This guide explains taxes in Portugal for expats in 2026: tax residence, income tax rates, IFICI after NHR and filing your return.
What changed in 2025 and 2026
Portugal changed its income tax table twice in 2025, set a new table for 2026, widened IRS Jovem to everyone up to 35, and in May 2026 added a capital gains exemption for owners who reinvest in affordable rental homes. Many English-language guides still describe NHR as open and quote older rates.
| Change | Date in force | What it means for you |
|---|---|---|
| IRS Jovem extended (Lei n.º 45-A/2024, State Budget for 2025) | 1 January 2025 | Taxpayers up to 35 who are not dependants get a partial exemption on employment and self-employment income for ten years, whatever their education. Expats who are or were on NHR or IFICI are excluded. |
| Last window for NHR closed | Applications for people who became resident in 2024 were due by 31 March 2025 | NHR was revoked from 1 January 2024, with transitional access only for people who met the conditions by the end of 2023 or became resident by 31 December 2024. New arrivals from 2025 cannot apply. |
| Mid-year amendment of the income tax table (Lei n.º 55-A/2025) | 22 July 2025 | The rate table in Article 68 of the IRS Code was rewritten during the 2025 tax year. |
| New income tax table (Lei n.º 73-A/2025, State Budget for 2026) | 1 January 2026 | The nine bands now run from 12.5% on the first €8,342 of taxable income to 48% above €86,634. |
| Social support index (IAS) for 2026 | 1 January 2026 | The IAS is €537.13, which sets the IRS Jovem cap at €29,542.15 and the minimum contribution base for company directors. |
| Minimum wage for 2026 | 1 January 2026 | €920 a month, which matters for several visa income tests and social security calculations. |
| Capital gains exemption for reinvestment in rental homes (Decreto-Lei n.º 97/2026) | Published 20 May 2026; covers sales from 1 January 2026 to 31 December 2029 | Gains on selling a home can be exempt if the proceeds are reinvested in Portuguese property let as a home at a rent of no more than €2,300 a month, subject to conditions. |
Correcting an outdated assumption. Many articles still say a new resident can register for NHR and pay 10% on a foreign pension. That is no longer true for anyone arriving now. NHR was revoked on 1 January 2024 and the last transitional applications, for people who became resident during 2024, closed on 31 March 2025. IFICI, sometimes called “NHR 2.0”, is narrower and expressly excludes pension income from its foreign income exemption.
Are you a Portuguese tax resident?
You are a Portuguese tax resident if you stay in Portugal for more than 183 days, consecutive or not, in any 12-month period that starts or ends in the tax year, or if you have a home there on any day of that period that you appear to intend to keep and occupy as your habitual residence. Any day on which you spend the night in Portugal counts as a day of presence.
| Test | What counts | Practical point |
|---|---|---|
| Physical presence | More than 183 days in any 12-month period beginning or ending in the tax year | Count nights, not working days, in your year of arrival |
| Habitual residence | A home available to you, in conditions that suggest you intend to keep it as your main home | A long lease or a purchased home can make you resident with far fewer than 183 days |
| Start of residence | Normally the first day of your stay | Your first Portuguese return may cover only part of the year |
| End of residence | Normally the last day you are present | Leaving partway through a year can split it, with exceptions for people who earn Portuguese-taxable income after they leave |
| Double taxation agreement | A treaty tie-breaker can decide residence if both countries claim you | Relevant in the year you move from the UK or the US |
Residence is assessed separately for each member of a household, so one spouse can be resident and the other not. Residents are taxed on their worldwide income; non-residents are taxed only on income arising in Portugal, and non-residents’ Portuguese employment, self-employment and pension income is generally taxed at a flat 25% for 2026.
If you are still arranging your visa, read how to get residency in Portugal alongside this guide: a residence permit and tax residence are separate questions, and you can have one without the other.
Warning: Tell the tax office when your status changes. The General Tax Law requires taxpayers to report a change of residence status to the Tax and Customs Authority (AT) within 60 days. If you obtained your NIF as a non-resident, update your address on the Portal das Finanças once you move, or your record will still show a foreign address and a representative you may no longer need.
Portuguese income tax rates for 2026
Portugal taxes residents’ employment, self-employment, pension and some other income together at progressive rates from 12.5% to 48%. The rate on each slice is shown below; the “deductible amount” is a shortcut that lets you apply the top rate to the whole taxable income and subtract a fixed figure.
| Taxable income (€) | Rate on this band | Deductible amount (€) |
|---|---|---|
| Up to 8,342 | 12.5% | 0 |
| 8,342 to 12,587 | 15.7% | 266.94 |
| 12,587 to 17,838 | 21.2% | 959.26 |
| 17,838 to 23,089 | 24.1% | 1,476.45 |
| 23,089 to 29,397 | 31.1% | 3,092.77 |
| 29,397 to 43,090 | 34.9% | 4,209.94 |
| 43,090 to 46,566 | 43.1% | 7,743.27 |
| 46,566 to 86,634 | 44.6% | 8,441.48 |
| Above 86,634 | 48.0% | 11,387.17 |
Source: Article 68 of the IRS Code as amended by Lei n.º 73-A/2025.
On top of these rates, an additional solidarity rate of between 2.5% and 5% applies to taxable income above €80,000, rising to the top rate above €250,000. Married couples and couples in a de facto union can opt for joint taxation, in which case their combined taxable income is divided by two before the rates are applied.
Worked example. A resident with €30,000 of taxable income pays (30,000 × 34.9%) − 4,209.94 = €6,260.06 before credits and deductions, an average rate of about 20.9%. Personal deductions for dependants, health, education and housing costs then reduce the bill further, so the tax actually paid is usually lower.
If you are working out a budget, the cost of living in Portugal guide shows how net income compares with rents and everyday costs in different regions.
NHR has closed: who still benefits, and what IFICI offers
The non-habitual resident regime still runs for people already registered, for its ten-year term, but new arrivals can only use IFICI, which gives a 20% rate on qualifying work income and exempts most foreign income for ten years. The two regimes are often confused, and the difference matters most for retirees.
| Feature | NHR (closed to new applicants) | IFICI (open) |
|---|---|---|
| Who can use it | People registered by the transitional deadlines, mostly those resident by 31 December 2024 | New residents in qualifying research, innovation, start-up and highly skilled roles in eligible entities |
| Residence condition | Not taxed as a Portuguese resident in any of the previous five years | Not tax resident in any of the previous five years, and never on NHR or the returning residents regime |
| Portuguese work income | 20% on high-value activities | 20% on qualifying employment and self-employment income |
| Foreign pensions | 10% flat rate | Not exempt; taxed at the normal progressive rates |
| Most other foreign income | Generally exempt | Generally exempt (employment, business, investment, rental and capital gains), except income from listed tax havens |
| Duration | Ten years from registration | Ten years |
| Application deadline | 31 March of the year after becoming resident (now passed for new cases) | 15 January of the year after becoming resident |
IFICI is not a lifestyle regime. Article 58-A of the Tax Benefits Statute lists the eligible activities: higher education teaching and scientific research, qualified jobs in projects with contractual investment benefits, highly qualified professions in companies with relevant investment or exporting at least half their turnover, qualified roles in entities recognised by AICEP or IAPMEI, research and development staff, jobs at certified start-ups, and certain roles in the Azores and Madeira. Registration runs through bodies such as FCT, AICEP, IAPMEI, Startup Portugal or the tax office, depending on the route, and the regime can be used only once. If you will work remotely for a foreign employer on a digital nomad visa, do not assume you qualify: the activity and the entity both have to fit the rules.
Warning: Miss 15 January and you lose the year. The IFICI application is due by 15 January of the year after the year you become tax resident; a late registration only takes effect from the year in which it is made. Someone who becomes resident in September 2026 should apply by 15 January 2027. Ask your employer or the relevant certifying body to start the process well before then.
IRS Jovem and the returning residents regime
Two further regimes can cut tax on work income: IRS Jovem for anyone up to 35, and a 50% relief for former Portuguese residents who return. Neither covers pensions or investment income.
| Regime | Who qualifies | Relief | Limits |
|---|---|---|---|
| IRS Jovem | Taxpayers up to 35 who are not dependants and are not on NHR or IFICI | 100% of employment or self-employment income exempt in year one, 75% in years two to four, 50% in years five to seven, 25% in years eight to ten | Capped at 55 times the IAS, which is €29,542.15 for 2026; claimed by ticking the option on your return |
| Returning residents | People who were tax resident in Portugal before, then non-resident, and become resident again in 2024, 2025 or 2026 | 50% of employment or self-employment income excluded from tax | Relief capped at €250,000 a year; first year of residence and the following four years; not available with NHR |
IRS Jovem counts years of earned income, not years since you arrived: three earlier years of qualifying income put you at the year-four percentage, and years without such income pause the clock. The exemption is not automatic; it applies only when you choose it on your return. For expats moving in their twenties or early thirties to take a Portuguese job, this can be worth more than any other regime, and working in Portugal as an expat explains the employment side.
How investment, rental and pension income is taxed
Most investment income and capital gains are taxed at a flat 28%, residential rents at 25% or less, and foreign pensions at the normal progressive rates unless you are still on NHR. Residents can sometimes choose to add investment income to their other income instead, which helps people on low overall incomes.
| Income | Standard treatment for residents (2026) | Points to note |
|---|---|---|
| Dividends and interest | 28% flat rate | You can opt for the progressive rates instead; 35% applies to income from listed tax havens |
| Gains on shares and funds | 28% flat rate | For listed securities and fund units held more than two years, 10% to 30% of the gain is excluded depending on how long you held them; short-term gains are aggregated for high earners |
| Gains on property | 50% of the gain added to your other income and taxed at progressive rates | Exemption possible if you sell your own home and reinvest in a main home in Portugal or the EU within the time limits |
| Residential rent | 25% special rate | 10% for leases at rents of no more than €2,300 a month until 31 December 2029; other rental income 28% |
| Pensions | Progressive rates, after a deduction of €4,587.09 | Includes UK State Pension and most private pensions once you are resident |
Selling a home. A resident who sells a home that was their own and permanent home in the previous 12 months can avoid tax on the gain if the proceeds are reinvested in another main home in Portugal or the European Union, either within 24 months before or 36 months after the sale. Since May 2026, Decreto-Lei n.º 97/2026 also exempts gains on homes sold between 2026 and 2029 if the proceeds go into Portuguese property let as a home at a rent of €2,300 a month or less. Anyone planning to buy property in Portugal as a foreigner should plan the sale of their UK home and the Portuguese purchase together.
Callout: The landlord’s lower rate. If you let out a Portuguese flat on a long-term residential lease, the rate can fall from 25% to 10% where the rent is no higher than €2,300 a month. Make sure the lease is properly declared to the tax office, because the reduced rate depends on the contract meeting the conditions.
Self-employed and freelance expats
Freelancers in Portugal register their activity with the tax office, usually start under the simplified regime, and pay social security at 21.4% on a reduced base. The simplified regime taxes a fixed share of your turnover rather than your actual profit.
| Item | Rule for 2026 |
|---|---|
| Taxable share of professional fees (simplified regime) | 75% of fees for professions listed in the official table of professional activities |
| Taxable share of other services | 35% of fees for services not on that list |
| Expense justification rule | Part of the deduction depends on showing expenses of at least 15% of gross service income; any shortfall is added back to taxable income |
| Social security rate (self-employed) | 21.4% |
| Social security base | One third of “relevant income”, which is 70% of service income, assessed on the previous three months |
| Cap on the contribution base | 12 times the IAS each month |
| Contribution by a main client | 10% if 80% or more of your fees come from one client, 7% if 50% to 80% |
Digital nomads who invoice through a UK company or work under a foreign contract face a different analysis, but once resident, all your work income goes on your Portuguese return, and Portuguese social security may apply unless a certificate keeps you in another country’s system. If you want to set up properly, read how to start a business in Portugal as a foreigner and speak to an accountant before your first invoice.
Freelancing in Portugal? Get your registration right
Find accountants who handle activity registration, simplified regime returns and social security declarations for foreign freelancers
Property, inheritance and gift taxes
Portugal has no general wealth tax, but property owners pay an annual municipal tax (IMI), owners of high-value property pay an additional charge (AIMI), and inheritances and gifts can attract 10% stamp duty.
| Tax | Who pays | Rate |
|---|---|---|
| IMI (municipal property tax) | Owners on 1 January each year | 0.3% to 0.45% of the registered tax value of urban property, set by each municipality; 0.8% for rustic land |
| AIMI (additional IMI) | Individuals whose residential property and building land is worth more than €600,000 in tax value | 0.7% above the deduction; 1% on the part above €1,000,000 and 1.5% above €2,000,000 |
| Stamp duty on inheritances and gifts | The person receiving | 10%, with an extra 0.8% on gifts of property; exemptions for close family exist, so check the rules for your relationship |
| Net wealth tax | Not applicable | Portugal has no net wealth tax |
| Property transfer tax (IMT) | The buyer | Depends on the price, the type of property and whether it will be your own home |
IMI is charged on the registered tax value (valor patrimonial tributário), not the market price. The AIMI deduction of €600,000 applies to each individual taxpayer, and the thresholds for the higher AIMI rates double for married couples who opt for joint taxation. Tenants do not pay IMI, which is one reason the costs in renting in Portugal look lower than the running costs of ownership.
Filing your return: NIF, dates and fiscal representatives
Every resident with taxable income files a return (Modelo 3) online through the Portal das Finanças between 1 April and 30 June for the previous calendar year. For returns filed on time, the tax office should issue its assessment by 31 July and any tax due is payable by 31 August.
| Step | When | Notes |
|---|---|---|
| Get a NIF (tax number) | Before you rent, open a bank account or sign a work contract | Needed for almost every transaction in Portugal |
| Confirm invoices on e-Fatura | By the deadline the tax office sets early in the year | Health, education, housing and general expenses with your NIF feed your deductions |
| File the return | 1 April to 30 June | Covers income from 1 January to 31 December of the previous year |
| Assessment issued | By 31 July | For returns filed electronically on time |
| Pay any balance | By 31 August | Refunds are paid to the IBAN on your Portal das Finanças record |
Residents must declare foreign bank accounts on their annual return, and since the 2024 State Budget the return must also report assets held in listed tax havens. Your foreign income goes on the return’s foreign income annex, with any foreign tax paid, so that the credit is applied.
A Portuguese IBAN registered on the Portal das Finanças makes refunds straightforward; see how to open a bank account in Portugal.
Callout: Fiscal representatives after Brexit. Non-residents who live outside the EU and EEA, which now includes the UK, must appoint a tax representative resident in Portugal unless they sign up for the tax office’s electronic notification service. For EU and EEA residents the appointment is optional. If you hold a Portuguese NIF while still living in the UK, check which applies to you, because cancelling electronic notifications only takes effect once a representative has been appointed.
Double taxation: UK, EU and US nationals
Portugal gives a credit for foreign tax paid on foreign income, capped at the Portuguese tax on that income and, for treaty countries, at the treaty rate, and the UK–Portugal double taxation agreement decides which country taxes each type of income.
| Your situation | Main points to check |
|---|---|
| UK nationals with UK pensions | Once you are Portuguese resident, most UK pensions are reported in Portugal; check how the treaty treats your type of pension, and ask HMRC to stop UK tax deduction where the treaty allows |
| UK nationals letting a UK property | UK rent is usually taxed in the UK first and declared in Portugal with a credit for UK tax |
| UK State Pension | Increased each year for people living in the EEA, including Portugal, according to GOV.UK |
| EU nationals | No visa, but the same tax residence tests and the same return; your home country’s treaty with Portugal applies |
| US citizens | The United States taxes citizens wherever they live, so you file in both countries and rely on credits and the treaty to avoid paying twice |
GOV.UK’s Living in Portugal guidance, last updated on 10 July 2026, points UK nationals to the UK–Portugal double taxation agreement and tells them to contact the Portuguese Tax and Customs Authority about relief in Portugal. The year of arrival, a UK property, a UK company or a US filing obligation each create traps that a standard Portuguese return handles badly. The expat tax advisers in Portugal guide explains how to choose one and what to ask, and the complete moving to Portugal from the UK checklist covers the HMRC side of leaving, while the main guide on how to move to Portugal and the Portugal country hub bring the rest of the move together.
Get cross-border tax advice for your Portuguese move
Shortlist advisers who understand UK pensions, US filing and the Portuguese regimes for new residents
Frequently asked questions
