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Portugal Property Market Continues to Strive

By Amy,

Portugal property prices were expected to decrease, however dueto positive steps by the country the property industry has not only been sustained but continues to rise.

Apartments are clearly favoured among foreign investors in the Algarve. Property used for holiday rentals are among the most interesting and popular real estate in the Portuguese market with many investors purchasing to see a return on their investment. Across the Algarve places such as Albufeira, Vilamoura, Quinta do Lagoand Vale de Lobo are some of the more popular locations for those looking to invest.

There are no restrictions on foreign property buyers in Portugal and transaction costsare fairly low typically 6% of purchase price. Since 2012, non-European investors have also been entering the Portuguese property market in increasingly large numbers due to the introduction of the Golden Visa, which enables property investors to obtain residence permits.Between October 2012 and June 2016, foreign investors obtained over 3,400 residency permits.

The total cost of the residential property acquired by these investors amounted to approximately €1.9 billion, the average amount invested by the buyer was about €580,000.

Analysts are positive about the Portuguese property market going forward due to its proven record of resilience and relatively low property prices. It didn’t suffer through a housing bubble prior to the 2008 crisis and its housing prices stayed afloat during the recession, Portugal’s current market boasts prices that are particularly attractive when compared to others within the European market.

If your ready to learn more about buying or investing in Portugal, we look forward to helping you throughout the process.

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CategoriesInvestment Property Tax Regime

The Non Habitual Tax Regime (NHR)

By Amy,

The non-habitual resident (NHR) regime is open to anyone who has the right to reside in Portugal (an EU/EEA/Swiss citizen or a holder of a residents permit who has not been a tax resident of the country during the previous 5 years. 

Under this regime, the following taxation rules apply:
    • Foreign-source self-employment or sole trader income derived from an eligible occupation (see below), royalties, capital gains and investment or rental income will be exempt from Portuguese tax as long as they may be taxed in the source country either under a double taxation agreement or under the OECD model tax convention. In addition, such income must not be deemed Portugal-sourced under applicable Portuguese law, and must not be sourced from a blacklisted tax haven.
    • Foreign-source employment income will be exempt from Portuguese tax as long asit is liable to tax (at whatever rate) in the source country either under a double taxation treaty or under the OECD model tax convention, and is not deemed Portugal-sourced under applicable Portuguese law.
    • Occupational pension income will be exempt from Portuguese tax as long as it is liable to tax in the source country under a double taxation treaty or it is deemed as not being Portuguese-source income under applicable Portugueselaw.
    • If your occupation is eligible (see below), Portugal-source employment or self-employment / sole trader income will be taxed at a flat rate of 20%, while other Portugal-sourced types of income will be taxed at the normal rates applicable to resident taxpayers, the calculation of the applicable marginal tax rate taking into account all income, including exempt income.
    • In Portugal there is no wealth tax or capital duty, and an inheritance or a gift received by a spouse, descendant or ascendant is tax exempt. Inheritance or gifts received by other individuals will be either not taxable under territoriality rules, or else may be subject to a flat 10% stamp duty.
If you are interested in learning more about the NHR and purchasing a property in the Algarve do not hesitate to get in touch.
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