The annual income limit for self-employed workers who are VAT exempt increases from €10,000 to €12,500. The uplift was approved by the General Assembly as part of the belatedly approved 2020 State Budget.
Despite an inauspicious start in 2009, the “NHR” programme has gained relevance, attracting thousands EU “tax refugees” to Portugal. Since 2014, new applicants have increased by 1400%. Between September of 2018 and March of this year, the number of new non-habitual residents rose by over 26%. Brazilians recorded the most significant jump with a gain of 52%, surpassing the Swedes. Citizens who qualify for “NHR” status pay “IRS” at a flat rate of 20% when they are linked to high added-value activities in Portugal. However, this group of targeted professionals accounted for just 7% of total applicants. Most are pensioners, seeking a 10-year tax holiday on their retirement benefits. In 2017, new “NHR” retirees numbered almost 10,000.
The World Travel & Tourism Council estimates that tourism in Portugal will expand by 5.3% in 2019, more than double the European average of 2.5%. Last year, the sector grew by 8.1%, contributing €38.4 billion to the Portuguese economy, a total of 19.1% of the country’s overall economic activity.
Over the past four decades, global warming has taken hold in Portugal according to statistics gathered by the Instituto Português do Mar e da Atmosfera ‑ IPMA. Maximum temperatures have increased by 1.6ºc over the past 40 years and summer has stretched by 6 more weeks in the north and centre of the country, as defined by the number of days with temperatures above 25ºc. This trend has been less pronounced in the south. There has also been less rain leading to more frequent severe droughts.
The distraction of holidaymakers and the lack of security at some “AL” flats have led to a rise in thefts at Local Lodging establishments, mainly those located in the “Baixa” district of downtown Lisbon. In response, law enforcement (“PSP”) has started a prevention program with the owners called “Blue Lock”.
If you are a landlord and, during the term of a lease, increase your tenant’s rent by the amount of inflation (the maximum allowed by law), you must inform Finanças what the new rent will be. This communication to the Tax Authority is mandatory and can lead to the payment of a 10% Stamp Duty on the amount of the monthly rent increase.
The new value must be communicated through the “AT” website by the end of the month following the month in which the change occurs. Payment can be made at the Local Finanças office, at an ATM or via electronic banking. When communicating the change online, you will be issued a payment note with the multibanco payment reference on the “AT” website.
If the amount due is less than €10, there is a technical exemption, and no tax is due. For example, you charged a monthly rent of €500 in 2017. The inflation adjustment percentage is 1.15% or €5.75. The difference is less than €10 so no Stamp Duty is due.
In June of 2018, 68,310 Local Lodging registrations exist as compared to 23,136 in 2015, an increase of almost 300% in three years. Over the same period, tax revenues have more than doubled. 73% of “AL” accommodations are outside Lisbon and Porto, with over a third in the Algarve.
The Secretary of State for Tourism, Ana Mendes Godinho, announced that currently there are 59,000 Local Lodging registrations whereas of December 2015 the total was 28,000. She attributed the increase in large part to the legal obligation of digital platforms to display formal enrolments.
Last year, 152,000 homes were sold in Portugal, an increment of 25%. French and Brazilian are the foreigners who are buying more properties. The jump in demand also led to a substantial increase in prices: Lisbon up 37%, Oporto 29%, Madeira 24% and the Algarve 18%.
According to data from the National Statistics Institute (INE), holidaymakers spent more than €23 billion in Portugal in 2016. Over 28 million visitors entered the country. The number of overnight stays exceeded 144 million. Tourism is growing four times faster than the rest of the Portuguese economy and represents 7% of the gross domestic product.