Portugal 2025-2029 tax plan: what is proposed vs enacted
In short
The IRS rate cuts in Portugal’s 2025-2029 government programme are law for 2025 and 2026, in the income-tax rate table; later cuts remain proposals. The 2027 State Budget proposal, submitted to Parliament on 8 October 2026, changes the law only once it is approved and published. No law has reopened NHR, which the 2024 State Budget law closed to new entrants from 1 January 2024, and IFICI remains the regime for eligible new residents.
What Portugal’s 2025-2029 tax plan proposes vs enacts
Portugal’s government published a programme for 2025-2029 that includes tax-related policy signals.
Headlines suggesting "NHR is coming back" oversimplify what is a political programme, not a legislative act.
What the 2025-29 government plan actually says
Among its main measures, the programme commits to cutting IRS by €2,000 million over the parliamentary term, €500 million of it in 2025, especially for the middle class, and to reviewing and rationalising tax benefits. It also speaks of retaining talent and attracting investment, but it does not mention NHR or IFICI.
Is Portugal bringing back NHR?
No: not in its original form, and not through this programme alone.
The programme speaks of retaining talent and attracting investment, but it proposes no specific regime. Any change to IFICI, a new incentive regime or a change to the existing rules depends on future legislation.
What the plan signals about IFICI
IFICI succeeded NHR as the main tax incentive for new residents engaged in qualifying activities. The government programme does not mention IFICI, so it neither revokes nor replaces it.
Broader tax policy signals
Beyond NHR and IFICI, the programme touches on several areas relevant to expats and cross-border taxpayers:
- IRS rates. Under this programme, the income-tax rate table has been changed three times: by the law of 22 July 2025, by the State Budget for 2026 (law of 30 December 2025) and by the decree-law of 4 November 2026, which cuts the rates of the first six bands by 0.3 to 0.5 points for 2026 income, under the authorisation Parliament approved on 9 October and published on 22 October. Any further change needs a new law.
- Social security. References to contribution framework review, which could affect self-employed and business owners.
- Investment incentives. Broader language about attracting foreign direct investment and entrepreneurship.
- Real estate taxation. The housing tax package in the decree-law of 20 May 2026 is now law. It includes a 10% IRS rate on residential rents within the moderate-rent limit, relief for capital gains reinvested in moderate-rent housing, 6% VAT on eligible construction and renovation work and a 7.5% IMT rate on homes bought by non-residents. Each measure has its own conditions and time limits.
Until a measure is published in the Diário da República, nothing changes your filing position.
What this means for your tax planning
- Plan under current law.
- The State Budget for 2026 (published 30 December 2025, in force from 1 January 2026) has since been enacted. It did not reintroduce NHR or restructure IFICI: IFICI remains the active framework for new arrivals, and NHR remains closed to new applicants apart from the NHR transitional cases. Continue monitoring future budgets, since the government’s stated multi-year plan could still resurface in a later one.
Comparison: NHR vs IFICI
| Feature | NHR (repealed for new entrants) | IFICI (current) |
|---|---|---|
| Eligibility | New residents, five years of non-residence | Activity-dependent, entity validation |
| Income scope | Foreign and Portuguese qualifying income | Qualifying category A and B activity income, plus foreign-source A, B, E, F and G income exempt with progression |
| Duration | 10 years | 10 years |
| Tax rate | Former NHR: 20% on specified Portuguese Category A or B income, with category, source, treaty, and anti-abuse conditions for foreign-income relief | IFICI: 20% on eligible Portuguese Category A or B activity income |
| Status | Closed to new entrants from 1 January 2024, except the NHR transitional cases | Active for eligible taxpayers |
Frequently asked questions
Is NHR coming back in 2026?
The former NHR regime was revoked from 1 January 2024, subject to statutory transitional rules. IFICI is the current incentive under the tax-benefits rules for qualifying research and innovation activities. Government programmes and announcements are not law.
Should I wait to move to Portugal until a better incentive is available?
That is a personal decision, but from a tax planning perspective, delaying based on speculative future benefits is usually not productive.
Does the government plan affect my existing NHR or IFICI status?
A government programme does not itself change the law. NHR or IFICI treatment depends on the legislation applicable to the tax year, transitional provisions and continuing eligibility. Registration does not freeze every future tax rule.
When will we know if anything actually changes?
The most likely vehicle for concrete changes is the annual State Budget. The Government submitted the 2027 State Budget proposal to Parliament on 8 October 2026, and the final vote is scheduled for 24 November 2026. Its measures remain proposals until the budget law is approved and published in the Diário da República.
Related guides
- Guide
IFICI: register by 15 January 2027
IFICI was created by the 2024 State Budget law, the same law that closed NHR to new entrants. - Guide
IRS 2025 in Portugal: correct a return or file late
Filing Portugal IRS for 2025 income in 2026: Modelo 3, Anexo J and what to check when the normal deadline has passed or a return needs correcting. - Guide
Portugal tax calendar 2026: every deadline
Next dates: IFICI registration by 15 January 2027 for those becoming tax residents in 2026. The IRS return for 2026 income is filed from 1 April to 30 June 2027.
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