Possible changes to the NHR Status

With the State Budget 2018, changes may be introduced to the current Non Habitual Residency (NHR) status.

With this tax regime, created in 2009, pensions from foreigners, who change their residence to Portugal, become exempt from tax during a period of 10 years. Continue reading

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Additional IMI Tax (AIMI)

With the state budget 2017 a new “wealth tax” in the form of an additional tax on higher-value properties, called AIMI (Adicional Imposto Municipal sobre Imóveis) has been created, replacing the existing Stamp Duty (Imposto de Selo) which used to be charged on residential properties or building plots with a fiscal value (VPT – Valor Patrimonial Tributável) above 1,000,000€. Continue reading

Alojamento Local: CGT and Asset Allocation

As described in my blog post CGT in Portugal, the sale of a property may cause CGT liabilities when, in simple terms, the sales price (valor de realização) is higher than the purchase price (valor de aquisição).

Owners of AL properties have been caught by surprise when they heard about potential CGT liabilities associated to the business activity of renting out their property to holidaymakers (CAE 55201 and 55204).  Continue reading

Alojamento Local (Local Lodging) – What is new in 2017

Further to my blog post published on the 13th of November 2014, entitled Alojamento Local (AL) – Local Lodging, the government increased the tax for this business activity through the State Budget Law for 2017.

Since this year, 35% (previously 15%) of the invoiced income (turnover) will be considered profit and therefore taxed under the simplified regime (regime simplificado). The remaining 65% (previously 85%) are therefore considered costs.

CGT in Portugal

Capital Gains Tax (CGT) is one of the major matters of interest when it comes to deciding where to buy a property, so it might be worthwhile knowing how it is calculated in Portugal.

If you have bought your property after the 31st of December 1988 and sell it with a gain, this gain will be taxed in two different ways, depending if your are resident or non-resident in Portugal. Properties purchased before 1989 are exempt from CGT. In any case, even if the property is sold without a gain or exempt from CGT, a tax declaration must be filed. Continue reading