Portugal will abolish attractive taxes on foreigners’ home purchases

In an interview this week, Portuguese Prime Minister António Costa announced that his executive power would abolish the ‘Special scheme for non-ordinary residents’ from next year, a measure that has been in force since 2009, because, he justified, “it no longer makes sense”.

This tax mechanism It is considered one of the causes of the rise in housing prices in the country, as it has attracted high-income foreigners who can afford more expensive homes, while the Portuguese can barely afford the rent, let alone buy a house for the low prices. they have.

The annual global pension rate In the past four years, Portugal has become the number one country where retirees live. Colombia this year it was number five.

Since Costa’s announcement, economist Juan Carlos Pérez, executive director of the consultancy CE Consulting Portugal, which operates in the Portuguese country and in Spain, assured EFE that they have received numerous calls from clients concerned that their tax situation could be affected.

However, he explained: “those already covered by this regime will keep the same tax benefits they kept, they will not disappear”as this will only affect those who planned to move to Portugal and benefit from this mechanism from 2024 onwards.

This regime was created in 2009 to attract both “qualified residents with added value” and beneficiaries of pensions obtained abroad, the Portuguese Ministry of Foreign Affairs indicates on its website.

According to government data, there were a total of 2022 74,258 non-ordinary residents registered in Portugalwhose Tax expenditures -that is, the amount of revenue that the Treasury no longer receives due to the granting of a tax treatment that deviates from the general one- was 1,670 million euros.

Those 1,670 million euros were the highest budget expenditure that year after that on VAT, accounting for 67.2% of what the Treasury no longer receives, and the Portuguese authorities therefore do not have the accounts.

Pérez explained that in general terms it is a regime that non-habitual residents who have not had tax residence in Portugal for the past five years can benefit from.

Citizens of other countries living in Portugal can benefit from this and who receive pensions from private employment, and pay taxes at 10%. “Not public, because there they are taxed at the source where they are paid. That is, a Spanish citizen who comes here, if his pension comes from a public job, he is taxed in Spain, because that is what the double taxation.” agreement.”

“And if you worked in a private company, even though there are exceptions, you will be taxed in Portugal and you would only do so at 10%” if you apply for this regime, he explained.

Other beneficiaries are foreigners with income from abroad that is not employment income, as they are not taxed on Portuguese soil.

For example, a non-ordinary resident of Portugal who has a company in Spain and receives dividends. “In general, these dividends will be taxed a little in Spain, while the rest in Portugal will not be taxed at all,” said this economist.

The third case concerns foreigners with “high added value” professionssuch as business leaders, but also architects, engineers, visual artists, actors, musicians, doctors or university professors, who pay a tax of 20%.

“Imagine an engineer who earns 100,000 euros in Spain, there he could pay about 35,000 to 40,000 euros in taxes, while in Portugal he would pay taxes of 20,000 euros,” Pérez added.

The process to take advantage of this special scheme is not very complicated, especially if you are a citizen of the European Union (EU).

Broadly speaking, you need a rental property, an address and a Portuguese NIF; and both self-employed and employees can do it.

The duration of this privilege is ten years and after this time it cannot be extended, so the abolition of this regime from 2024 will not affect those for whom it will soon expire, because they would have remained without it anyway.

Pérez indicates that in his company, that He has been in Portugal for five yearsAlthough it has been operating in Spain for 34 years, the customer profile that typically benefits from this mechanism consists of liberal professionals, such as computer scientists.

The expert excludes that its abolition will benefit other countries, such as Spain, which also offers tax benefits to foreigners, because the situations involved are different.

In Spain, “the so-called ‘Beckham law’Since athletes are not eligible for it, it has some interesting benefits, but these are not comparable to this regime as it is intended for people who travel for work and Then income up to 600,000 euros is taxed at 24% and the rest up to 45%, and the income obtained outside Spain is also not taxed,” he noted.

“The Spanish regime aims to encourage the entry of highly qualified professionals, while this (Portuguese) regime is for professionals, but also for retirees,” Pérez said.

Source: El heraldo

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