Despite the attractive tax benefits of Portugal's NHR tax regime, the wealthy expats survey revealed that only 27% of existing NHR tax status holders have taken steps to plan for the future when their NHR incentives expire. This means the majority of existing NHR tax holders could face higher taxes if they don’t seek urgent professional advice.

Portugal Pathways tax experts have urged existing NHR tax holders to be proactive and take action early to mitigate progressive tax rates of between 28-48% through structuring their income and assets as early as possible.

Portugal Pathways said:

"Many affluent expats are lulled into a false sense of security by the NHR tax regime's low tax rates. Many fail to realise that these benefits are temporary, and that failing to plan early enough for the future could have serious financial consequences.

Once the NHR tax incentive period expires, a large majority of expats become subject to Portugal's progressive tax system, which can dramatically increase their tax burden to as much as 48%.

Those that seek advice and structure their income and assets in the first 7 years of their 10 year NHR tax benefit have a chance to mitigate this challenge subject to their personal financial situation.”

Case studies have shown that typically a person or family who have a million euros or more of income or assets could potentially reduce this tax burden post NHR to anywhere between 4 and 10% per annum if they take early action in their NHR tax life.

Acting early in their NHR tax life enables existing NHR tax holders the opportunity to mitigate future tax burdens by optimising tax-efficient structures and contacting professional advisors now is becoming an urgent matter for many affluent expats in Portugal.

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Mitigating serious tax burden through early planning

Proactive planning within the first seven years of your NHR tax status life can significantly reduce future tax burdens for up to two decades.

Restructuring your portfolio to favour tax-efficient investments, such as capital gains-exempt or tax-deferred options, can minimise tax liabilities.

Leveraging Portugal's tax deductions and credits for mortgage interest, medical expenses, and charitable donations can further optimise your financial situation.

Jamie Andrews, an existing NHR tax status holder currently living in the Algarve said:

“Following advice from Portugal Pathways tax & cross border wealth management we were able to use our €1.4m of income from our pension and other assets into a new structured plan which is looking like it is going to deliver not only capital growth but just 4.8% tax per year on average in the years following the end of our NHR tax benefit.

This means we can continue to enjoy life in Portugal safe in the knowledge that we have planned early to avoid unnecessary tax burden through excellent support and advice.”

Don't Wait Until It's Too Late

By taking early action and seeking expert guidance, you can safeguard your financial future and continue to enjoy the benefits of living in Portugal.

Contact Portugal Pathways expert team for personalised guidance for existing NHR tax holders structuring their income, assets, tax, and investments for the long term.