- Portugal to scrap ‘golden visas’ for British expats despite political crisis
- The decision sparked outrage among the British expat community in Portugal
LISBON: Portugal has confirmed that it will proceed with its plans to end the lucrative tax breaks for thousands of British expats who have settled in the country under the non-habitual resident (NHR) regime.
The NHR regime, which was introduced in 2009, allows foreign residents to enjoy a 10-year tax exemption on their foreign income, as well as reduced rates on some domestic income sources. The scheme has attracted many wealthy Britons, especially retirees, who have bought properties and invested in Portugal.
However, the Portuguese government announced earlier this year that it would phase out the NHR regime for new applicants from January 1, 2024, as part of its efforts to reform the tax system and increase revenue. The existing beneficiaries of the scheme will not be affected by the change.
The decision sparked outrage among the British expat community in Portugal, who feared that they would lose their attractive tax status and face higher costs of living. Some also hoped that the government would reconsider its plans after it collapsed earlier this month, following a vote of no confidence by the opposition parties.
However, the Portuguese finance minister, João Leão, said on Wednesday that the government would stick to its original proposal and end the NHR regime for new entrants next year. He said that the measure was “fair and balanced” and that it would not harm the country’s attractiveness for foreign investment.
He also said that the government was confident that it would pass the 2024 budget, despite the political uncertainty and the ongoing negotiations with the other parties. He said that the budget was “essential” for the recovery of the Portuguese economy, which has been severely hit by the Covid-19 pandemic and the Brexit fallout.
