Association demands “clarification” on end of tax regime for non-habitual residents


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The Association of Real Estate Developers and Investors (APII) demands “clarification” on the end of the tax regime for non-habitual residents announced by the Prime Minister and warned that it could lead to the cancellation of investments in Portugal.

In a statement, the APII demanded “clarification” and asked for “explanations” from the executive, after António Costa announced in an interview with TVI/CNN that he intended to end the special tax regime for Non-Habitual Residents (NHR).

“APPII believes that this is yet another one-off measure by the government, devoid of any logic, which will drive even more talent and highly qualified labor out of the country,” which is why the association wants “explanations from the government as a matter of urgency on what changes it intends to make to this regime, when they will be implemented and, above all, what real impact this will have on our country’s economy.”

According to the organization, “this announcement creates uncertainty” and “could lead to the cancellation of investments in our country and prevent the return of highly qualified Portuguese who are abroad in the diaspora, who were counting on this regime to return and work in Portugal”.

The APII guaranteed that “NHRs create wealth, companies and jobs” and that “measures like this reduce the attractiveness of our country, damaging economic development”.

“We are talking about a basic measure for the country’s economy, which greatly contributed to attracting not only investment, but also human capital in the post-financial crisis period. We believe it is important to carry out an assessment of this measure, specifically to gauge its real impact on the country and the consequences of its end,” said Hugo Santos Ferreira, president of APPII, quoted in the same press release.

The APPII also said that it “hopes that the executive can re-evaluate its position and begin a process of consultation with the main players in this market, in order to conclude, based on real data, which is the right step to take”.

In the interview, António Costa defended the government’s decision not to prolong “a measure of fiscal injustice, which is no longer justified and which is a biased way of inflating the housing market, which has reached unsustainable prices”.

“In 2024, the special tax for non-habitual residents will end. Those who have it will keep it,” he said immediately afterwards, alluding to the foreign residents in Portugal who are already enjoying this tax benefit.

According to the leader of the executive, “the measure for habitual residents has already fulfilled its function and so it makes no sense to maintain a tax on non-habitual residents”.

“There was a time when it was necessary. This measure made sense. In the first ten years, 59% of the people who had benefited remained in Portugal, even though the regime had ended. But now it no longer makes sense,” he stressed.

End of non-habitual resident tax exemption in Portugal

Iris Lavan
Iris Lavan
With a background as a consultant in the medical industry, Iris Lavan brings a wealth of knowledge and expertise to Portugal Pulse. Iris also runs a company in Tel Aviv offering marketing, business development, content creation and public relations services. She holds a degree in economics and management, giving her a solid grounding in business strategy and financial planning. Iris' commitment to Portugal Pulse is reflected not only in her consulting career, but also in her impact on the Portugale media landscape in Israel. She was an interviewer for Hadshot Portugal חדשות פורטוגל, a media outlet that broadcasts news about Portugal in Hebrew, where she provided valuable information on current affairs, healthcare and the economy. Since July 2023, Iris has also been part of the Portugal Pulse team.

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