Portuguese residency - current situation - advice needed

[Pavalijo]

I was going to obtain a Spanish residency last year until somebody told me that I would be required to import (“matriculate”?) the boat and pay a tax of circa (from memory) 11% of its value. My pal had abandoned his plans to relocate from an Algarve marina to Ayamonte because of that and said that Portugal do not require such tax when obtaining residency. I backed off the idea and decided we would wait until reaching Portugal this year (now abandoned).
I had not heard of the requirement to stay in Spain for more than 180 or so days to obtain Spanish residency.
I’m now relying on the Brit heavy tourist countries offering a longer holiday visa. I assume Spain, Portugal etc are told to do no such thing whilst negotiations are underway. Fingers crossed!

 

[nortada]

I was going to obtain a Spanish residency last year until somebody told me that I would be required to import (“matriculate”?) the boat and pay a tax of circa (from memory) 11% of its value. My pal had abandoned his plans to relocate from an Algarve marina to Ayamonte because of that and said that Portugal do not require such tax when obtaining residency. I backed off the idea and decided we would wait until reaching Portugal this year (now abandoned).
I had not heard of the requirement to stay in Spain for more than 180 or so days to obtain Spanish residency.
I’m now relying on the Brit heavy tourist countries offering a longer holiday visa. I assume Spain, Portugal etc are told to do no such thing whilst negotiations are underway. Fingers crossed!

Did your pal give a reason for relocating from The Algarve to Ayamonte

Assuming you are British, if your future final destination is Portugal, if possible, I would suggest getting Portuguese residency before 31/12/20.

 

[Pavalijo]

Did your pal give a reason for relocating from The Algarve to Ayamonte

Assuming you are British, if your future final destination is Portugal, if possible, I would suggest getting Portuguese residency before 31/12/20.

He likes Ayamonte and was looking for a change I think.
We have converted our Berlingo into a mini camper and are considering driving down via the Chunnel and getting residency if possible - but won’t be traveling if it’s not safe.
We don’t have a problem quarantining on return.
If we decide against then we will just have to hope that when the deal is done - or not - that there will be a solution for us. We hope to continue living aboard 5 months a year and being home in the UK for the winter.

 

[lydiamight]

Portugal does have something called "non-habitual residency" it means that all of your income from outside of Portugal, pensions etc, are totally free of Portuguese tax for ten years

 

[nortada]

Portugal does have something called "non-habitual residency" (NHR) it means that all of your income from outside of Portugal, pensions etc, are totally free of Portuguese tax for ten years.

True, but other EU countries are challenging this as a tax fiddle. Moreover, this is more to do with the purchase of property and associated taxes.

Outside of this, Britain has a treaty with Portugal by which all of your income from outside of Portugal, pensions etc, that is taxed elsewhere (The UK) will not be taxed by Portugal. No time limit.

 

[shan]

Portugal does have something called "non-habitual residency" it means that all of your income from outside of Portugal, pensions etc, are totally free of Portuguese tax for ten years

It's now a 10% tax and it depends on the type of pension income. It's not as simple as it sounds - a tax advisor is definitely a good idea.

 

[Pavalijo]

It's now a 10% tax and it depends on the type of pension income. It's not as simple as it sounds - a tax advisor is definitely a good idea.

would I be right in thinking that this would only apply if you stayed in Portugal for 183+ days in a year?

 

[greeny]

would I be right in thinking that this would only apply if you stayed in Portugal for 183+ days in a year?

Whatever the rules are, in my experience no one is counting days on this one.

 

[shan]

would I be right in thinking that this would only apply if you stayed in Portugal for 183+ days in a year?

Basically yes. Bear in mind that to apply for NHR, you can't have been tax resident for the previous 5 years.

 

[shan]

Whatever the rules are, in my experience no one is counting days on this one.

After Brexit, that probably will not be the case.

 

[greeny]

After Brexit, that probably will not be the case.

No ones counting days now and probably won't be after brexit. What would prompt them to ask you if you didn't tell them? No means really of them counting unless you stupidly provide them with the information. Please don't come back with stamping of passports. That's been done to death on here.
To be NHR you have to be a tax payer in Portugal. If you spend less than 183 days here you probably wouldn't be a tax payer. So if they "stop" your NHR on the 183 days basis, you can by their admission take your tax affairs back to UK or somewhere else where you do spend the designated more than 180 days. Not that simple I know but basically they ain't going to bother, it's not in their interests to. NHR only gives you tax exemption for certain things , not all income, so the bottom line is I still pay tax in Portugal, just not as much as I maybe would elsewhere. They are still "making money" out of me.
I've just been through my NHR paperwork and applications and nowhere does it say you must be in the country each year for a set period of time. But you obviously must be a "new" taxpayer and not have paid tax here for the last 5 yrs. Maybe in the Portuguese small print somewhere but I've never seen it nor has it been mentioned to me.

 

[jordanbasset]

Certainly for Spain I was told in an email reply from a Spanish lawyer, when I was enquiring about residency there, that I would lose residency if I spent less than 183 days there, as we arrive on the ferry in Spain and leave on the ferry it would be very easy to check. Am pretty sure their computer systems will have a record, or otherwise how do they know if some one has been longer than 90 days in the schengen zone if they have no records
Could be different in Portugal of course

 

[greeny]

Whilst we're on the subject, by far the most difficult part of getting NHR for me was getting UK to accept that I no longer lived in UK and satisfied all the "not resident for tax" criteria tests on the HMRC system. Just proving you live outside the uk for more than 180 days is not enough to prove non residence. and qualify you for NT. Property, bank accounts, family ties, available accomodation all come into it.

 

[shan]

No ones counting days now and probably won't be after brexit. What would prompt them to ask you if you didn't tell them? No means really of them counting unless you stupidly provide them with the information. Please don't come back with stamping of passports. That's been done to death on here.
To be NHR you have to be a tax payer in Portugal. If you spend less than 183 days here you probably wouldn't be a tax payer. So if they "stop" your NHR on the 183 days basis, you can by their admission take your tax affairs back to UK or somewhere else where you do spend the designated more than 180 days. Not that simple I know but basically they ain't going to bother, it's not in their interests to. NHR only gives you tax exemption for certain things , not all income, so the bottom line is I still pay tax in Portugal, just not as much as I maybe would elsewhere. They are still "making money" out of me.
I've just been through my NHR paperwork and applications and nowhere does it say you must be in the country each year for a set period of time. But you obviously must be a "new" taxpayer and not have paid tax here for the last 5 yrs. Maybe in the Portuguese small print somewhere but I've never seen it nor has it been mentioned to me.

You have to be tax resident to qualify for NHR, which means you have to spend more than 183 days in the country. It's not hard to understand.

3rd countries are treated very differently in the EU to EU members. Currently, we are in the transition period and have member benefits. Post the transition period, we will not have member benefits.

Yes, checking passports is exactly how they will be able to check. After all, passports are checked in Schengen arrangements. People from 3rd countries do get deported for overstaying their welcome so why do you think there will be no penalty for breaking tax residency rules?

 

[greeny]

Certainly for Spain I was told in an email reply from a Spanish lawyer, when I was enquiring about residency there, that I would lose residency if I spent less than 183 days there, as we arrive on the ferry in Spain and leave on the ferry it would be very easy to check. Am pretty sure their computer systems will have a record, or otherwise how do they know if some one has been longer than 90 days in the schengen zone if they have no records
Could be different in Portugal of course

I don't dispute that that may be the case officially. But who is counting? Why would they check you unless you do or say something stupid. As a Portuguese resident I can travel throughout Europe just using my ID card and not my passport. ID cards don't get stamped and they just glance at them and hand them back most of the time.

 

[greeny]

You have to be tax resident to qualify for NHR, which means you have to spend more than 183 days in the country. It's not hard to understand.

I think I said that didn't I?

3rd countries are treated very differently in the EU to EU members. Currently, we are in the transition period and have member benefits. Post the transition period, we will not have member benefits.

Yes, checking passports is exactly how they will be able to check. After all, passports are checked in Schengen arrangements. People from 3rd countries do get deported for overstaying their welcome so why do you think there will be no penalty for breaking tax residency rules?

I am not a third country at the moment and will not be after Brexit . Why do you think we took residence. See my post above reference passport stamping.

 

[shan]

I am not a third party at the moment and will not be after Brexit. Why do you think we took residence. See my post above reference passport stamping.

You will still be a national from a 3rd country. Residency might allow you relative freedom in Portugal in terms of travel but you are limited to 90 days in 180 in other EU member countries. Until it has played out, I think it would be wise not to make any assumptions about what will or will not be traced, logged or taken note of.

 

[greeny]

Shan, it seems you want to believe the absolute worst case scenarios on this one and are only interested in the doom and gloom of future threats to our lives.
Reality will prevail.

 

[jordanbasset]

I don't dispute that that may be the case officially. But who is counting? Why would they check you unless you do or say something stupid. As a Portuguese resident I can travel throughout Europe just using my ID card and not my passport. ID cards don't get stamped and they just glance at them and hand them back most of the time.

But if you travel back and to from the UK it will be easy to check. Not saying they would, Portugal does seem more relaxed than other countries and if people are happy to take the risk that is their choice. It was certainly made clear to me that it was a very real possibility as far as Spain is concerned
The trouble is people are going on what has happened so far, when we had freedom of movement, people should not rely on that post 2021

 

[shan]

Shan, it seems you want to believe the absolute worst case scenarios on this one and are only interested in the doom and gloom of future threats to our lives.
Reality will prevail.

No, I want to know what will actually happen in practice rather than dismiss any potential problems out of hand. You can't deal with problems if you don't know what they are and in addition, I don't believe in breaking the laws of the country one resides in, even if it is possible.