Tax Benefits for new tax residents in Portugal
The Special Taxation Scheme for Non-Habitual Residents has been revoked, but there are other alternative tax incentive measures applicable to non-residents who wish to come and live in Portugal.
Among these measures is the Regressar Programme, created with the aim of encouraging Portuguese emigrants to return to the country, which offers support measures to facilitate reintegration into the labour market, as well as more favourable tax conditions.
Who can apply?
Individuals who become tax residents in Portugal by 31/12/2026 and who have not been residents in Portuguese territory for the previous five years. However, before those five years, they must have been a tax resident in Portugal. Their tax situation must also be regularised.
It is important to note that this tax benefit is not cumulative with other special schemes, such as the Non-Habitual Resident (NHR) scheme or the new special scheme to incentivise scientific research and innovation.
Tax benefits of the Regressar Programme
Labour Income
50% exclusion, with a maximum limit of € 250,000 (two hundred and fifty thousand euros) on income from dependent work and business and professional income.
Other tax advantages not restricted to the Regressar Programme
- There is no wealth tax or any tax on large properties or fortunes, except AIMI (Additional to IMI), a tax rate of 0.4% for collective persons and 0.7% for natural persons, which is levied on the sum of residential property owned by individuals and companies, with a taxable value of more than €600,000 and less than €1,000,000. A tax rate of 1% applies to the taxable value of more than €1,000,000 and less than or equal to €2,000,000 and 1.5% to the taxable value of more than €2,000,000.
- Gifts and inheritances are completely tax-free between spouses, ascendants, and descendants (up to grandchildren, great-grandchildren, grandparents, great-grandparents, or great-great-grandparents). Gifts and donations to other family members, friends or strangers are subject to Stamp Duty at a rate of 10%.
- Exclusion from capital gains taxation on the sale of a permanent residence if the proceeds are reinvested in another permanent residence in Portugal, the European Union, or countries in the European Economic Area.
- Capital gains on the sale of shares in Portuguese micro, small and medium-sized enterprises (SMEs) are taxed at 14%.
- Gains resulting from the sale of crypto assets held for 365 days or more are exempt from taxation. Outside the 365-day holding period, gains are taxed at a flat rate of 28%. Taxation in the capital gains category is deferred until the time of conversion to legal tender, assets other than cryptocurrencies and services. Transfers between wallets, addresses or own accounts are non-taxable.
- Tax exemption for capital gains on the sale of valuable second-hand goods: art, cars and other collectables. If sold by private individuals, it is also exempt from VAT.
- There is no exit tax when you cease to be a Portuguese tax resident, except for holders of crypto-assets to whom an exit tax of 28% will apply on crypto-assets held for less than a year.
- Marriage and civil partnership are treated in the same way for tax purposes.
When to apply?
The benefit is automatic and does not require prior recognition. As soon as they are considered residents and the other legal circumstances are met, taxpayers must mention in Annexes A, B or C of the IRS Form 3 that they intend to benefit from this regime when submitting their tax return.
Validity of the Regressar Programme
The Regressar Programme is granted for a period of 5 years.
Regressar Programme and Social Security
In Portugal there is an obligation to register with Social Security if the applicant earns labour income. It should be noted that the Regressar Programme scheme has no impact on social security contributions.
During the first year of social security registration, self-employed workers are exempt from paying contributions. After this period, a monthly rate of 21.4% will be applied to 70% of the gross amount invoiced, with a financial limit of 12 times the amount of the social support index (IAS), set in 2024 at € 509.26.
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