June W

I was reading the rules on applying for NHR and was a bit confused about some issues, they are about tax status and timing:

1) If you get a Tax ID number does it mean you have to submit tax declaration every year. I mean should should I wait until I am ready to buy the house/car/etc.
2) Does buying a house make me a tax resident (for NHR purposes). Should I hold off buying the house until after I apply for NHR? I was thinking of buying the house first as a holiday home for the first 6 months then doing the NHR application.
3) I understand I should sell my current (overseas) property before permanently relocating (become tax resident) to Portugal for tax minimisation? Is this right.

Are there any specific things I should not do before applying for NHR?


I will be getting a lawyer to take me through the actual process but I am not quite there yet as CVID is keeping me away still (travel rules as I am currently back in Asia)

Thanks

m2m2012

To get NHR you must actually move to Portugal (buy or long term rent a house/apartment) and stay at least 183 days in a year...doing this would also make you a tax resident. Once this has been done you then can apply for NHR the following year. You cannot apply for NHR as soon as you arrive in Portugal.

m2m2012

About tax id no. (NIF) read this thread:

NHR 20% Flat Rate - Again

To avoid problems you need to understand how the system works in both theory and in practice; and be proactive.

Rambling archer

1) The NIF tax number is needed to open a bank account, rent (long-term) a property, buy a property, and do various financial things in Portugal. So it is one of the first things you do when considering establishing yourself in Portugal. But it does not mean you are tax resident - that relates to other criteria. You only need to do a tax declaration in Portugal when you have tax matters to declare.
2) Buying a house in itself cannot make you tax resident. There are many people who have holiday homes, or property for rental income, who are non-resident in Portugal. There will be some consequences like the need to pay local taxes on the property (which the national tax office deal with on the local authority's behalf) and this is why non-resident property owners (who are also not resident in the EU) must appoint a Fiscal Representative (who can be anybody who is Resident in Portugal and agrees officially to be responsible if you fail in your fiscal requirements) so Portugal has someone to chase inside the country. However, if it is your intention at the end of the first six months to then convert from being non-resident, to resident, questions might well be asked - there is a timeline for establishing residency .... also if you are not an EU citizen then normally you need to go through a visa process from OUTSIDE Portugal to make your application for becoming Resident.

3) Not sure why you would need to sell other property (you might want to keep that as a holiday home??_!! or as a rental income ??, or whatever. BUT you might need to get advice as to whether Capital Gains Tax might be relevant in the sale of other property outside Portugal and where/how to put the proceeds of such sale, or if you need it in Portugal. More important might be the timing of your move to Portugal in relation to the tax year (or part of) in the country you are moving from.

NOTE that NHR status is merely a tax status available for residents of Portugal fulfilling certain criteria - nothing to do with property ownership, citizenship ... It is actually the last thing you do in this process.
Also note that if you are not a citizen or resident of an EU country, there is a limitation of 90 days spent within any 180-day period to be in the Schengen-listed countries of the EU so an idea of being in your new house for 6 months before declaring yourself as resident would clash with that, as well as the need to sort out a Visa if you did want to do 6 months in Portugal, which would clash with your eventual request for Visa to apply for full Residency ... Better to make a decision at an early stage as to whether you want a holiday home in Portugal, or whether you want to move here on a permanent (or at least several years) basis.
I note you are "back in Asia" but are you UK citizen/resident or other?

m2m2012

A NHResident I think does not pay tax on foreign Capital Gains.

m2m2012

If she gives a Portuguese address when applying for the NIF she will be considered a tax resident regardless of other criteria; as the link above shows.

June W

I am a retired UK national but don't live there. I live in Asia most of the year but want to return to live closer to UK but not in the UK for weather reasons. Portugal and the NHR offer me the best option for next 10 years. The property selling was about Capital gains, but I may have been getting mixed up with Spain.

m2m2012

Without an EU passport it isn't easy to move to live in Portugal.