Non-Habitual Resident (NHR) regime – Status in 2026
Although the Non-Habitual Resident (NHR) regime is now closed to new entrants, it remains relevant in 2026.
This insight outlines the current status of the regime, the scope of the transitional rules and the situations in which NHR may still be accessed or relied upon in practice.
What is the NHR regime?
The Non-Habitual Resident (NHR) regime was introduced in 2009 with the aim of attracting highly qualified professionals, pensioners and internationally mobile individuals to Portugal by granting favourable Personal Income Tax (IRS) treatment.
Under the regime, eligible taxpayers could benefit, for a period of 10 consecutive years, from a combination of a 20% flat tax rate on certain Portuguese-source employment or self-employment income, 10% flat tax rate on foreign sourced pension income and exemptions on most categories of foreign-source income, depending on the applicable double tax treaties.
The end of the NHR regime
The NHR regime was ended in 2024, following the announcement made by the Government in October 2023, together with the introduction of a transitional framework for individuals who were already in a relocation process when the end of the regime was announced.
As a rule, individuals who become Portuguese tax residents from 2025 onwards can no longer benefit from the NHR regime and must instead assess alternative frameworks, such as the Tax Incentive for Scientific Research and Innovation (TISRI / IFICI / “NHR 2.0”).
Importantly, although access to the regime is now restricted, the NHR regime itself remains in force and will continue to be applied in practice until 2033, taking into account its individual 10-year benefit period.
Who could still access NHR under the transitional regime?
Access to NHR under the transitional regime is limited to individuals who became Portuguese tax residents no later than 31 December 2024 and who can demonstrate that, in 2023, they were nor resident at least in the 5 previous years and that they were already engaged in a relocation process to Portugal.
For these purposes, the law considers that a relocation process existed where, by the relevant cut-off dates, the individual:
entered into an employment contract, promise of employment or secondment agreement to be performed in Portugal;
entered into a lease or other agreement granting use or possession of property in Portugal;
entered into a reservation or promissory agreement for the acquisition of rights over Portuguese real estate;
enrolled or registered dependent children in an educational establishment in Portugal;
held a valid residence visa or residence permit; or
had initiated, with the competent authorities, a residence visa or permit application procedure.
Membership of the household of a taxpayer meeting one of the conditions above may also be relevant.
Taxpayers covered by the transitional regime were required to submit their NHR registration request to the Portuguese Tax Authority by 31 March 2025.
I became tax resident before 2024 but never applied for NHR. Is it still possible to apply?
Yes, potentially.
According to consistent arbitration and court case law, registration under the NHR regime has a merely declaratory nature. In practice, this means that the substantive right to be taxed under the regime arises from meeting the legal requirements (tax residence and non-residence in the previous five years), and not from the act of registration itself.
As a result, taxpayers who became Portuguese tax residents before 2024 and met the conditions for NHR, but failed to register within the statutory deadline, may still seek to have the regime applied, typically through administrative challenge or litigation.
Whether this route is advisable depends on a cost-benefit assessment, taking into account the amounts at stake, the years concerned and the taxpayer’s overall situation.
How long does the regime apply?
Where applicable, the NHR regime applies for 10 consecutive years, counted from the year in which Portuguese tax residence is first acquired.
If a taxpayer ceases to be tax resident in Portugal in a given year, that year still counts towards the 10-year period. However, the regime may be resumed upon return, for the remaining years, provided tax residence is re-established.
How is NHR applied in practice?
The regime is implemented on an annual basis through the filing of the personal income tax return (IRS), submitted between April and June of the year following that to which the income relates.
Each year, taxpayers may assess whether it is more advantageous to apply the special NHR rules or the general IRS regime to specific categories of income, without losing NHR status for future years.
Why this matters
Although the NHR regime is no longer available to new entrants, it continues to have practical relevance in 2026 for a limited but significant group of taxpayers.
In particular, individuals who relocated to Portugal in 2023 or 2024, or who became tax resident earlier but never registered under NHR, may still have planning opportunities or litigation paths worth assessing.
In addition, taxpayers currently benefiting from the NHR regime should already be assessing how they will be taxed once their 10-year benefit period expires. The transition from NHR to the general IRS regime can result in a material increase in effective tax rates, particularly for individuals with foreign-source income, pensions or investment income. Early planning allows for timely restructuring and avoids abrupt tax exposure at the end of the regime.
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This insight is provided for general information purposes only and does not constitute legal or tax advice. It is not intended to be an exhaustive statement of the law and shuold not be relied upon as a substitute for advice tailored to individual circumstances.
Enquiries may be directed to info@flegal.pt or via the Contacts section here.