Taxation and Succession

Insights into what is involved in buying, selling & living in Portugal

Non Habitual Residence

ABOUT THE REGIME The Portuguese Non-Habitual Residency status enables those who become tax resident in Portugal, and are accepted as NHR, the opportunity to receive qualifying income tax free both in Portugal and in the country of source of the income. The NHR regime represents a major step forward in making Portugal a tax free jurisdiction for individuals in receipt of qualifying non-resident income. Read more →

Capital Gains Tax on Rental properties

Owners of holiday rental properties face Capital Gains Tax blow Two news items relating to the Alojamento Local (AL) registration system for those property owners involved in short-term lettings to tourists further have reduced the chances of anyone registering without being forced to. Owners who have their AL licence and who later remove their property from the scheme, for whatever reason, then are liable to pay capital gains tax, whether they are selling their property or not. Read more →

Capital Gains Tax

CGT: Older Properties and Unauthorised Improvements Many property owners who acquired their homes in Portugal in years gone by face a common dilemma: they bought at a time when real estate was dirt cheap. These houses were often primitive and in poor condition, requiring substantial renovations. In those days, it was common practice to do the work and worry about the formalities later: no building permits, no formal plans, no invoices issued or kept. Read more →

AIMI Tax

As a relatively new tax, it is not surprising that many have been caught unaware of their liability to pay AIMI and, more importantly, how they can avoid the disturbing consequences. The additional assessment to IMI (Adicional Imposto Municipal Imobiliário) is sending shock waves to individuals and company owners who unwittingly find themselves under the weight of this added fiscal obligation. Read more →

Tax Example on Rental Income

Non-resident couple´s rental income(1) Monthly Rental Income(2) 1,500 6,000 12,000 Annual Rental Income 18,000 72,000 144,000 Less Expenses(3) (1,000) (3,000) (6,000) = Taxable Income 17,000 60,000 138,000 Income Tax(4) Flat Rate 28% 4,760 19,320 38,640 Annual Income Tax Due 4,760 19,320 38,640 Tax Due as % of Gross Income 26. Read more →

A.I.M.I. Additional Rates Tax

A.I.M.I. or additional I.M.I. (rates) At the end of December 2016 the Portuguese parliament as part of the yearly State budget related to 2017 approved a new law also known as: DL 42/2016 of 28-12-2016. In future we will refer to this as A.I.M.I. which stands for “Adicional Imposto Municipal Imobiliário” a complementary tax to the I. Read more →

Non Habitual Residence (10 years exemption)

Non-habitual residents Portuguese special tax regime Introduction Portugal created a special personal income tax regime for new residents which offers attractive tax opportunities for foreign pensioners. This summary provides a brief overview and explains the main guidelines and potential implications of this regime for foreigners and Portuguese individuals settling in Portugal after an extended period of living abroad. Read more →

New austerity measures

Salaries go down as Social Security goes up Private workers will lose one salary, whilst public employees will lose two It was the first time that a Government measure was received with such unanimous opposition, but when Pedro Passos Coelho announced last Friday (September 7) that all workers would see their monthly contribution to Social Security increase by seven percentage points as of 2013, everyone – regardless of their political stance – agreed to disagree with the Portuguese Prime Minister. Read more →

Evaluations of older properties

In December 2003, new rules concerning municipal property tax (Imposto Municipal sobre Imóveis) came into force. A new code was also approved: the Código do Imposto Municipal Sobre Imóveis (CIMI). Those new rules were created to assess the patrimonial value of urban properties closer to their real market value. Therefore, almost all new properties completed or traded after December 1 2003 were already evaluated according to the 37th article and the following ones of CIMI. Read more →