The Non-Habitual Resident (NHR) regime in Portugal is still in place as of 2024. This tax regime was introduced in 2009 to attract foreign nationals and former Portuguese residents who have not been tax residents in Portugal for the previous five years. The NHR regime offers several tax benefits, including a flat income tax rate of 20% on Portuguese-source income derived from specific professions and the possibility of tax exemptions on foreign-source income under certain conditions.

However, there have been ongoing discussions and debates about possible changes or even the potential phasing out of the NHR regime, particularly due to concerns about its impact on the real estate market and local communities. It’s advisable to stay updated on any legislative changes or consult with a tax professional if you are considering applying for or currently benefiting from the NHR status in Portugal.

As of now, the Non-Habitual Resident (NHR) regime in Portugal is still expected to be in place in 2025, although there could be potential changes. The NHR regime has been a significant attraction for foreign nationals and returning Portuguese residents, offering various tax incentives.

However, the Portuguese government has been reviewing various aspects of its tax policies, including the NHR regime. These reviews are driven by concerns about the regime’s impact on local housing markets and economic inequality. There have been discussions in political circles about reforming or possibly phasing out the NHR regime, but no definitive changes have been announced as of 2024.

For those considering the NHR status in 2025, it’s crucial to stay informed about any legal changes and consult with a tax professional to understand the latest developments. The exact status of the NHR regime in 2025 may depend on these ongoing discussions and any new legislation that might be introduced

In 2025, the Non-Habitual Resident (NHR) regime in Portugal will undergo significant changes. The government has decided to phase out the NHR regime, with the last opportunities to apply being available until March 31, 2025, under specific conditions.

The NHR program, which has been popular for offering tax incentives such as a flat 20% tax rate on certain Portuguese-sourced income and exemptions on most foreign-sourced income, will be replaced by a new regime called the Tax Incentive for Scientific Research and Innovation Program. This new program will continue to offer a 20% flat tax rate but will be limited to specific professional categories, such as teachers, scientists, and other high-skilled professionals working in sectors like IT, tourism, and manufacturing.

The transitional period allows individuals who became Portuguese tax residents in 2023 or earlier to apply for NHR status until the 2025 deadline, provided they meet criteria like having signed an employment contract or lease by the end of 2023.

These changes mark a significant shift in Portugal’s approach to attracting foreign residents, focusing more on specific high-skilled professions and less on general tax benefits for retirees and others​.

Sources: Global Citizen Solutions​ and BRIDGE IN