bazzer70

Hi all
I have read possibly the last 20 pages on this forum and while most of my queries have been sort of met I thought I'd list them and hopefully you kind folk can give input:
We are taking the ferry to Santander at end of April to do a recce - heading first for Porto, then to Lisbon and then to the Algarve for 2 weeks. My partner has visited Portugal before but I never have.
1. For us weather is very important so therefore the Algarve is probably the place we should look but from reading here the Algarve doesn't seem too attractive from very many other aspects (friendliness, ease of beaurocracy, renting etc) - any thoughts? We don't want to buy for at least a year so want to rent somewhere.
2. Out BMW convertible will be moving with us. I understand we can bring it in tax free etc but what about the final test? Will there be big issues with the lights? The handbook says that the xenon headlights automatically avoids dazzling the drivers of oncoming drivers on the opposite side of the road to the country of which your car is registered (UK). Is this enough for the test? Anyone with experience of this aspect?
3. We don't plan to earn any money in Portugal so do we still have to get a fiscal number - ie register as a tax payer in Portugal? WE have a fair amount of savings currently invested in UK and this will continue earning income. Also I am on a teacher's pension which I believe will always be taxed in UK wherever I live. I am not due yet for my State pension.
There are mixed messages about applying for various permissions yourself or using an expert. I am not afraid to go the DIY route but have ZERO Portugese (yet!)
4. We don't want to buy initially (maybe never if rents are reasonable) but from this blog I sense renting is less easy and available as the housing market has picked up recently? We'd like to live where amenities are available, certainly not in some very remote area but not necessarily in a tourist area - in fact, a coastal non-tourist area would be ideal if such exists!
We will possibly not have sold our UK house when we officially move to Portugal (housing market here is VERY slow now) as we don't want to sell at a rock-bottom price and can afford to keep it going. Will owning a property in England muddy the waters on obtaining residence in Portugal or confuse the tax issues?
5.
Thanks to all who have persevered in reading this and hopefully we will hear from you soon.
Baz

Red Eric

Hi and a big welcome to the forum from me

There's a couple of things there which I can advise on : Yes, you will have to have a fiscal number whether or not you are actually liable for income tax - it's required for a number of other things besides and is a requirement for all residents (as well as some non residents).

Once resident, your worldwide income needs to be declared to the Portuguese authorities, together with any tax paid abroad. In your case, your teacher's pension if it's a public sector pension, would remain taxable only by the UK but would affect the rate at which tax on other income is calculated by PT. Savings interest and investment income arising in the UK will be taxed by PT.

One thing you should definitely investigate is the non habitual resident tax regime, which, despite the confusing name, actually applies to new full residents and under current rules would exempt you from paying any PT tax on your UK savings and investments income for a period of 10 years.

As long as you're clearly spending the majority of the year here and not living in your home in the UK, it certainly won't interfere with you being able to become resident, which is determined by your physical location and where your life is centred rather than purely and simply on where you own property.

There might be an implication on capital gains tax if you sell the property at some point after becoming resident, although the NHR may help with that (I'm not sure whether it actually can though). There are also rules on rolling over of gains on the purchase of another primary property in the EU, which could wipe out or recoup any tax liability were there to be one.

David_c

Hi there,
Hope you're doing fine.
Regarding the tax issues, I would recommend you seek professional advice from a Portuguese lawyer. It would help you understand the implications and/or possible benefits inherent with moving to Portugal, as well as the steps to take.
If you need so, do send me a message, as I know one expert in the area here in Lisbon.
Regards,
David.

007Steve

Hi there & welcome to your new life.
I'd agree with the other comments, especially over tax advice.
Hope you're search goes well,
Good luck.

liveaboard

For tax advice you need a tax accountant [in this case, one who understands cross border issues and dual tax treaties].
Not a lawyer.

Jonny22

Agree 100%. Don’t even ask your lawyer about tax issues, they haven’t got a clue though no doubt they’ll tell you differently. Got the tee shirt .

David_c

So in your opinion an accountant is better qualified to analyse and understand a convention to avoid double taxation celebrated between 2 countries than a lawyer/solicitor is? Interesting.

David_c

I understand your opinion, as you might have had a bad experience with a lawyer regarding tax matters.
However, I can assure you that there are plenty of capable lawyers experts in tax matters that are more than used to deal with matters such as NHR.

liveaboard

Emphatically, yes.
Tax rules are full of tax jargon, terms that seem obvious but in fact don't mean quite what you think they do.
A specialist tax lawyer would be advisable if you're a multinational corporation or if you have to fight in court.

For day to day regular non-litigation work and advice, the accountants are the ones who work the nuts and bolts.

But; as I said, you need one who works with expats.
The answers aren't hard to find, if you know the questions.

Loafing Along

4. We don't want to buy initially (maybe never if rents are reasonable) but from this blog I sense renting is less easy and available as the housing market has picked up recently? We'd like to live where amenities are available, certainly not in some very remote area but not necessarily in a tourist area - in fact, a coastal non-tourist area would be ideal if such exists!

Housing market has picked up but the main barrier to long term rentals are juicy income made on short term holiday lets. You will find "loads" of place available October to May but very very few for a full twelve months.
There are some sites worth browsing such as https://www.idealista.pt/en/ but the information tends to go out of date quite quickly.
Have a look around the eastern end of the Algarve plenty of small villages on the coast or near to it and loads of amenities from a mega new shopping mall at Loule to a superb fish market in Olhao.

liveaboard

And the high taxes charged on income derived from long term lets.
Inexplicably, holiday rental income pays a lower tax rate. This means that if / when a long term rental property becomes vacant, the landlord is very motivated to switch.

Pilou

I worked as a tax lawyer. I can confirm that an accountant knows much more about taxes than a lawyer, unless you find a tax lawyer!

Ukkram

I agree with everything here except one point. Having NHR status will not give any relief for investment income if it is Capital Gains as the DTA states that this is only payable to the country of residence. You will pay a hefty 28% flat rate with no exclusions or exemptions and no deductions allowed.
Tax on interest may be taxed in the UK and if it is a withholding tax then it cannot be more than 10% and if not then PT cannot charge more than 10% according to the rules of the DTA.
I did not know this so was hit with a tax bill I could live for 18 months on.

Midgo

Em Abril, águas mil
Obvious point about weather, but it is the Atlantic so its a lottery for your recce (but what can you do?)
Also, weather can change quite a lot in relatively few km (e.g. Peniche much colder than Cascais)

I (and every other immigrant I have ever met over 20 yrs) have found Lisbon extremely unsociable (in that you keep yourself to yourself) but that's in the city. Very friendly on meeting and chatting, but very difficult to make Portuguese friends (as we know it), but I suppose I did marry one

For me, more important than the weather is to make sure you get a well insulated and heated house
Also, in Summer heat can be the problem
I think renting initially makes very good sense, probably would wherever you are
The bits between Algarve - Lisbon - Porto are very different from those places, even those bits quite close to them.
Algarve better weather but very tourist orientated (with all plus and negatives that entails)

Perhaps somewhere on the Silver Coast (Costa de Prata)? São Martinho do Porto and Foz de Arelho are very nice, for example

Or Alentejo Coast (although parts are more remote - I love Costa Vicentina but wouldn't want to live there)
Trouble with recommendations is they are all subjective so I'll stop now
You will be spoiled for choice but many will be great ones

bazzer70

Thank you all for the input. We don't plan to work (ie generate any income in Portugal) but we do have funds in banks (deposit accounts, ISAs) as NHR would I have to pay tax on that (and of course my pension - which I believe can only and has to be paid in UK).
What is a "witholding tax" - currenly after allowances I pay 20% on interest earned here.
Again - thank you all for advice!