‘Europe’s best kept secret’: More and more Belgians move to Portugal for the sun and to escape taxes
Wednesday, 31 July 2019
More and more Belgians and other EU citizens choose to live in Portugal for the sun and to benefit from tax loopholes and deals.
Dubbed as “Europe’s best kept secret” by consulting firm PWC, following Portugal’s introduction of the non-habitual residency (NHR) tax regime in 2009, it is no surprise that ultra and high-net worth individuals choose to take up residence in the country.
In effect, the special tax regime allows for a flat income tax rate of 20% for income generated in Portugal and an exemption for almost all foreign source income.
According to Expat Insider, over 20,000 EU citizens currently live in Portugal under the non-habitual resident regime.
Pensions paid abroad to non-habitual residents are also tax-exempt. The requirement is to live in the country for 183 days a year or own a property with the intention that it becomes a permanent residence.
Capitalising on the low cost of living, pleasant weather and interesting real estate opportunities, more and more Belgians have consequently chosen to retire in Portugal.
However, Portugal’s generosity to foreigners isn’t appreciated by all. Locals have seen property prices increase by over 6% in the last year, while they also pay up to 48% on their pensions.
“Portuguese people feel they are being discriminated. They do pay tax on their pension that is usually lower, while affluent north Europeans don’t,” says VRT’s José Da Silva.