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The sun-soaked shores of Portugal are one of the most popular places for UK nationals to relocate. In this guide, we’ll explain how taxes work in Portugal, which impacts UK expats, and why your tax residency status is crucial to working out the best strategy for your wealth.
A beautiful Mediterranean climate, healthy economy and excellent quality of living make Portugal an enticing draw for families, professionals and retired expats looking for a better pace of life.
However, any international move brings financial implications, not least understanding the tax regime of a foreign country. Therefore, it is essential to know how the tax systems work and optimally structure your assets to remain tax-efficient.
Cross-border taxation is a complex area, and relocating as a British expat brings about hundreds of considerations, from inheritance taxes to your residency status.
There are also some exceptional opportunities to reduce your tax liabilities, with some of the UK tax rates being substantially higher than overseas.
Still, to take advantage of those prospects and ensure you aren’t unduly exposed to avoidable obligations, it’s vital to know the contrasts between the British and Portuguese tax systems.
Table of contents
- Establishing Portuguese Tax Residency
- The Portuguese Non-Habitual Resident Programme
- Double Tax Treaties Between Portugal and the UK
- Tax-Efficiencies For UK Expats in Portugal
- Portuguese Income Tax Rates
- Social Security Contributions
- Tax On Rental Income For British Expats
- Understanding Wealth Tax In Portugal
- Succession Planning in Portugal
- Portuguese Inheritance Tax For Expat Residents
- Frequently Asked Questions about Taxes In Portugal
- Other European Specific Guides
- Related Articles
- Questions or Comments?
Establishing Portuguese Tax Residency
Before you start looking at income tax rates and restructuring investments, you’ll need to identify whether you are indeed a Portuguese tax resident. This process isn’t automatic and applies on a case-by-case basis, depending on factors such as:
- Where your primary residence is located.
- If you live and work in one country.
- Whether you spend 183 days or more a year in Portugal.
- Where your business or revenue streams originate.
In the UK, we have a three-step test called the UK Statutory Residence Test. This test works through questions like those above to establish whether you are a British resident for tax purposes.
It is possible to be considered a tax resident of both Portugal and the UK, in which case double tax treaties apply. These must be applied correctly to avoid declaring taxes in the wrong country and potentially paying tax twice on the same income.
You may be considered a UK tax resident if the following connections apply:
- Most of your work or income comes from the UK.
- You have family and property in Britain.
- You spend more time in the UK than in Portugal, and at least 91 days over the last two years.
Generally, if you live in Portugal for at least 183 days of the year or six months, you will be considered a tax resident. Tax liabilities arising from the day of your arrival if you are relocating as a permanent expat.
Tax residency is vital since it determines which taxes you will need to pay, at what rate, and in which country. If in any doubt about your tax residency status, it is strongly advisable to seek professional advice before making any decisions about your financial future.
For Portuguese citizens looking to get permanent residency in the UK, look at ourTier 1 Investor Visa guide.
The Portuguese Non-Habitual Resident Programme
Post-Brexit, Portugal remains one of the most welcoming EU countries for expats. Schemes such as the ‘Golden Visa’ programme demonstrate how much the government wishes to continue welcoming British expats to its shores.
One of the regimes to be aware of is the Non-Habitual Resident (NHR) programme. This scheme offers substantial tax incentives for expats moving to Portugal for the first time or who haven’t been resident in the last five years.
NHR incentives include:
- Tax exemptions on foreign income, including UK pensions.
- Reduced tax liabilities for ten years.
- Exemption from higher rate tax activities such as employment.
Although the NHR scheme is highly attractive and provides significant tax benefits, there are rules in place to be aware of – adhering to these regulations can mean being exempt from any tax at all on your overseas pension fund.
However, it remains vital to seek professional advice. This is because UK pension schemes may be taxable in the UK, some revenue streams deduct tax at source, and a lot will depend on your residency and domiciliary status.
Therefore, you might have claimed tax exemption on a pension fund, only for your beneficiaries to find that they are liable for inheritance tax against that total when you pass away.
Double Tax Treaties Between Portugal and the UK
One of the key factors for many expats is in double tax treaties, meaning that you shouldn’t need to pay both the UK and Portuguese taxes on the same income, gain or event.
There are tiebreaker rules that help the respective countries decide where you should be a tax resident, and therefore be liable for tax on your primary income sources.
Again, this can be complicated, and your tax residency status could change along with your circumstances. For example, starting a new job, selling a property, or moving home could impact your tax status.
It’s also crucial to clarify your tax residency as quickly as you can.
- Taxes filed and paid in the wrong country may not be refundable.
- Failing to declare or pay taxes could be fined, penalised, and treated as tax evasion.
The best course of action is to establish where you are a tax resident and register with the tax authorities in your host country to declare your residency and ensure you are keeping up with filing returns and disclosures.
This process isn’t automatic. If you don’t register and yet are considered a tax resident, the authorities in Portugal might prosecute or issue heavy fines, so it’s essential to get this right from the time you relocate.
Likewise, there are tax incentives available, and you may miss out on those should you delay registering as a tax resident.
It’s also essential to make sure you pay the requisite social security contributions since failure to contribute might mean you cannot access state healthcare, pensions and benefits.
Make sure to read our expat guide to healthcare in Portugal.
Tax-Efficiencies For UK Expats in Portugal
One of the reasons it is worth consulting a financial adviser before the relocation is that tax treatments of different assets can vary between countries.
There may be some tax-efficient accounts or investments in the UK, which are not in Portugal, and vice versa.
For example, ISAs and Premium Bonds are tax-free in Britain and a popular way to save for the future without attracting tax obligations.
As in many European countries, both attract tax in Portugal and can often be restructured to lower tax exposure. However, you cannot contribute to an ISA as a non-UK resident, so drawing down the cash before relocating and investing in a more tax-efficient alternative may be preferable.
Other products in a similar category include unit trusts, equities, investment bonds and open-ended investment companies (OEICs). So again, advice from a tax specialist could substantially reduce your next tax return bill after moving to Portugal.
Portuguese residents pay a flat rate of 28% interest on all earnings from bank interest worldwide. However, you might be able to reduce that liability by adding the interest to your general income and paying tax against a standard tax bracket.
It’s worth noting that offshore accounts held in blacklisted locations, such as Guernsey and Gibraltar, are liable for a higher 35% tax charge.
Portuguese Income Tax Rates
The most significant tax many of us pay is income tax, and this works on a tax band system in Portugal, much as in the UK.
Other taxable earnings, such as capital gains, can be added to income and taxed according to the band, rather than liable for a flat rate.
Residents pay income tax on any global earnings, including rental income, pensions, employment or other revenue streams.
Income tax rates in Portugal for 2021 are:
| Taxable income € | Taxable income £ | Tax rate |
| Up to €7,112 | Up to £6,115 | 14.5% |
| €7,112 – €10,732 | £6,115 – £9,230 | 23% |
| €10,732 – €20,322 | £9,230 – £17,470 | 28.5% |
| €20,322 – €25,075 | £17,470 – £21,560 | 35% |
| €25,075 – €36,967 | £21,560 – £31,785 | 37% |
| €36,967 – €80,822 | £31,785 – £69,490 | 45% |
| Over €80,822 | Over £69,490 | 48% |
Remember that Non-Habitual Residents pay a flat rate of 20% against all income. There is also a reduced or deferred tax rate on dividends and other investment income, some of which are exempt.
Non-habitual residents pay no inheritance tax, wealth tax or gift tax, which can be an appealing option, offsetting income tax costs.
Social Security Contributions
Alongside income tax, Portuguese residents pay social security contributions equivalent to National Insurance in the UK.
This welfare system covers most workers, including self-employed people with various benefits, including:
- Maternity, paternity and adoption leave.
- Unemployment benefits.
- Financial support in old age.
Standard rates are:
- Employer social security contribution of 23.75%.
- Employee social security deductions of 11%.
- Total contributions of 34.75%.
Social security is charged against gross income.
Tax On Rental Income For British Expats
Many UK residents decide to keep hold of their British property when moving abroad. This option can be a great way to cover mortgage payments, retain an asset, and earn rental income simultaneously.
But, if you earn income from a British investment property, you still need to declare this and pay the taxes to HMRC. As a Portuguese tax resident, you must also report the income in Portugal as part of your worldwide income.
It is essential to declare the income correctly and claim a tax credit against your Portuguese tax liability – although this problem won’t arise if you are part of the NHR programme since this tax is not payable in Portugal.
Should you invest in a rental property in Portugal, this will be taxable locally. The tax rate depends on whether you are a resident or not (note that permanent residency and tax residency are not the same).
Non-residents pay a 28% flat rate after deductions.
Understanding Wealth Tax In Portugal
Tax residents in Portugal pay an annual wealth tax, charged on properties, or a share in property valued more than €600,000 (£516,000).
This charge is called the Adicional Imposto Municipal Sobre Imóveis.
Each individual has the same threshold, and partners can combine this to be exempt up to €1.2 million (£1.03 million), provided they are married or in a civil partnership.
Wealth tax is charged as:
- 0.4% of the total property asset value for companies.
- Between 0.7 and 1.5% of the property value for individuals.
- The highest 1.5% rate is charged on property worth over €2 million (£1.72 million).
There is also a property tax, called Imposto Municipal Sobre Imóveis (IMI), charged every tax year, calculated on December 31.
If the property is valued at under €66,500 (£57,200), and you earn under €15,295 (£13,150) per year, you are exempt from IMI.
Exemptions also apply, if the property has been purchased as a primary home, in which case property tax is not payable for the first three years, provided the home is not worth €125,000 (£107,500) or above, and you earn less than €153,000 (£131,500) gross, per year.
Should you sell a property in Portugal, you will need to pay capital gains tax, calculated as follows against 50% of the profit:
- Individuals pay 28%.
- Companies pay 25%.
There are exemptions here, too, in which case capital gains tax is waived. They include using the proceeds to purchase another primary residence in three years.
Portuguese tax residents selling UK property are taxed similarly, with 50% of the capital gain being taxable. The gain is added to your income and taxed according to the rate in your relevant band.
From April 2015, any residents in Portugal selling a UK property will also be liable for British capital gains tax against the value accrued since this date.
Succession Planning in Portugal
Succession planning is a crucial factor for expats moving to any international destination. It determines who can inherit your estate, what rules apply, and what inheritance taxes will arise.
One of the factors to be aware of is the forced heirship rule. These regulations mean that some beneficiaries are not permitted to receive your estate, and some relatives have an automatic entitlement.
For example:
- Stepchildren cannot be named as a beneficiary.
- An automatic entitlement applies to children, parents, grandparents and spouses.
These regulations can dictate the disbursement of as much as 50% of your estate. In addition, residents are subject to Portuguese succession laws across their worldwide estate but excluding foreign properties.
It is, therefore, crucial to understand how these regulations apply to you.
Portuguese Inheritance Tax For Expat Residents
A big draw for Portugal is that although there are property succession taxes, you can avoid them if the property is gifted to children or other beneficiaries. However, note that some assets can be liable for UK inheritance tax, which may not change even if an exemption exists in Portugal.
There is no inheritance tax (called Stamp Duty in Portugal) for:
- Parents
- Children
- Spouses
However, other beneficiaries pay a 10% inheritance tax, making this a significantly better option than paying up to 40% tax in the UK.
These tax rates apply to all assets in Portugal, including properties and lifetime gifts.
Where an inheritance tax charge arises, it is the beneficiary and not the estate responsible for the obligation. Recipients cannot transfer assets until the tax charge has been met, and therefore inherited assets cannot be sold to raise funds to pay the inheritance tax.
A United Kingdom Will can be recognised in Portugal, but it is often advisable to construct a new local Will. This is because cross border wills must go through the UK probate system, then be translated, and then go through probate again in Portugal, which can be costly and time-consuming.
International wills can often contradict each other and give rise to conflicts and disputes, so having a Portuguese will is usually the best option for permanent expats.
Note that the double tax treaties between the UK and Portugal do not apply to inheritance tax. However, the UK provides unilateral relief to avoid one estate being taxed twice on the same assets.
For unmarried couples, the stamp duty rate of 10% applies to inheritances and lifetime gifts. This same rate is payable by non-direct relatives and other friends.
Unmarried couples who have lived together for over two years and registered with the tax authorities can be treated as married couples for tax purposes.
UK civil partnerships and same-sex marriages are all recognised and treated as spouses in Portugal.
Frequently Asked Questions about Taxes In Portugal
Is there a property tax payable in Portugal?
Yes, although the rate depends on the region where you live since this is a municipal property tax set by the local authority.
Properties are liable for rates from 0.8% for rural homes and between 0.3 and 0.45% for residences in towns and cities.
Are tax rates high in Portugal?
Income taxes work on a similar bracket system to the UK. Rates vary from 14.5 to 48.5%. Most employees or self-employed residents must also pay 11% of social security contributions.
However, there are some desirable tax benefits to living in Portugal:
Direct family members are exempt from inheritance tax, and it is charged at 10% for other beneficiaries.
The Non-Habitual Residence scheme offers a lower income tax rate of 20% for 10 years for expats employed in a ‘high value’ role and exempts some foreign-sourced income from tax.
There is no capital gains tax payable in Portugal when selling a UK property for scheme members.
How much Portuguese tax do I have to pay on my UK pension?
The tax agreement means that most UK pensions are taxed in Portugal, at 10% for Non-Habitual Residence Scheme members for the first 10 years of residence.
Other expats are taxed at the standard income tax rates, up to 48% depending on their income tax band.
There are many options for pension schemes, such as transferring to a QROPS to ensure the fund is tax-compliant and will not attract UK taxes or overseas pension transfer charges.
Do I have to register as a Portuguese tax resident?
You do indeed – expats living and working in Portugal or relocating permanently will need to register with the local tax office and be allocated an income tax number.
Returns can be submitted online or via paper copy, and the tax year runs from 1st January to December 31 alongside the calendar year.
Registration forms can be downloaded from the Autoridade Tributária e Aduaneira.
Failure to submit your tax return on time can be fined from €200 (£172) up to €2,500 (£2,150). Late payment penalties vary from 10%, up to double, capped at €55,000 (£47,300) plus interest.
Are all Portuguese tax residents liable for social security contributions?
It depends on your residency status and whether you are living in Portugal under the NHR scheme.
Self-employed professionals in ‘high value’ activities pay 20% income tax and social security after their first year of exemption.
Employees of Portuguese companies pay the 20% income tax rate, plus social security rates.
The below categories are exempt in Portugal from personal income tax and are not liable for social security contributions through the Non-Habitual Residence scheme:
Retirees in receipt of a lifetime pension or annuity.
Private investors in jurisdictions excluding those on the blacklist receive income in interest or dividends from debt or equity.
Private landlords receiving rental income or capital gains from properties outside of Portugal.
Employees working for a non-resident company based outside of Portugal.
Am I eligible for the Portuguese Non-Habitual Resident Scheme?
Applicants must be new expats to Portugal and have not been tax residents within the last five years.
The NHR scheme is intended to make Portugal more internationally competitive and is aimed at individuals likely to become permanent residents.
Other European Specific Guides
Make sure you read the guide onmoving abroadbefore you decide. In addition, you can find other European country guides following the links below.
- Guide to Living In Italy
- Expat Guide to Buying Property in Greece
- Living in Spain for expats
Related Articles
Below is a list of some related articles that you may find of interest.
- Portugal Citizenship By Investment
- Expat Guide to Buying a Property In Portugal
- Healthcare In Portugal for Expats
- Don’t Pay Tax On Your Pension For 10 Years
- Cost Of Living In Portugal
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FAQs
How much tax do expats pay in Portugal? ›
Non-residents are taxed at a flat rate of 25% on their taxable remuneration in 2023.
Will my US Social Security be taxed in Portugal? ›They won't pay social security taxes in Portugal. Under U.S. law, U.S. Social Security covers self- employed workers if they are U.S. citizens or U.S. resident aliens, even if they live and work outside the United States.
Do US retirees pay taxes in Portugal? ›Taxes For Retirees in Portugal
Portugal typically taxes all income. This includes pension income and income from international sources.
Most workers pay taxes automatically through their payslips, but everyone must still complete an annual tax return. Married couples in Portugal must submit a joint return. To calculate the relevant tax rate, the couple's collective income is divided in two.
Do you pay yearly property tax in Portugal? ›(Imposto Municipal sobre Imóveis)
IMI is levied on the property's fiscal value (“rateable value of properties” VPT), which takes into consideration several criteria such as property age, size, commodities and location. The property tax is fixed annually by each municipality and ranges from 0.3% to 0.8%.
Non-Habitual Resident (NHR) in Portugal is a special tax status for new residents. Its owners are exempt from paying taxes on global income. Income earned in Portugal is taxed at a flat rate of 20%. Foreign investors may get a Portugal Golden Visa and optimise their taxes applying for NHR status.
Can a retired US citizen move to Portugal? ›How can I retire to Portugal from the USA? You need to apply for residency in order to retire in Portugal as an American. The process is straightforward, but it may take a while. You need to provide (1) your passport, (2) proof of income, (3) proof of health insurance, (4) criminal background check, in order to apply.
Does Portugal tax expat retirement income? ›Foreign pension income in Portugal is taxed at only 10% and most double taxation agreements (DTAs) grant exclusive taxation rights on pension income to the country of residence.
What are the cons of retiring in Portugal? ›- Bureaucracy can be slow.
- Understanding double taxation can be tricky.
- Winters can be cold.
- Learning Portuguese is difficult.
- Cultural shock.
- Slow pace of life.
- Lots of tourists.
Once you are a tax resident in Portugal, your State Pension is taxable only in Portugal at the scale rates of income tax. For 2023, this income starts at 14.5% for income up to €7,479 and rises to 48% for income over €78,834. You benefit from a deduction of up to €4,104.
What are the tax advantages of retiring to Portugal? ›
But Portugal still offers a range of appealing tax benefits for retirees. These include: A reduced income tax rate on foreign pensions and rents paid to non-residents. Exemption from capital gains tax on property sold outside Portugal by non-residents.
Do US expats pay taxes in Portugal? ›US Expat Taxes in Portugal
If you're living abroad in Portugal, you'll need to file both US taxes and Portugal taxes.
- Multibanco. Vouchers, prepaid and giftcards. The most popular payment method in Portugal.
- Visa. Cards. Visa is one of world's largest global card networks.
- Mastercard. Cards. Mastercard is a market leading card scheme worldwide.
- Maestro. Cards. ...
- MB WAY. E-wallet. ...
- American Express (AMEX) Cards. ...
- PayPal. E-wallet.
The declaration of your IRS can be done directly online on the Portal das finanças. An access to your Portuguese financial administration space will allow you to fill in your tax return but also to obtain information about your income and expenses.
Do you have to pay hotel tax in Portugal? ›Portugal's low tourist tax is paid per night per person and is only applicable to guests who are 13 and over. It's around €2. You only have to pay it on the first seven days of your stay.
How do I get tax residency in Portugal? ›As a general rule, an individual is qualified as a resident of Portugal if: - he is present in Portugal for more than 183 days, consecutive or otherwise, in any 12-month period starting or ending in the calendar year concerned; or - he is in Portugal for a shorter period, but he has on any day during the period ...
Is Health Care Free in Portugal? ›Yes, Portugal does have state-provided healthcare, which is free for all citizens and legal residents in Portugal. Even though medical care is mainly free, you may have to pay some fees when visiting emergency rooms, your family doctor, or requesting ambulance services.
What is 10 years no tax in Portugal? ›The resident-non-habitual NHR status is a fiscal regime that was created in 2009 by the Portuguese Government. It is a tax system that grants a 20% tax rate or a total exemption on the taxation of income of expatriates who choose to live in Portugal, for a period of 10 years.
Does Portugal have 10 year tax free visa? ›Individuals of any nationality (including non-EU/EEA citizens) can potentially benefit from Portugal's NHR regime for 10 consecutive years if they qualify as a tax resident in Portugal and have not been taxed as a Portuguese tax resident in any of the five years preceding the year in which residence is established.
Why are Americans flocking to Portugal? ›Why do Americans move to Portugal? An excellent year-round climate, fantastic beaches a short distance from the capital, great food, high quality of life, and low living costs are some reasons Americans move to Portugal. There are also some successful tax incentives that US citizens can benefit from in Portugal.
Where do most Americans live in Portugal? ›
The biggest American expat communities are Lisbon, the Algarve, and Porto. Compared to some other European countries, Portugal manages to balance a high quality of life with a low cost of living.
Can a US citizen have dual citizenship with Portugal? ›Portugal allows dual citizenship, meaning that foreigners can gain Portuguese nationality without having to give up the citizenship of their home country. However, you will first need to check with your home country if it also permits dual citizenship.
What city in Portugal has the most expats? ›Home to approximately 87 different nationalities, Lisbon is the most popular place for expats to live in Portugal. The diversity of the city makes it a very dynamic and exciting place to live.
What are the pros and cons of retiring in Portugal? ›Living in Portugal offers many advantages: a warm climate, the Atlantic ocean, mountains nearby, a low crime rate and a relatively low cost of living. Medicine and education are well developed here, and residents are offered tax exemptions. The disadvantages include the need to learn Portuguese and carry cash on you.
Why are Californians moving to Portugal? ›Citing the state's high cost-of-living, wildfires, water shortages and at times its politics, many Californians have moved elsewhere in the U.S. Others have decided to relocate internationally. Americans now are among the fastest-growing groups of Westerners moving to Portugal.
Why is electricity so expensive in Portugal? ›Price of electricity in Portugal is expensive
Unfortunately, Portugal has some of the highest prices for electricity in Europe thanks to taxes. According to Eurostat, we pay €0.2246 per kWh here which is 22% higher than in the UK.
Lisbon is one of the cities where expats are happiest with their life abroad, according to the Internations Expat City Ranking 2022, where the Portuguese capital comes in fourth.
What does T1 mean in Portugal? ›The terminology used is T0, T1, T2, T3, and so on—the numbers correspond to the number of bedrooms. For example, a T1 is an apartment with one bedroom, a kitchen, a bathroom, and a living room. A T0 is a studio apartment.
What is the number 1 place to retire in the world? ›Americans who retire overseas still have tax obligations. Typically, you will have to file a tax return with both the US government and your new host country. You may even have to file a tax return with the US state you used to live in.
Do expats pay taxes on retirement income? ›
Taxes on Worldwide Income
Leaving the United States does not exempt U.S. citizens from their U.S. tax obligation. While some retirees may not owe any U.S. income tax while living abroad, it is likely they must still file a return annually with the IRS. Filing requirements are generally the same wherever one resides.
Do US Expats Pay State Taxes? The answer is yes— If you're living abroad, you might not realize that you're still considered a resident of your home state and are subject to paying state taxes. This includes income tax, property tax, and sales tax.
Does Portugal tax Roth IRA distributions? ›Does Portugal recognize Roth IRAs? Portugal does not recognize Roth IRAs, and the tax benefits of a Roth are not relevant in the Portuguese system.
Are American expats welcome in Portugal? ›The Portuguese government welcomes expats from the US and the move is generally straightforward. Before getting into details on a visa, there are a few things you need to know about Portuguese law when it comes to foreigners entering the country.
Is it better to get euros or use debit card? ›Advantages of an overseas card
The main advantage of using a debit or credit card overseas is that you won't pay foreign transaction fees every time you spend. While many also won't charge fees for cash withdrawals, you will still usually be charged interest from the date of the transaction if you use a credit card.
Will you use American money in Portugal? During your trip to Portugal, it will be impossible to pay in American money, since Portugal uses Euros. The best you will be able to make is to find the best exchange possible is withdraw in an ATM machine on the street.
How do I avoid ATM fees in Portugal? ›- See if your bank belongs to an ATM network like Global ATM Alliance.
- Avoid Euronet ATMs in Portugal (and everywhere)
- Make fewer but larger withdrawals.
- Always choose transactions in the local currency instead of your home currency.
One of the main catalysts for the IRS to learn about foreign income which was not reported is through FATCA, which is the Foreign Account Tax Compliance Act. In accordance with FATCA, more than 300,000 FFIs (Foreign Financial Institutions) in over 110 countries actively report account holder information to the IRS.
What is the Portuguese tax app? ›ATGo is a newly developed mobile application (available on both iOS and Android operating systems) that allows self-employed taxpayers to easily comply with their tax obligations and manage their professional activities in a single point of access, an integrated and mobile environment.
Why do I need a tax representative in Portugal? ›The appointment of a tax representative domiciled in Portuguese territory is required by law in certain cases in which it is determined that a non-resident (regardless of being a Portuguese citizen) must comply with the tax obligations under Portuguese law.
How much are income taxes in Portugal for foreigners? ›
Non-resident income tax rate in Portugal
The tax rate for foreigners in Portugal who are considered non-residents is 25% on all income earned.
Property tax rates range from 0.3% to 0.45%. While properties in rural areas are taxed at 0.8%, properties in more urban areas are taxed within the mentioned range. If a property has been re-valued since 2004, it will fall between 0.2% and 0.5%.
How much in taxes do I pay as an expat? ›Some American expats who work abroad may also need to pay US social security and Medicare taxes on their earned income, especially if they are self-employed or work for a US-based employer. For the 2022 tax year, the rate for expat employees is 7.65%. For self-employed expats, however, the total is double, at 15.3%.
How much money do you need to be an expat in Portugal? ›How much money do you need to live comfortably in Portugal? Compared to other European countries, Portugal is exceptionally affordable. A couple with a mid-range income can live comfortably in Portugal's cities for around €1,700 per month. A couple in Lisbon can live on around €2,000 per month.
How much are Social Security taxes in Portugal? ›If you work as an employee, your contribution to Social Security is equivalent to 11% of your gross salary (total income without deductions). This amount is automatically deducted by the employer. Find out more about social security deductions if you are employed.
Does Portugal have no tax for 10 years? ›The resident-non-habitual NHR status is a fiscal regime that was created in 2009 by the Portuguese Government. It is a tax system that grants a 20% tax rate or a total exemption on the taxation of income of expatriates who choose to live in Portugal, for a period of 10 years.
Is Portugal still a tax haven? ›With standard tax rates ranging from 14.5% to 53%, Portugal can either be crippling or a tax haven depending on how and where you structure your wealth. Portugal introduced the Non-Habitual Residence (NHR) scheme in 2009 and made updates in 2020.
How long can I stay in Portugal if I own a house? ›Buying property in Portugal allows you to acquire a Portugal residence permit, as long as you stay in the country for a minimum of 14 days each two years.
How much tax do you pay on a second home in Portugal? ›The percentage of tax charged can range from 1% to 8%, depending on the purchase price, the location of the property and whether it is first or second home in Portugal. The acquisition of more than 75% of the share capital of a Portuguese company that owns real estate located in Portugal, is also subject to IMT.
How much tax do you pay on Portuguese rental income? ›A non-resident of Portugal will pay tax at a rate of 28% on the profit after the deduction of the following expenses from the total rental income received: Structural maintenance and repairs. House Insurance. Condominium fees.
Do expats pay taxes on Social Security? ›
Taxable Social Security Retirement Benefits
Social Security benefits can be 85% taxable on your US expat taxes. It can also bring on a tax liability within the foreign country you are living in.
United States citizens who work in other countries do not get double taxed if they qualify for the Foreign-Earned Income Exemption. Expats should note that United States taxes are based on citizenship, not the physical location of the taxpayer.