Date: October 15, 2023
By Scott Kirk
LISBON – The announcement by the Portuguese government that they will cease the Non-Habitual Residency (NHR) program in 2024 has stirred significant discussions among expatriates in the “Living in Portugal” online group. To gauge the impact of this decision, the group conducted a poll asking users, “Would you move to Portugal (or would you have moved) if NHR wasn’t an option?” Out of the 330 respondents, 62% answered yes, 16% said no, 9% were unsure, and 13% admitted they didn’t know what NHR entailed.
The poll, sponsored by www.BuyProperty.com, aimed to understand how the cessation of the NHR program might affect the expatriate community in Portugal. The discussion among users highlighted the complexities of taxation, especially concerning Americans living abroad.
Larry W, a prominent member of the group, initiated the conversation by asserting that the discontinuation of NHR might not significantly impact Americans due to the U.S. tax regulations. This sparked a debate, with participants like Bob B and Mike K pointing out the intricate details of American tax laws and how NHR could indeed influence their financial decisions.
The discussion underscored the confusion surrounding the U.S. Foreign Earned Income Exclusion (FEIE) rule, where participants like Christopher K shared their frustration about the lack of clarity from tax advisors. Larry W and Mike K further delved into the details of how capital gains are taxed, emphasizing the nuanced nature of the impact on Americans, depending on their income sources and total taxable income.
Gabriela I and Craig B contributed to the conversation by shedding light on specific exemptions under NHR, highlighting that while certain incomes are exempt in Portugal, they are taxable in the U.S. Despite potential tax benefits, others like Ian S expressed concerns that the Portuguese tax rates might outweigh the advantages of NHR for some expatriates.
Carlos C brought skepticism into the conversation, suggesting that only retired individuals might choose to stay in Portugal after the termination of the NHR program. Meanwhile, Bill T shared his personal experience, stating that his decision to move on from Portugal after 2 1/2 years was unrelated to the NHR program.
As the NHR program’s end draws near, the diverse perspectives shared by expatriates in the “Living in Portugal” online group reflect the challenges and uncertainties faced by those considering Portugal as their home. The discussions highlight the need for comprehensive information and clarity on international tax regulations, underscoring the complex decisions that expatriates must navigate when choosing their new home.
Scott Kirk serves as the Administrator for both the “Living in Portugal” and “Moving to Portugal” Facebook groups. Together, these groups and others boast a membership of over 550,000 individuals and receive a monthly traffic of 2.4 million visits. By actively engaging with current events, these groups provide real-time reactions, demonstrating keen awareness and expertise in the field.