We are having this conversation more and more often with our clients.

They moved to Portugal many years ago, registered for NHR and, suddenly, their 10 years are almost over.

And the question is usually quite simple:

What happens now? Is it still worth staying in Portugal?

There is no standard answer.

When NHR ends, you do not lose your Portuguese tax residency. If you continue living in Portugal, you generally become subject to the ordinary Portuguese tax rules that apply to tax residents.

For some people, the difference will not be dramatic. For others, it can be very significant.

That is why, in our experience, the first step is not to start looking for another country. It is to calculate what actually changes.

Start with the income you already have

Most of our clients approaching the end of NHR are not starting from zero.

They may have pensions or Social Security benefits, dividends, investment accounts, rental properties or a company abroad.

During NHR, some of this income may have benefited from special tax treatment.

Once NHR ends, we need to look at everything again.

Pensions are usually one of the first areas we review.

Some clients have been paying 10% on foreign pensions. Others entered NHR under the older rules and may have had different treatment.

When NHR ends, that special treatment ends as well.

The same applies to the 20% NHR rate for qualifying professional income.

Investment income also needs to be reviewed. Dividends, interest and capital gains may be taxed differently once the NHR rules no longer apply, depending on the type and source of income.

What should you review before NHR ends?

During your final NHR year, it makes sense to look at your main sources of income and how they may be treated afterwards.

Depending on your situation, this may include:

• Pensions and Social Security benefits
• Dividends and interest
• Investment portfolios
• Capital gains
• Rental income
• Foreign companies or business structures
• Expected pension withdrawals
• Planned investments or disposals
• U.S. tax implications, if applicable

The point is not that you necessarily need to change any of these things.

The point is to understand what happens if you do nothing.

The real question is how much more tax you will pay

This is where we think people sometimes make the mistake of reading too much online.

Portuguese tax rates are easy to find online.

But those rates do not tell you what your tax bill will be.

We have clients where the difference after NHR may be relatively small.

We also work with clients with substantial pensions and investment income where the difference can be much more significant.

Those are completely different situations.

If your tax increases by €3,000 or €5,000 a year, that may not change your decision to live in Portugal.

If the increase is €30,000 or €40,000 every year, then you will probably want to understand whether there are alternatives.

But first, you need the numbers.

For U.S. Citizens, It Can Be More Complicated

A large part of our work is with U.S. citizens living in Portugal.

With these clients, we also need to consider what continues to happen in the U.S.

Someone may have Social Security, a 401(k), IRA accounts, investments, rental property or a U.S. company.

So we cannot look only at Portuguese tax.

We need to understand how Portuguese tax interacts with U.S. tax, the U.S.–Portugal tax treaty and foreign tax credit mechanisms.

Depending on the income and the applicable rules, Portuguese tax may affect the amount of U.S. tax ultimately payable.

Sometimes the overall increase in tax is smaller than expected.

Sometimes it is not.

Again, the answer depends on the individual situation.

Should you leave Portugal?

This is not a question we can answer for you.

We can explain the tax consequences and help you understand the financial impact. The personal decision is yours.

After almost 10 years, many people have built their life here.

They own a home. Their friends are here. Their family may be here. They like Portugal and do not particularly want to move again just because a tax regime has ended.

So we believe the sensible approach is to put a number on it:

What does staying in Portugal actually cost after NHR?

Once you know that number, you can decide whether the additional tax is acceptable or whether you want to consider other options.

Don’t Wait Until NHR Has Already Finished

This is probably the most important advice we give our clients.

If your NHR finishes at the end of 2026, for example, do not wait until you prepare your 2027 tax return in 2028 to understand the consequences.

By then, some decisions may already be too late.

During your final NHR year, it makes sense to review your main sources of income, expected pension withdrawals, investments, possible capital gains and any foreign companies or business structures.

This does not mean that everyone needs to change something.

Quite often, after doing the analysis, the conclusion may simply be that there is nothing special to do.

But at least you know what is coming.

That is the kind of work we are increasingly doing with our clients.

Not trying to find another “NHR”.

Just looking at the situation before and after the regime ends and answering a practical question:

If I Stay in Portugal, What Changes for Me?

For some people, the additional tax will be manageable and staying in Portugal will still make perfect sense. For others, the difference may be large enough to justify looking at other options.

The important thing is to make that decision based on your own numbers — before NHR ends, not after.

That is where PortugalTaxes.pt can help: we assess the real impact of the end of NHR and help you understand what makes sense for your situation.

This article is general information only. Tax treatment after NHR depends on each taxpayer’s income, circumstances and the applicable Portuguese and international tax rules.

Disclaimer:
This website is for informational purposes only and does not constitute legal, tax, or financial advice. Individual circumstances vary, and we recommend consulting a qualified professional before making any tax-related decisions. PortugalTaxes.pt is not affiliated with the IRS, Portuguese Tax Authority, or Portal das Finanças. PortugalTaxes.pt is not affiliated with the IRS or Portuguese Tax Authority.