Portugal’s property market is booming among international buyers, and the sun, sea and relaxed lifestyle are, perhaps surprisingly, only half the story. Portugal is also making headlines for the incentives it offers overseas buyers, from fast-track residency to special tax regimes. Here’s our round-up of what’s happening.
Golden visa scheme
Portugal’s golden visa, or residency by investment scheme, is immensely popular among buyers from overseas, including from China and Russia. It offers temporary residency in return for purchase of a property of over €500,000 or more. This residency comes in the form of firstly a one-year permit and then two two-year permits, adding up to five years in total. These five years provide the basic requirement to then apply for permanent residency or even citizenship.
This way, you essentially skip the requirement to have work or a certain income, and you don’t have to live full-time in the country. In the first year, you only need to spend one week in Portugal and, in the second and subsequent years, only two weeks. Another bonus? You can extend the residency – and therefore EU residency – to your family members, too.
Application time normally takes around five to six months, and a lawyer would charge around €5,000 to help you with it.
Non-habitual tax residency scheme
The non-habitual tax residency scheme offers extremely generous tax incentives to foreigners moving to Portugal. Firstly, whether you’re employed or self-employed in Portugal, you can enjoy a flat tax rate of 20%. Not only that, but your foreign income, including your private pension income, will be tax-free! British buyers, because of a double-taxation treaty, may still have to pay tax on their state pension, however.
And will Brexit impact these rights? Absolutely not – even now, non-EU/EEA citizens are entitled to benefit from the scheme.
To be eligible, you need to have not been resident in Portugal for the previous five years, but you will need to be a Portuguese resident from the point of application on. This means spending at least 183 days a year in the country (not exactly a chore!).
Portuguese inheritance tax
Portuguese inheritance tax is also less onerous than in many other countries. It’s fixed at just 10% and is only applicable for assets in Portugal or otherwise under Portuguese jurisdiction. It’s also important to remember that spouses and children are exempt from paying.
Buying in Portugal
As if the lure of the glorious weather and fantastic lifestyle weren’t enough, these incentives are certainly a pull. And with property prices in Portugal rising, now is a fantastic time to buy – with the potential for an excellent return on investment in the future.
Find out everything you need to know about the buying process in Portugal, from choosing your area to when to involve a notary and how to make an offer, with our free Portugal Buying Guide
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