For years, Portugal has been one of Europe’s most attractive countries for expatriates, largely thanks to its Non-Habitual Resident (NHR) status. Introduced in 2009, this tax regime attracted thousands of French speakers — especially in the Algarve — with its unique combination of quality of life and fiscal advantages.
But since the reform that took effect in early 2024, the rules have changed: NHR is no longer available to new retirees. It now applies exclusively to professionals in certain targeted fields. In this article, we’ll explain what is still possible, who is eligible, and why the Algarve remains a top choice for newcomers.
What is NHR status?
Launched by the Portuguese government in 2009, the NHR (Non-Habitual Resident) regime was designed to strengthen the country’s fiscal appeal for qualified foreigners, investors, and retirees. It offered a favorable tax regime for 10 years on certain types of income.
Since 2024, under the State Budget (Orçamento do Estado), NHR has been refocused on its original purpose: attracting high-value-added professionals. Retirement pensions, once included in the scheme, are no longer eligible for new applicants.
Who can benefit from NHR in 2025?
To obtain Non-Habitual Resident status today, you must meet all of the following conditions:
- Not have been a Portuguese tax resident in the five years prior to moving
- Reside in Portugal for more than 183 days per year, or own a permanent home declared as your primary residence
- Work in a profession listed as high value-added (examples: engineering, medicine, IT, business management, research, architecture, design, finance, arts)
- Obtain a Portuguese tax number (NIF) and register as a resident
- Submit your NHR application before March 31 of the year following your arrival
⚠️ Retirees are no longer eligible for NHR, unless they obtained the status before the 2024 reform. In that case, they retain their rights for the remainder of their 10-year period.
Tax benefits of NHR status
For qualified professionals, NHR still offers significant advantages for up to 10 years:
1. Professional income in Portugal
Income earned from an eligible activity is taxed at a flat rate of 20%, instead of Portugal’s progressive income tax rates (which can reach 48%).
2. Foreign-source income
Foreign income (dividends, interest, rental income, capital gains) may be exempt from Portuguese tax, provided it is taxed in the country of origin, under applicable double taxation treaties.
Why choose the Algarve for NHR?
Portugal as a whole is attractive, but the Algarve, in the south, is often a true favorite among newcomers. It combines an exceptional lifestyle with strong economic appeal:
☀️ Mediterranean climate, with more than 300 days of sunshine per year
🏖️ Stunning beaches, cliffs, natural parks, and coastal trails
🏥 High-quality infrastructure: private clinics, international schools, high-speed internet
🧑🤝🧑 Established French-speaking community and multilingual services
🏡 Premium real estate: villas with pools, sea-view apartments, plots of land, new developments
What type of real estate for an NHR profile?
At Hardy & Hardy, we assist many active professionals and entrepreneurs moving to the Algarve with NHR status. Their projects vary depending on their goals:
- A primary residence near a dynamic hub such as Lagos, Faro, or Loulé
- A villa in a quiet residential area with home office space and garden
- A high-end rental investment targeting expatriates, digital nomads, or corporate executives
As a French-speaking agency with strong local roots, we provide tailor-made support: property selection, legal due diligence, tax advice, notary assistance, and relocation steps.
How to obtain NHR status: the steps
📝 Get a NIF (Portuguese tax number)
🏠 Buy or rent a home declared as your primary residence
🏦 Open a Portuguese bank account
🧾 Register as a tax resident with Finanças
💻 Apply online for NHR status (before March 31 of the following year)
📚 Provide professional documentation (contract, diploma, activity code)
👉 Are you an entrepreneur or freelancer? You can set up a local structure (ENI or LDA) to carry out your activity and benefit from NHR.
FAQ – Frequently Asked Questions (2025 version)
Can I benefit from NHR if I am retired?
No. Since 2024, pensions no longer qualify for new residents. Those who enrolled before that date keep their rights until their 10-year period ends.
Do I have to work in Portugal?
Not necessarily, but you must practice an eligible activity, even remotely, and provide proof of income. Remote work is fully compatible.
Can I combine NHR with other income sources?
Yes, you can earn both Portuguese professional income and foreign income. Each will be treated according to NHR rules.
Do I need to buy property to be eligible?
No, a long-term rental is sufficient. However, buying property reassures tax authorities of your intent to settle permanently.
In summary: NHR, still a strategic lever for professionals
The NHR regime has changed, but it remains an exceptional opportunity for professionals, entrepreneurs, and executives seeking to relocate to an incomparable living environment while optimizing their tax situation. In the Algarve, conditions are ideal to combine work and quality of life.
At Hardy & Hardy, we put our expertise at your service: targeted property searches, connections with lawyers, and full relocation support.
📞 Are you a professional or entrepreneur planning to move to Portugal?
📍 Contact us for a personalized consultation
🏡 Explore our Algarve properties
🧑⚖️ Benefit from our network of French-speaking legal and tax partners
📚 Official & reliable sources:
Specialized tax firms: PwC Portugal, Dixcart Group, etc.
Portuguese Government: Orçamento do Estado 2024 – Finanças
Jornal Público (NHR reform): https://www.publico.pt/2023/10/03/politica/noticia/governo-acaba-rnh-2048845