The Portuguese government’s plans to scrap the Non-Habitual Residency (NHR) tax scheme has been dropped after the prime minister resigned.
PM António Costa resigned earlier this week amid his involvement in a corruption case in which he is being investigated.
This has led the government’s legislative agenda to be put on the backburner which included getting rid of the NHR tax scheme.
Designed to attract wealthy investors to Portugal, it had been set to close to new applicants by the end of 2023.
However, following recent events this will no longer be happening which will come as a huge relief to many British expats residing in the country.
Those wishing to take advantage of the tax’s unexpected survival are still being urged not to delay in applying amid claims it could be short-lived due to pressure from both inside Portugal and the European Union, Portugal Pathways reported.
To read more on this topic, visit: Just 27% of NHR wealthy expats in Portugal prepared for financial future beyond 10 years
Aziz, NHR tax advisor in Lisbon who is part of Portugal Pathways, said: “Because the current government has resigned, its legislative programme which was due to be approved in parliament has to be declared null and void.
“Which means the proposals to end the NHR tax regime are dead in the water too. But probably not for too much longer.
“By the time things have settled, I think we’ll be well into 2024. However, I think it would be a surprise for the NHR tax scheme to survive under a new administration, so while it may be extended perhaps up to the middle or end of 2024 I would urge anyone looking to take advantage of the tax scheme to act fast.”
Steve Philp from Portugal Pathways, added: “We’ve gone from a mad dash to get NHR and, separately, visa applications in by the end of the year to a bit of breathing space. But we think it will probably be just that.
“We would advise anyone looking to take advantage of the NHR tax regime to act now. Get advice, but don’t think you can wait six months because the chances are the NHR tax benefits will still close to new applicants at some point in 2024.
“The sooner you can get the ball rolling the more confident you can be in terms of your financial and life planning.
“We have seen incredible pressure on the professional supply chain from law firms, tax advisors, NHR and visa specialists, wealth management and real estate companies. This is unlikely to change at least in the short term as more and more people see the opportunity that was thought lost with the old deadline.”