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Advantage Portugal!

Advantage Portugal!

The Portuguese Government is leading the way in encouraging foreign property investment. In direct contrast to other European countries, such as Spain and Greece, who are imposing prohibitive taxes and legislation designed to make investing in property harder for non residents, Portugal has finally opened it’s eyes to the amount of money that can be generated through foreign investment.

The Government is now very keen to promote and incentivise foreign homeownership to support Portugals often fragile economy. Alvaro Santos Pereira, the Minister for Economy, said recently that residential tourism generates 9% of the countrys GDP and 8% of employment. The Government is keen to build on this and believes the sales of just 4,000 more properties would bring in additional revenue of €1bn,

“We need to increase these numbers” the minister said, “Investing in residential tourism is investing in our economy, contributing to job creation and providing a boost to the construction and real estate industries.”


The 2 most important incentives the Government has implemented are the Non Habitual Residency Scheme (NHR) and the new legislation on rental income.


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The NHR program is a scheme for individuals who have not been tax resident in Portugal at any time during the last 5 years. Once an individual is granted NHR status they will be exempt from income taxes (work, royalties,interest, dividends and pensions are all exempt) for a period of 10 years.


The new rental legislation, again for individuals who are tax resident, is very much easier than previous laws. The simplified regimes means 85% of rental income is automatically classed as expenses so you are only taxed on the remaining 15% at a flat rate of 25%. This means in real terms that you only pay 3.75% tax and with gross rental yields varying between 5-10% depending on location and marketing, it makes the potential for investment earnings fantastic.


With the market now back to 2010 levels and still improving and prices on the rise once again, there really is no better time to buy your investment or retirement property in the Algarve.


For further details on how to take advantage of these incentives and find your Ideal Home in the Algarve please contact us on 0800 133 7644, enquiries@idealhomesportugal.com or visit our websitewww.idealhomesportugal.com today!