might be a useful thing to focus resentment on but it's a good deal more than that which is driving the changes and removing it wouldn't have a noticeable effect on its own, satisfying though it would be to see the back of it.
I think you over dramatise what is happening in Lisbon and Porto.
But for the changes you do not approve of the decline in housing the quality of life in Portugal would have continued.
NHR as originally conceived was a good idea , attracting those with capital to base their economic activities, their business in Portugal.
But as it has become a way of providing a tax free environment for those looking for a second home it is now time for change.
On that I am sure we agree.
Apr 28th 2018, 1:15 pm
#40
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Re: NHR status portugal
NHR as originally conceived was a good idea , attracting those with capital to base their economic activities, their business in Portugal.
But as it has become a way of providing a tax free environment for those looking for a second home it is now time for change.
On that I am sure we agree.
But as it has become a way of providing a tax free environment for those looking for a second home it is now time for change.
On that I am sure we agree.
Even in its first incarnation it was clear that it was intended to exempt foreign-sourced income from PT tax and as the majority of older DTAs follow the OECD model by way of which such income is generally taxed in the country of residence, the intention all along was to offer a "tax holiday" as an inducement to lure new residents. The notion that that is an unintended side effect is completely false.
Nor can I see it as an inducement for anyone to move a business to Portugal, since any business activity based here would be taxed as any other resident business is (unless they were self-employed in the categories listed in the NHR occupations list, and got the 20% flat rate tax)
I also don't know about people acquiring 2nd homes as a way of being granted the status - as far as I am aware, it was and is a requirement that one takes up residence ie spends a minimum of 183 days or has one's habitual residence in Portugal, although whether that's actually monitored I couldn't possibly say. Furthermore, one doesn't have to purchase a property at all in order to qualify for the status and that is also entirely intentional and not, as you have previously suggested, some sort of unintended loophole.
In fact, I'm having trouble agreeing with anything much you say because it's all so inconsistent. On the one hand you're claiming that it was all devised to revitalise the property market but that has now been achieved so there's no longer any need for it. Then you say it ought to carry on but only for people with 200k to spend on a property, despite this also contradicting what you said about handing out sweeties to wealthy people. You also want the tax treaties re-written so that it doesn't actually confer any tax benefit, which would seem to me to completely wipe out any reason for applying for it.
All a bit
as well as being well off the original topic.Just going back to the bit where we veered off, incidentally - ie the possibility of the amending of the scheme - the last mention of any changes that I remember, back during last year's budget negotiations, suggested that the Finance Minister was looking at possibly levying a tax of 5% or 10% on income that's currently tax-exempt, rather than anything approaching what you're suggesting. Obviously with internal and external negotiations now being brought to bear on the matter that might now be well wide of what's possibly in store but that was what was rumoured back then.
Apr 28th 2018, 2:30 pm
#41
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Re: NHR status portugal
No, I can't agree with that.
Even in its first incarnation it was clear that it was intended to exempt foreign-sourced income from PT tax and as the majority of older DTAs follow the OECD model by way of which such income is generally taxed in the country of residence, the intention all along was to offer a "tax holiday" as an inducement to lure new residents. The notion that that is an unintended side effect is completely false.
Nor can I see it as an inducement for anyone to move a business to Portugal, since any business activity based here would be taxed as any other resident business is (unless they were self-employed in the categories listed in the NHR occupations list, and got the 20% flat rate tax)
I also don't know about people acquiring 2nd homes as a way of being granted the status - as far as I am aware, it was and is a requirement that one takes up residence ie spends a minimum of 183 days or has one's habitual residence in Portugal, although whether that's actually monitored I couldn't possibly say. Furthermore, one doesn't have to purchase a property at all in order to qualify for the status and that is also entirely intentional and not, as you have previously suggested, some sort of unintended loophole.
In fact, I'm having trouble agreeing with anything much you say because it's all so inconsistent. On the one hand you're claiming that it was all devised to revitalise the property market but that has now been achieved so there's no longer any need for it. Then you say it ought to carry on but only for people with 200k to spend on a property, despite this also contradicting what you said about handing out sweeties to wealthy people. You also want the tax treaties re-written so that it doesn't actually confer any tax benefit, which would seem to me to completely wipe out any reason for applying for it.
All a bit as well as being well off the original topic.
Just going back to the bit where we veered off, incidentally - ie the possibility of the amending of the scheme - the last mention of any changes that I remember, back during last year's budget negotiations, suggested that the Finance Minister was looking at possibly levying a tax of 5% or 10% on income that's currently tax-exempt, rather than anything approaching what you're suggesting. Obviously with internal and external negotiations now being brought to bear on the matter that might now be well wide of what's possibly in store but that was what was rumoured back then.
Even in its first incarnation it was clear that it was intended to exempt foreign-sourced income from PT tax and as the majority of older DTAs follow the OECD model by way of which such income is generally taxed in the country of residence, the intention all along was to offer a "tax holiday" as an inducement to lure new residents. The notion that that is an unintended side effect is completely false.
Nor can I see it as an inducement for anyone to move a business to Portugal, since any business activity based here would be taxed as any other resident business is (unless they were self-employed in the categories listed in the NHR occupations list, and got the 20% flat rate tax)
I also don't know about people acquiring 2nd homes as a way of being granted the status - as far as I am aware, it was and is a requirement that one takes up residence ie spends a minimum of 183 days or has one's habitual residence in Portugal, although whether that's actually monitored I couldn't possibly say. Furthermore, one doesn't have to purchase a property at all in order to qualify for the status and that is also entirely intentional and not, as you have previously suggested, some sort of unintended loophole.
In fact, I'm having trouble agreeing with anything much you say because it's all so inconsistent. On the one hand you're claiming that it was all devised to revitalise the property market but that has now been achieved so there's no longer any need for it. Then you say it ought to carry on but only for people with 200k to spend on a property, despite this also contradicting what you said about handing out sweeties to wealthy people. You also want the tax treaties re-written so that it doesn't actually confer any tax benefit, which would seem to me to completely wipe out any reason for applying for it.
All a bit
as well as being well off the original topic.Just going back to the bit where we veered off, incidentally - ie the possibility of the amending of the scheme - the last mention of any changes that I remember, back during last year's budget negotiations, suggested that the Finance Minister was looking at possibly levying a tax of 5% or 10% on income that's currently tax-exempt, rather than anything approaching what you're suggesting. Obviously with internal and external negotiations now being brought to bear on the matter that might now be well wide of what's possibly in store but that was what was rumoured back then.
Remove the rental option and those who buy the cheapest they can find just to achieve that status.
It's the lower end of the housing market that affects the Portuguese more than the overseas buyer .
I agree applying a reduced tax rate removing the zero rate would be another way forward.
My premise as to its original aim is based on the literature promoting it before the " pension " position was opened up.
2009 to the date you gave of 2012.
Apr 28th 2018, 3:31 pm
#42
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Re: NHR status portugal
I'm afraid I have to jump in here and give a different perspective on these two comments. Those without a decent or any pension as yet may well be buying the cheapest possible whilst (vaguely) habitable in order to retain investment overseas to provide the income on which to live, spending that money here that otherwise wouldn't come to Portugal. Certainly outside of the Algarve, Lisbon and Porto there is no shortage of housing, lower end of market or otherwise. Houses are being inhabited that otherwise would continue to be vacant and quickly become derelict; much better that they be inhabited by ex-pats bringing even a relatively modest overseas-sourced income into the local economy - win win. This could be seen as the equivalent of permanent tourism or as Portugal as a company dealing in exports. Outside of the hotspots, desertification and falling population is a real issue. So there is definitely evident benefit to attracting younger, sem pension but self-supporting expats into the vast rural areas. I'll leave others to discuss the merits of other demographics.
Apr 28th 2018, 4:12 pm
#43
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Re: NHR status portugal
I'm afraid I have to jump in here and give a different perspective on these two comments. Those without a decent or any pension as yet may well be buying the cheapest possible whilst (vaguely) habitable in order to retain investment overseas to provide the income on which to live, spending that money here that otherwise wouldn't come to Portugal. Certainly outside of the Algarve, Lisbon and Porto there is no shortage of housing, lower end of market or otherwise. Houses are being inhabited that otherwise would continue to be vacant and quickly become derelict; much better that they be inhabited by ex-pats bringing even a relatively modest overseas-sourced income into the local economy - win win. This could be seen as the equivalent of permanent tourism or as Portugal as a company dealing in exports. Outside of the hotspots, desertification and falling population is a real issue. So there is definitely evident benefit to attracting younger, sem pension but self-supporting expats into the vast rural areas. I'll leave others to discuss the merits of other demographics.
Silves has a scheme within the old city.
Incentives for those bringing back land into use again exist.
Adding the additional zero tax benefit is perhaps guilding the Lilly.
Apr 28th 2018, 6:18 pm
#44
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Re: NHR status portugal
I'm afraid I have to jump in here and give a different perspective on these two comments. Those without a decent or any pension as yet may well be buying the cheapest possible whilst (vaguely) habitable in order to retain investment overseas to provide the income on which to live, spending that money here that otherwise wouldn't come to Portugal. Certainly outside of the Algarve, Lisbon and Porto there is no shortage of housing, lower end of market or otherwise. Houses are being inhabited that otherwise would continue to be vacant and quickly become derelict; much better that they be inhabited by ex-pats bringing even a relatively modest overseas-sourced income into the local economy - win win. This could be seen as the equivalent of permanent tourism or as Portugal as a company dealing in exports. Outside of the hotspots, desertification and falling population is a real issue. So there is definitely evident benefit to attracting younger, sem pension but self-supporting expats into the vast rural areas. I'll leave others to discuss the merits of other demographics.
Apr 28th 2018, 6:22 pm
#45
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Re: NHR status portugal
Exactly right and it's the pressure at the range starting at around the figure EMR's suggesting as a qualifying figure and continuing way above that's causing a lot of the problems in metropolitan areas for longstanding existing tenants who are finding themselves facing massive rent increases or being served with eviction notices. Around a quarter of properties in those areas are foreign owned with plenty more waving wads of money wanting a piece of the action.