In a significant policy shift, Portugal’s government has announced plans to end tax incentives for foreigners and digital nomads (non-habitual residents) from 2024.
Prime Minister Antonio Costa confirmed in a recent interview with CNN Portugal that the scheme, which provides lower taxes for non-habitual residents for ten years, will be discontinued. However, those who already benefit from the programme will keep their incentives.
Digital Nomads Still Welcome
If you’re a digital nomad and have Portugal on your radar, there’s no need to worry! The new policy will only come into force in 2024, and those who already have non-habitual resident status will still be able to enjoy the existing benefits. So those of you who have always dreamed of working with a view of Portugal’s charming rooftops still have time!
Modernising Policies
The decision to adjust fiscal policy was not arbitrary. According to Costa, the tax incentives were very useful to a certain extent, but in the future they could lead to tax injustice and inflate the property market. The move follows a similar decision made earlier this year, when the country decided to overhaul the “golden visa” programme, which grants visas to foreigners who buy property.
Impact on the property market
Proponents of these changes argue that they will help balance the property market in Portugal, preventing prices from overheating. As of July this year, around 89,000 foreigners were using the non-habitual resident programme, and the new policy aims to ensure a more sustainable balance between foreigners and natives.
So if you’ve been eyeing Portugal as your next destination, there’s no need to panic! Portugal continues to be a welcoming country, with its rich culture, beautiful landscapes and friendly people. The change in policies is simply a sign that Portugal is growing and adapting to the new realities of its property market and the needs of its population. So keep your good Portuguese Port wine handy and keep dreaming of sunny days in Praia da Rocha!
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