The value of tax benefits to non-habitual residents keeps growing according to the “Tribunal de Contas” (National Audit Office). In 2018, there were €548 million in NHR exemptions granted to foreign pensioners. Nevertheless, this apparent tax giveaway would have never existed if the NHR regime had not attracted these foreigners to Portugal in the first place. For example, these pensioners paid almost €80 million to the state in Individual Income Tax (“IRS “) on non-exempt income. In addition, there are IMT, IMI and VAT levies which the Government collects above and beyond the scope of the Non-Habitual Residency scheme.
“IMI” (Municipal Property Tax) is a tax applied on the value of the rateable value (VPT) of all real property within the national jurisdiction, reverting in favour of the 308 municipalities.
Each township is free to determine the tax rate between 0.3 – 0.5%.