Financial Advice for Expats in Portugal

Your exact tax exposure will depend on various factors, including your tax residency status, income sources, investments, assets and overall wealth. Our local advisers simplify the Portuguese tax system so you can budget with confidence and make informed decisions. 

As an overview, if you become a tax resident, normally because you spend 183+ days a year in the country, your tax liabilities may include:

• Personal income tax of up to 48% on general earnings
• Solidarity tax of 2.5% or 5% on higher incomes
• Up to 28% on interest and dividend earnings
• Capital Gains Tax on the sale of property and investments
• Annual property taxes of up to 1% on real estate worth over €600,000

If you’re an expat living in Portugal as a non-resident, our taxation experts will provide the relevant advice to ensure you meet all your Portuguese-source tax obligations.

Yes, tax residents and non-residents with taxable incomes or assets in Portugal usually need to submit an annual return, called the Modelo 3. Our financial services cover every aspect of calculating and declaring your income, including:

1. Annual Declarations of all reportable incomes and assets
2. Meeting Reporting Deadlines and claiming appropriate allowances or reliefs
3. Avoiding Unnecessary Penalties by ensuring all returns are accurate and timely  

Our expat clients have the assurance that they can rely on our advisers for seamless guidance to comply with the tax filing rules and take advantage of all available tax efficiencies.

The Portuguese NHR scheme is a special tax status available to some new foreign national residents. It offers significant tax savings for eligible expats, although following recent reforms, the current regime, often called NHR 2.0, is open only to those who meet specific criteria.

Professionals, executives, and skilled expats who qualify for NHR 2.0 can, for example, benefit from:

• 20% Flat Rate income tax on eligible professional incomes in Portugal 
• 0% Tax on many foreign-sourced dividends, interest and royalties
• Special Tax Rates that apply for up to 10 years

Our experienced advisers can provide further information about your eligibility for the NHR tax status and show you how this may reduce your tax exposure for up to a decade.

Portugal does not have a general wealth tax like many other European countries. However, a nominal tax may be payable against real estate portfolios or single properties that are valued at over €600,000.

We can, of course, offer more personalised advice based on your property assets, but this tax works as follows:

• Applies at rates from 0.7% to 1% depending on the total value of properties owned 
• Calculated against residential, holiday and commercial real estate
• Residents may be subject to the tax on worldwide property ownership, whereas non-residents are liable only if Portuguese real estate assets exceed the threshold.

Our tax advisers ensure our expat clients understand their exposure to real estate tax, categorise their portfolios correctly, and structure their assets efficiently to minimise their overall tax burdens.

The Portuguese government abolished inheritance taxes in 2004, replacing them with a Stamp Duty (Imposto do Selo). This is levied at a general 10% rate, although with several exemptions and allowances to be aware of. Key points for expats to incorporate into their succession planning include:

• Exemptions for Close Relatives: Beneficiaries, including children, spouses and grandchildren, are typically 100% exempt from paying Stamp Duty on inherited assets
• Forced Heirship Rules: There are laws that dictate a fixed proportion of an estate that must be allocated to a spouse and descendants, although options exist to elect to override this if necessary 
• UK Inheritance Tax: Expats living in Portugal may still be subject to UK IHT in some scenarios, depending on how long they have been Portuguese tax residents 

Chase Buchanan’s Portuguese succession planning consultants can assist with drafting legally recognised Portuguese wills, setting up trust structures and ensuring your wealth and estate are protected and distributed according to your wishes.

Pension planning is essential for expats moving from the UK to Portugal. While you can transfer your pension, there are numerous possible solutions, and the right decisions may depend on your overall pension wealth, other assets and current tax status.

Our pension-planning teams can provide support at each step, providing advice around:

• Taxation on Pension Transfers: The Overseas Transfer Charge (OTC), which levies a 25% tax against foreign pension transfers, and other costs associated with relocating a pension fund
• ROPS and SIPPs Transfers: Comparing transfers to HMRC-approved ROPS schemes or alternatives like Self-Invested Personal Pensions 
• Compliance Management: Advising on the varied declarations that may apply, and the ongoing tax obligations linked with lump sum drawdowns and regular pension incomes 

We provide tailored pension planning advice to ensure our clients select the best solutions to simplify access to their retirement wealth and savings, while remaining compliant and tax-efficient.

Every family will have different priorities, portfolios and risk tolerances, and we adapt our advice to help ensure your investments grow, are properly diversified, and align with your objectives and income requirements.

• Tax-Efficient Structures: Advising on the most efficient onshore and offshore portfolio solutions
• Risk-Aligned Portfolios: Adjusting assets to ensure your investments match your accepted risk exposure and time horizons
• Ongoing Reviews: Regular, proactive reporting and forecasts to keep your investments performing, or identifying new opportunities or risks that require action

Portuguese residents or prospective expats are welcome to contact our investment advisers to start building a personalised strategy.

Yes, foreign nationals can purchase properties in Portugal, although they will need to register for a Portuguese tax number, or NIF. All can benefit from guidance around the potential tax obligations linked with property ownership. 

• Property Transfer Tax: Tax on the purchase of a property, with rates from 5% to 7.5%
• Municipal Property Taxes: Annual local taxes, often between 0.3% to 0.8%
• Property Wealth Tax: Payable by property owners with real estate valued over €600,000

If you need assistance planning your Portuguese property purchase, defining your tax residency status or deciding whether becoming a tax resident would be in your interests, our local teams can help.

Tax-efficient savings and investment products in the UK may become far less so once you move to Portugal. If you choose to retain these accounts, the tax reliefs available in Britain cease to apply.

In addition, Portuguese tax residents with UK-based accounts will normally be liable to pay the 28% tax rate on interest income. This means that restructuring assets or considering alternative products may be an important factor before your move.

There are several visas, residency permits and family visas that may apply to your circumstances, and our advisers can offer personalised guidance around all the potential options and the subsequent tasks such as: 

• Non-Lucrative Visa: A visa category for expats with a stable, passive income, such as a pension or rental income 
• Golden Visa: A residency by investment scheme that offers long-term residency following investments or property purchases over a minimum value  
• NIE Applications: New residents must apply for a tax identification number, or NIE, within 30 days of arrival

Our local expat experts can organise a convenient time to discuss these and alternative visas or permits on request.

Expats who become legal Portuguese residents can access the public SNS system by registering with their local health centre. Those who hold an S1 form, including retirees and cross-border workers, may also qualify for state care. 

Most expats choose to supplement this with a private health insurance policy, something that provides access to faster treatments, a wider choice of facilities, and is often a mandatory requirement during the visa application process.