It's a progressive tax system, starts at 14.5% for the first 7,479 EUR, then it goes to 21%, etc, up to 48%. There are also tax credits that can reduce total tax owed. It's not that you will get taxed at 48% for all your income.
Thanks for this. I was thinking to myself “surely it’s progressive?!” But couldn’t get certainty on that. Still not nice as in a fair bit more than UK system but not as bad as a flat 48% if you are over that threshold.
@@RemofRenaissance Yes, better than getting everything taxed at 48%. Also there are credits available to reduce the amount of tax owed. Different categories of credits such as for rental expenses and medical expenses.
Im worried. We are right in the middle of the process and now it’s become very complicated. Our tax attorney and Visa specialist don’t really know what’s going on. We are moving forward but with caution. Our kids are enrolled in school and we were looking at places last week. 48% tax on income over 80K is a lot more vs what we were looking at realistically with NHR. And we can’t get any guarantees that we can get it. VFS meeting in Nov. Temp visa is 45 days later. SEF is 30 days after that. Then takes 2-4 months to get the resident Visa, then 2 more months for NHR approval. If we had the VFS today it would be March or April at best to get if sorted. Having a hard time seeing this working for us and we are far along in the process. Super bummed right now.
Have you considered the possibility of changing your tax attorney for a better one ? Good luck with everything… But you need to be in the driving seat, not a passenger. Take responsibility
What taxes does would one retired person moving to Portugal from USA have to pay on social security and 401K income have to pay now, 2023, vs end of NHR in 2024. Considering move in 2024 but I am confused on all of this. Since you are already paying taxes on your 401k withdrawal in Usa, you still have to pay taxes in Portugal on both Social security and 401K that your earned in US. Dbl.taxation? Writeofs?
The budget that was released a few days ago says you must be a tax resident by the of 2023. They DO NOT want a major influx in 2024. Unless you are already pretty far along in the process it is probably too late.
@@mt4100 Yes need to establish residency by end 2023 then have till end march 24 to apply for NHR. There are other schemes though for 50% tax reduction
In Italy you can (still) get the same total tax benefit anywhere - just you get more in a single year if you head down south. So 30% of income is taxed in the north, 10% in the south however the total tax benefit is capped at the same amount in any 3 year period. So largely in the north you need to cap taxable income to 180k annually, in the south maybe 130k? IDK detail on the latter - Im in the north
Yes you will pay more taxes in Portugal overall compared to US taxes since the deductions are much smaller and the rates a bit higher, however cost of living is dramatically lower (outside Lisbon) than it is in USA. So for families earning less than $100k/yr USD it’s much better value for your money. If you’re earning more than that, then the tax changes should really give you pause. I moved to Spain and I don’t receive a special tax status but we live a much better quality of life even thought we pay about $5k-$10k more a year in taxes. If you really want to avoid higher taxes, then I recommend island nations w advantageous tax schemes like St. Lucia, OR central or South America, OR extremely high cost of living (ie Singapore). But if you are middle income person/family and if had your heart set on Portugal for the culture, infrastructure, healthcare, weather of Portugal, then the ending of the NHR program should not dissuade you.
It all depends on several factors besides tax breaks and each individual has different priorities. For a retiree older than 60, health expenses are top priority that may cause one's bankrrupcy if living in the US.
@@maxflight777I live in Florida and it’s almost double, except maybe the rents in Lisbon. There are a lot of other places to live in Portugal, including the Azores.
@susanner35 I am Portuguese-Bermudian. The cost of living in this BOTC has skyrocketed since March 2020. There is no income tax or taxes levied on retirement funds, but the daily living expenses will eat up any perceived savings. Not enough is grown to supply local consumption. It’s all imported. We have to pay through the nose for EVERYTHING, including travel off island, which are major factors for why I am planning to retire in Portugal late 2025. I expect that my tax implications will be in the similar range as what you are paying. Of course I would need to meet with a Portuguese tax expert to discuss the details💁🏻♂️EJ.
Rents and property prices in Portugal have gone from the cheapest to one of the most expensive in Europe in the last 10 years. It isn't a low cost of living in Portugal compared to many other European countries.
We are retired Americans planning move to Portugal in 2024. We have already invested in Portugal with the purchase of a condo currently under construction. My question is about the taxes for our pension and social security from the US. Is Portugal planning to increase taxes on retirees? I’m not clear on the double taxation agreement between Portugal and US.
You will be taxed at the same rate as a Portugese person now. From a purely financial perspective, it's a good time to sell the condo and start looking at other european countries for retirement e.g. France , Spain, Greece etc
We were seriously looking at Portugal for a country to move to with pre move scouting trip this next year. 48% vs 10% tax rate makes a huge difference and it is likely off our list because of that. I wish it wasn't so but it sure seems to be. I am not sure why if housing costs and supply is such a big reason to stop the NHR program that Portugal doesn't do like Italy or Greece and only allow the NHR program in areas where housing cost and availability are less stressed. That way you get foreigner dollars(Euros) year round, increase economic activity in slow or declining areas while supporting the economy locally and nationally. This goes even further when retirees come and don't displace a Portuguese worker but probably help employ some.
obvs depends on your circumstances but I think that still able to get flat 50% reduction on taxes for several years. Also if you're quick there is still a chance to get into NHR. it is closing not closed
2:34 I agree it has been a success , but bear in mind : 89,000 enlisted for NHR *Only 10,000 are still here* Cancelling it will make little difference… But many Portuguese think it will … Those Portuguese that think they should have a T2 apartment for €150K when they cost €250K plus are never going to be happy . They need to peek at Spain/Italy/ Croatia/Greece … these (expensive property) problems exist elsewhere….
Regarding housing costs, properties cost what buyers are willing and able to pay. Several publications have stated that Portugal housing prices are overvalued. One of the main factors driving the cost of rental and sales is the influx of money from people who can afford to pay more. If the average Portuguese salaries are low, they can’t afford to pay the higher prices that others can pay. That €250,000 euro home is only €250,000 ,not due to any intrinsic value, but rater because someone decided to pay that much for it. So yes, if demand is reduced from people who are able/willing to pay high prices, the costs will come down.
yes it is a political change not a valuable economic change - the people are not really considering massive inflationary price increases - property everywhere has gone through a massive increase/ correction. Also the income and jobs generated by people spending money.
@@m.g.3021 Utter rubbish! Your thinking is very simplistic and narrow minded. *property prices in Portugal are not high* I’d actually argue that we will continue to see demand outstrip supply and prices will outpace inflation and earnings over the next 10 years as they have over the last 10 years.
@@m.g.3021 While Portugal is sunny and safe. (Thanks to the wonderful GNR, I see no changes here ) Then people from across the EU will always have chance to move here. Particularly wealthy retired and over 50’s. Your have deluded yourself into thinking that this will diminish over time…. but you fail to give a reason !!
It's a progressive tax system, starts at 14.5% for the first 7,479 EUR, then it goes to 21%, etc, up to 48%. There are also tax credits that can reduce total tax owed. It's not that you will get taxed at 48% for all your income.
Thanks for this. I was thinking to myself “surely it’s progressive?!” But couldn’t get certainty on that.
Still not nice as in a fair bit more than UK system but not as bad as a flat 48% if you are over that threshold.
@@RemofRenaissance Yes, better than getting everything taxed at 48%. Also there are credits available to reduce the amount of tax owed. Different categories of credits such as for rental expenses and medical expenses.
Im worried. We are right in the middle of the process and now it’s become very complicated. Our tax attorney and Visa specialist don’t really know what’s going on. We are moving forward but with caution. Our kids are enrolled in school and we were looking at places last week. 48% tax on income over 80K is a lot more vs what we were looking at realistically with NHR. And we can’t get any guarantees that we can get it. VFS meeting in Nov. Temp visa is 45 days later. SEF is 30 days after that. Then takes 2-4 months to get the resident Visa, then 2 more months for NHR approval. If we had the VFS today it would be March or April at best to get if sorted. Having a hard time seeing this working for us and we are far along in the process. Super bummed right now.
I'm two years out and wanted to move to Portugal. I'm screwed
I think (Im still investigating) that there is a 50% tax break for new tax residents for several years. Also still time to get in 🙂
Have you considered the possibility of changing your tax attorney for a better one ?
Good luck with everything… But you need to be in the driving seat, not a passenger.
Take responsibility
What taxes does would one retired person moving to Portugal from USA have to pay on social security and 401K income have to pay now, 2023, vs end of NHR in 2024. Considering move in 2024 but I am confused on all of this. Since you are already paying taxes on your 401k withdrawal in Usa, you still have to pay taxes in Portugal on both Social security and 401K that your earned in US. Dbl.taxation? Writeofs?
The budget that was released a few days ago says you must be a tax resident by the of 2023. They DO NOT want a major influx in 2024. Unless you are already pretty far along in the process it is probably too late.
You are right. They released the budget with the planned legislation. We were about to have our VFS meeting and now have to completely reconsider it.
@@mt4100 Yes need to establish residency by end 2023 then have till end march 24 to apply for NHR. There are other schemes though for 50% tax reduction
@@user-mj6sl9qv8j What about if you are a portuguese citizen but with permanent residency in another country?
In Italy you can (still) get the same total tax benefit anywhere - just you get more in a single year if you head down south. So 30% of income is taxed in the north, 10% in the south however the total tax benefit is capped at the same amount in any 3 year period. So largely in the north you need to cap taxable income to 180k annually, in the south maybe 130k? IDK detail on the latter - Im in the north
Yes you will pay more taxes in Portugal overall compared to US taxes since the deductions are much smaller and the rates a bit higher, however cost of living is dramatically lower (outside Lisbon) than it is in USA.
So for families earning less than $100k/yr USD it’s much better value for your money.
If you’re earning more than that, then the tax changes should really give you pause.
I moved to Spain and I don’t receive a special tax status but we live a much better quality of life even thought we pay about $5k-$10k more a year in taxes.
If you really want to avoid higher taxes, then I recommend island nations w advantageous tax schemes like St. Lucia, OR central or South America, OR extremely high cost of living (ie Singapore).
But if you are middle income person/family and if had your heart set on Portugal for the culture, infrastructure, healthcare, weather of Portugal, then the ending of the NHR program should not dissuade you.
The cost of living is not lower in Portugal than the States !
Please don’t post rubbish !
It all depends on several factors besides tax breaks and each individual has different priorities. For a retiree older than 60, health expenses are top priority that may cause one's bankrrupcy if living in the US.
@@maxflight777I live in Florida and it’s almost double, except maybe the rents in Lisbon. There are a lot of other places to live in Portugal, including the Azores.
@susanner35 I am Portuguese-Bermudian. The cost of living in this BOTC has skyrocketed since March 2020. There is no income tax or taxes levied on retirement funds, but the daily living expenses will eat up any perceived savings. Not enough is grown to supply local consumption. It’s all imported. We have to pay through the nose for EVERYTHING, including travel off island, which are major factors for why I am planning to retire in Portugal late 2025. I expect that my tax implications will be in the similar range as what you are paying. Of course I would need to meet with a Portuguese tax expert to discuss the details💁🏻♂️EJ.
Rents and property prices in Portugal have gone from the cheapest to one of the most expensive in Europe in the last 10 years. It isn't a low cost of living in Portugal compared to many other European countries.
We are retired Americans planning move to Portugal in 2024. We have already invested in Portugal with the purchase of a condo currently under construction. My question is about the taxes for our pension and social security from the US. Is Portugal planning to increase taxes on retirees? I’m not clear on the double taxation agreement between Portugal and US.
You will be taxed at the same rate as a Portugese person now. From a purely financial perspective, it's a good time to sell the condo and start looking at other european countries for retirement e.g. France , Spain, Greece etc
We were seriously looking at Portugal for a country to move to with pre move scouting trip this next year. 48% vs 10% tax rate makes a huge difference and it is likely off our list because of that. I wish it wasn't so but it sure seems to be. I am not sure why if housing costs and supply is such a big reason to stop the NHR program that Portugal doesn't do like Italy or Greece and only allow the NHR program in areas where housing cost and availability are less stressed. That way you get foreigner dollars(Euros) year round, increase economic activity in slow or declining areas while supporting the economy locally and nationally. This goes even further when retirees come and don't displace a Portuguese worker but probably help employ some.
obvs depends on your circumstances but I think that still able to get flat 50% reduction on taxes for several years. Also if you're quick there is still a chance to get into NHR. it is closing not closed
2:34 I agree it has been a success , but bear in mind :
89,000 enlisted for NHR
*Only 10,000 are still here*
Cancelling it will make little difference… But many Portuguese think it will …
Those Portuguese that think they should have a T2 apartment for €150K when they cost €250K plus are never going to be happy .
They need to peek at Spain/Italy/ Croatia/Greece … these (expensive property) problems exist elsewhere….
Regarding housing costs, properties cost what buyers are willing and able to pay. Several publications have stated that Portugal housing prices are overvalued.
One of the main factors driving the cost of rental and sales is the influx of money from people who can afford to pay more. If the average Portuguese salaries are low, they can’t afford to pay the higher prices that others can pay. That €250,000 euro home is only €250,000 ,not due to any intrinsic value, but rater because someone decided to pay that much for it. So yes, if demand is reduced from people who are able/willing to pay high prices, the costs will come down.
yes it is a political change not a valuable economic change - the people are not really considering massive inflationary price increases - property everywhere has gone through a massive increase/ correction. Also the income and jobs generated by people spending money.
@@m.g.3021 Utter rubbish!
Your thinking is very simplistic and narrow minded.
*property prices in Portugal are not high*
I’d actually argue that we will continue to see demand outstrip supply and prices will outpace inflation and earnings over the next 10 years as they have over the last 10 years.
@@m.g.3021 Does it occur to you, that the publications you mention are just;
“telling their readers what they want to read” ?
🤦♂️
@@m.g.3021 While Portugal is sunny and safe. (Thanks to the wonderful GNR, I see no changes here ) Then people from across the EU will always have chance to move here.
Particularly wealthy retired and over 50’s.
Your have deluded yourself into thinking that this will diminish over time…. but you fail to give a reason !!