Portugal NHR Tax Regime in 2026: What Replaced It and Who Still Qualifies

The short answer, as of May 2026: Portugal's Non-Habitual Resident regime (NHR) has been closed to new applicants since 1 January 2024. A narrow grandfathering window extended into 2024 and 2025 for people who had already started moving in 2023. The replacement program is IFICI (Incentivo Fiscal à Investigação Científica e Inovação), introduced by Article 236 of Lei do Orçamento do Estado 2024 (Law 82/2023) and operationalised by Portaria 352/2024 in December 2024. IFICI offers the same headline 20% flat rate on Portuguese-source income for ten years, but the qualifying activities are far narrower than NHR ever was.

This guide is the definitive 2026 walkthrough of what NHR was, what changed in 2024, who can still register under NHR through transitional rules, what IFICI actually covers, how foreign income is treated, a worked example for a US software engineer relocating in 2026, and the registration steps that decide whether you get the regime or pay full progressive IRS rates instead. Last updated 17 May 2026.

Table of contents

• What NHR was: the 2009 to 2023 regime
• The 2024 change: how Portugal closed NHR
• Grandfathering: who can still register under NHR in 2026
• IFICI: the replacement regime in detail
• IFICI eligibility test and comparison table
• Foreign income under IFICI: pensions, dividends, royalties, interest
• Worked example: US software engineer moving in 2026
• D7 and D8 visas paired with IFICI
• Step-by-step registration on Portal das Finanças
• Five common mistakes that cost the regime
• FAQ
• Sources

What NHR was: the 2009 to 2023 regime

Portugal introduced the Regime do Residente Não Habitual in 2009, codified in Decreto-Lei 249/2009. The intent was to attract skilled professionals, retirees, and high-net-worth individuals to a country recovering from the 2008 financial crisis. For roughly fifteen years it became one of the most generous personal tax regimes inside the European Union.

The mechanics, for the entire 2009 to 2023 period of new registrations, were these:

• Ten-year duration. NHR status applied for ten consecutive years from the year of tax residency, non-renewable.
• Five-year non-resident requirement. To register, you could not have been a Portuguese tax resident in any of the five years preceding the application.
• 20% flat IRS rate on Portuguese-source professional income earned from listed "high-value-added activities" (HVAA), as set out in Portaria 12/2010 and updated by Portaria 230/2019. The HVAA list covered architects, engineers, doctors, university professors, software developers, scientific researchers, senior executives, and similar roles, identified by codes from the Portuguese Classificação Portuguesa das Profissões.
• Foreign-source employment and self-employment income was exempt in Portugal if it could be taxed in the source country under a double tax treaty, even if that country chose not to tax it. This was the "may be taxed" interpretation that made NHR famous.
• Foreign pensions were fully exempt from Portuguese tax for entrants between 2009 and 31 March 2020. From 1 April 2020, Lei 2/2020 introduced a flat 10% rate on foreign pension income for new NHR registrants, which applied through to the regime's closure.
• Foreign dividends, interest, royalties, capital gains, and rental income were generally exempt in Portugal under the same "may be taxed at source" logic, subject to the relevant tax treaty and the country not being on Portugal's blacklist of tax havens.

The political pressure that ended NHR built through 2022 and 2023. Portuguese housing affordability collapsed in Lisbon and Porto, the government attributed part of the pressure to wealth inflows from NHR registrants and Golden Visa investors, and the regime became a recurring talking point in budget negotiations. By October 2023, then-Prime Minister António Costa publicly described NHR as "a fiscal injustice that no longer makes sense", and the 2024 budget proposal carried the closure.

The 2024 change: how Portugal closed NHR

Lei 82/2023 of 29 December 2023, the State Budget Law for 2024, revoked the NHR regime through its Article 236. The closure was effective from 1 January 2024. From that date, new applications under Article 16(8) to (12) of the CIRS (Código do IRS), which is the legal basis of NHR, were no longer accepted by the Autoridade Tributária e Aduaneira (AT).

Two cohorts retained access:

1. People who became Portuguese tax residents in 2023 or earlier kept their full ten-year NHR period intact. A person who registered in 2020 still runs to the end of 2029.
2. People who had taken concrete preparatory steps before 31 December 2023 were given a transitional path to register as NHR during 2024, and in some cases into 2025, provided they could prove the preparatory commitment.

That second group is what most international advisers refer to as "NHR grandfathering". The exact qualifying acts are set out in Article 236(2) and (3) of Lei 82/2023.

Grandfathering: who can still register under NHR in 2026

The grandfathering window has, by May 2026, largely closed. The headline cohorts that remained eligible to register under the old NHR after 1 January 2024 were:

• People with a residence visa or residence permit valid on 31 December 2023, including D7 and D8 holders, even if they had not yet moved.
• People with a residence visa application submitted to AIMA (or formerly SEF) before 31 December 2023, regardless of approval date.
• People with an employment contract or services agreement signed before 31 December 2023, where duties were to be performed in Portuguese territory.
• People with a property lease or promissory purchase contract signed before 10 October 2023 (the date the 2024 budget proposal was tabled) for use as their habitual residence in Portugal.
• People who had enrolled dependants in Portuguese schools or educational establishments before 10 October 2023.

These applicants had until 31 March 2025 to register as Portuguese tax residents and elect NHR for tax year 2024. A narrower extension ran into 2025 for those who could prove the qualifying act was completed in 2023 but residency was established later. By 2026, AT is not accepting fresh NHR elections except for people who established tax residency on or before 31 December 2024 and who can produce one of the qualifying documents above.

If you are reading this in 2026 and were not already in the Portuguese system, NHR is not on the table. IFICI is the regime to study.

IFICI: the replacement regime in detail

IFICI was created by Article 236 of Lei 82/2023, the same law that closed NHR. The detailed list of eligible activities and certification procedures was published in Portaria 352/2024 of 23 December 2024, which finally made the regime fully operational. AT opened IFICI registrations on Portal das Finanças in early 2025.

The full Portuguese name is Incentivo Fiscal à Investigação Científica e Inovação. In English, "Tax Incentive for Scientific Research and Innovation". It is sometimes called "NHR 2.0" by international press, which is misleading. IFICI is a narrower regime, designed to attract a specific profile of taxpayer.

The headline mechanics of IFICI:

• Ten-year duration from the year of registration, non-renewable, identical to NHR's clock.
• 20% flat IRS rate on Portuguese-source employment income (Category A) and self-employment income (Category B) that derives from a qualifying activity. The rate matches the NHR HVAA rate.
• Exemption on most foreign-source income, including employment, self-employment, dividends, interest, royalties, rental income, and capital gains, subject to the country not being a blacklisted jurisdiction and to the activity being one covered by IFICI.
• Foreign pensions are not exempt under IFICI. They are taxed at progressive IRS rates, the same as for any ordinary Portuguese tax resident. This is the single biggest break from NHR.

The qualifying activities, defined in Portaria 352/2024, fall into six categories:

1. Higher education teaching and scientific research, including roles in entities integrated in the national science and technology system.
2. Qualified employment within the scope of contractual tax benefits for investment (RFAI and similar productive-investment schemes under Decreto-Lei 162/2014).
3. Research and development jobs, where personnel costs qualify for the SIFIDE (Sistema de Incentivos Fiscais à Investigação e Desenvolvimento Empresarial) tax credit.
4. Qualified employment and senior management in companies certified as relevant to the national economy by the AICEP (Agência para o Investimento e Comércio Externo de Portugal), where the company is engaged in productive investment in industrial or services projects with strategic relevance.
5. Highly qualified professions in companies that obtained the status of "industrial company" or that benefit from productive investment incentives, with a list of qualifying occupations.
6. Research, development, and innovation jobs in entities certified by the ANI (Agência Nacional de Inovação) or operating under recognised innovation hubs, including startup status under Lei 21/2023.

The crucial structural difference from NHR: IFICI is employer-anchored. Under NHR, you could self-classify by your CIRS profession code and unilaterally apply the 20% rate to qualifying income. Under IFICI, the company that employs you (or contracts your services) must be on a certified list maintained by AT, AICEP, ANI, FCT (Fundação para a Ciência e Tecnologia), or IAPMEI, depending on the activity. The list of certifying bodies and the registration flow is set out in Article 5 of Portaria 352/2024.

If your Portuguese employer is not certified or fails to maintain certification, you do not qualify, no matter how qualified you personally are.

IFICI eligibility test and comparison table

Three conditions must all be true for an IFICI application to succeed:

1. Five-year non-resident rule. You cannot have been a Portuguese tax resident in any of the five calendar years before the year of your IFICI election. This mirrors NHR.
2. Qualifying activity. Your Portuguese-source professional income must come from one of the six categories above, performed for a certified entity.
3. Tax residency in Portugal. You must become a Portuguese tax resident in the year of election. Tax residency is acquired by either spending more than 183 days (continuous or not) in Portugal in a 12-month period, or by having a habitual residence in Portugal on 31 December of the relevant year with an intention to maintain it. Article 16 of the CIRS is the legal basis.

The table below sets out, side by side, how NHR (closed), IFICI (open), and ordinary IRS progressive rates compare on the categories that matter most to new residents in 2026.

Foreign income under IFICI: pensions, dividends, royalties, interest

The general logic for foreign-source passive income under IFICI tracks NHR closely, with the one major exception of pensions. Article 81 of the CIRS, as modified by the IFICI rules, applies the exemption method where the income could be taxed in the source country under an applicable double tax treaty, and where the source country is not on the blacklist contained in Portaria 150/2004 (a list that includes jurisdictions such as the Cayman Islands, the British Virgin Islands, Gibraltar, and others).

In practical terms for a new resident in 2026:

• US dividends and interest paid to a Portuguese tax resident under IFICI are exempt in Portugal. The US-Portugal tax treaty of 1994 allows the source state to tax them, which satisfies the "may be taxed" test, and the US is not blacklisted.
• UK rental income from a property left behind in London is exempt in Portugal under IFICI. The UK-Portugal treaty of 1968 allocates taxing rights to the situs state.
• German private pension received from a former employer pension fund. Under NHR this was taxed at 10% in Portugal from April 2020. Under IFICI it is taxed at full progressive IRS rates, which can reach 48% on the marginal slab over €83,696 in 2026.
• US Social Security. Under the US-Portugal treaty, government and social security payments are typically taxed only in the paying state. Under IFICI a Portuguese tax resident still receiving US Social Security would normally see no Portuguese tax on it, because the treaty allocates taxing rights exclusively to the US, which preempts the IFICI pension treatment. This is a treaty-driven outcome, not an IFICI exemption. Get advice on your specific case.

This is the rule that hurts retirees most. A British or German retiree planning to live off a private pension and move to Portugal in 2026 will pay ordinary Portuguese IRS on that pension. For many, the effective tax rate is materially higher than what NHR would have delivered, and may be higher than what they would pay in their home country.

Worked example: US software engineer moving in 2026

Take a 50-year-old American software engineer, single, no dependants, moving to Lisbon in March 2026. She holds a D8 digital nomad visa and accepts an offer from a Portuguese company that is certified under SIFIDE for research and development tax credits. Her arrangement:

• Employment income from the Portuguese certified employer: €120,000 gross per year.
• Continued contractor income from a US client, paid into a US LLC, that flows to her as Category B self-employment income reported in Portugal: $80,000, roughly €74,000 at the May 2026 EUR/USD rate of 1.08.
• US brokerage dividends and interest: $12,000 per year, roughly €11,100.
• No foreign pension, no rental property.

She elects IFICI in February 2027 for tax year 2026, within the 31 March 2027 deadline (more on that in the registration section below).

Portuguese-source income (€120,000 from the SIFIDE-certified employer): falls under IFICI category 3 (R&D personnel for SIFIDE), so the 20% flat rate applies. Portuguese IRS on this income is €120,000 × 20% = €24,000. Plus social security at 11% employee share, €13,200, plus solidarity surcharge does not apply at this band.

US contractor income (€74,000): Category B, but the work is performed for a US client and may be argued as foreign-source professional income. If she structures and documents the work so that it is genuinely performed for a foreign employer with foreign duties, IFICI exemption can apply under the same logic as NHR foreign employment income, provided the US has taxing rights under the treaty (it does, as the country of source for the LLC). She must take advice here. A defensive position assumes the worst: 20% IFICI flat on €74,000 = €14,800. The aggressive but defensible position is full exemption.

US dividends and interest (€11,100): exempt under IFICI per the table above. Zero Portuguese tax.

Total Portuguese tax under IFICI, conservative case: €24,000 + €14,800 = €38,800 on €205,100 of worldwide income, an effective rate of 18.9% (excluding social security).

For comparison, ordinary progressive IRS in 2026 on the same situation: Portuguese-source €120,000 would attract roughly €43,800 of progressive IRS (calculated against the 2026 IRS brackets that top at 48% over €83,696). US contractor income, if taxable in Portugal, adds another €27,000 to €35,000 of progressive IRS. US dividends and interest at 28% flat add €3,108. Worldwide Portuguese tax under ordinary IRS easily exceeds €70,000, with foreign tax credits then chipping back some US withholding. Effective rate above 35%.

The IFICI saving in this scenario, in round numbers, is in the region of €30,000 to €40,000 per year, sustained over up to ten years. The actual number depends entirely on whether the Portuguese employer holds and maintains the right certification, and on documentation of foreign-source income.

D7 and D8 visas paired with IFICI

Residency visas and tax regimes are separate questions and they interlock. The D7 (passive income visa, typically used by retirees with pension or investment income above the Portuguese minimum wage threshold) and the D8 (digital nomad visa, for remote workers earning at least four times the Portuguese minimum wage from foreign clients) are the two main legal entry routes for non-EU citizens who plan to live in Portugal full time.

The interaction with IFICI:

• D7 plus IFICI is structurally awkward. D7 holders typically live off foreign pensions, dividends, or rental income. IFICI does not exempt foreign pensions, and the dividend or rental exemption was already available under ordinary IRS rules for many treaty countries. For most pure D7 retirees, IFICI does not deliver meaningful savings, and the qualifying-activity test is hard to meet because they are not employed by a Portuguese certified entity. The honest answer for most D7 retirees in 2026: there is no preferential regime, and the move needs to be justified on cost of living, climate, healthcare, and treaty positions rather than tax incentives.
• D8 plus IFICI can fit, but only if the D8 holder's professional activity is performed for a certified Portuguese entity rather than a foreign client. The classic D8 profile (working remotely for a US tech company) does not qualify on the Portuguese-source side, because the income is foreign-source. IFICI's flat 20% rate has nothing to apply to. Foreign-source exemption may still help under treaty.
• The cleanest IFICI fit is a person who arrives on a work visa or EU passport, takes employment with a Portuguese certified employer, and retains foreign passive income on the side. That is the profile IFICI was designed for.

For the Golden Visa route, the picture is different again. See our Portugal Golden Visa 2025 complete guide for how investor residency interacts with tax residency. Note that Golden Visa holders are not required to become Portuguese tax residents, and many maintain non-resident status to keep their existing tax regime elsewhere.

Step-by-step registration on Portal das Finanças

IFICI is not granted automatically. You must elect it and supply supporting documentation. The procedure, as standardised by AT in 2025, runs as follows.

1. Establish Portuguese tax residency. Either accumulate more than 183 days of presence in a 12-month period, or have a habitual residence in Portugal on 31 December of the relevant year. Update your address with AT through Portal das Finanças within 60 days of changing residence (Article 19 of the LGT, Lei Geral Tributária).
2. Confirm employer certification. Ask your Portuguese employer for written confirmation of the IFICI category they fall under and the certifying body (AT, AICEP, ANI, FCT, or IAPMEI). For SIFIDE-eligible R&D, the company's most recent SIFIDE approval. For AICEP-certified employment, the certification reference.
3. Gather documentation of prior non-residence. Tax residence certificates from the country or countries where you were resident in the five preceding years, issued by the relevant foreign tax authority.
4. Submit the IFICI election on Portal das Finanças. The election is made on the AT portal under the "Residente Não Habitual / IFICI" menu, by submitting a request that names the qualifying activity, the certified employer, and uploading supporting documents.
5. Meet the registration deadline. The deadline to elect IFICI for a given tax year is 31 March of the year following arrival. If you became a Portuguese tax resident in 2026, your IFICI election must be filed by 31 March 2027. Late elections are not accepted, with very narrow exceptions.
6. File the annual IRS return (Modelo 3) in 2027 claiming the IFICI rate on the qualifying income, using Annex L. AT will then validate the regime against employer and activity records.

If you are still acquiring the NIF that is required even to start this process, our Portugal NIF guide covers the foreigner-specific path. The mortgage side of the move, where IFICI status can affect bank assessments of net income, is covered in the Portugal mortgage rates 2025 complete guide. For the wider property hunt see the Portugal property buyer guide.

Five common mistakes that cost the regime

1. Applying for NHR after 1 January 2024 without a grandfathering act. Specialists still see this. The applicant is told by a non-specialist accountant that NHR is "still open for a transition", they submit the election, AT rejects, and they end up on ordinary IRS for the year. By 2026 the grandfathering window is essentially closed.
2. Mis-classifying a job as IFICI-qualifying. The activity must be performed for a certified entity, not merely match an old NHR HVAA code. A senior software engineer at a Portuguese startup that is not certified by ANI, AICEP, or any other listed body, does not qualify. Confirm certification in writing before signing.
3. Missing the five-year non-resident rule. People who spent a year in Portugal during the pandemic, even without formally registering as tax residents, can have an exposure if they crossed the 183-day threshold. Pull a full timeline before electing.
4. Double tax treaty oversight on foreign income. The exemption logic depends on treaty allocations. If the source country has no treaty with Portugal (or is blacklisted), foreign income is taxable in Portugal at ordinary rates. This catches people with income from offshore companies in the Caribbean.
5. Late registration past 31 March of the following year. The deadline is firm. AT publishes the rule on Portal das Finanças and reiterates it in IRS guidance each year. Missing it means you pay ordinary IRS on the first year of residency, with no retrospective fix.

FAQ

Is NHR still available in Portugal in 2026?

No. NHR was closed to new applicants on 1 January 2024 by Lei 82/2023. People who became Portuguese tax residents in 2023 or earlier retain their NHR status for the remainder of their ten-year period. A narrow grandfathering window for those who had concrete preparatory commitments before 31 December 2023 ran into 2024 and 2025, and by May 2026 is no longer practically open for new elections.

What replaced NHR after 2024?

IFICI, the Incentivo Fiscal à Investigação Científica e Inovação, created by Article 236 of Lei 82/2023 and operationalised by Portaria 352/2024 of 23 December 2024. It offers a 20% flat IRS rate on Portuguese-source qualifying income for ten years, plus exemption on most foreign-source income, but does not exempt foreign pensions.

What is IFICI and who qualifies?

IFICI is Portugal's special tax regime for new residents who work in scientific research, higher education, qualified R&D roles, or in companies certified as strategic by AICEP, ANI, IAPMEI, or FCT. To qualify you must not have been a Portuguese tax resident in any of the five preceding years, you must become a Portuguese tax resident in the year of election, and your professional income must come from a certified entity in one of the six listed activity categories of Portaria 352/2024.

Can I still register under NHR through grandfathering?

In May 2026 the grandfathering route is essentially closed for new elections. Applicants who became tax residents in 2024 with a qualifying prior commitment (visa application before 31 December 2023, employment contract or lease signed in 2023, dependants enrolled in Portuguese schools before 10 October 2023) had until 31 March 2025 to file. AT is no longer accepting fresh NHR elections in 2026 except in narrow disputed cases.

What is the tax rate under IFICI?

20% flat IRS on Portuguese-source employment and self-employment income from a qualifying activity. Foreign-source employment, self-employment, dividends, interest, royalties, rental income, and capital gains are generally exempt in Portugal where the source country has taxing rights under a treaty and is not on the Portaria 150/2004 blacklist. Foreign pensions are taxed at ordinary progressive IRS rates of 14.5% to 48%.

Are foreign pensions tax-free in Portugal in 2026?

No. Under IFICI foreign pensions are taxed at ordinary progressive Portuguese IRS rates. This is the most significant break from the old NHR regime, where foreign pensions were 0% from 2009 to March 2020 and 10% from April 2020 to closure. Specific treaty rules (for example US Social Security paid to a US citizen resident in Portugal) can still allocate exclusive taxing rights to the source country, so individual cases vary.

When do I need to register for IFICI?

The election must be filed on Portal das Finanças by 31 March of the year following the year in which you became a Portuguese tax resident. For someone arriving in 2026, the IFICI election deadline is 31 March 2027. Late elections are not accepted as a matter of routine.

Can I combine D7 visa with IFICI?

Technically yes, in that D7 residency and IFICI tax status are separate legal frameworks, but most D7 holders do not benefit. D7 income profiles tend to be foreign pensions (not exempt under IFICI) and foreign passive income (already protected by treaties under ordinary IRS for many countries). The IFICI flat 20% rate has little to apply to for a pure D7 retiree. The fit is much stronger for D8 or work-visa holders who take employment with a Portuguese certified entity.

Sources

• Lei 82/2023, State Budget Law 2024, Article 236 (closure of NHR and creation of IFICI), Diário da República
• Portaria 352/2024 of 23 December 2024, IFICI qualifying activities and certification, Diário da República
• Código do IRS, Article 16 (tax residency), Portal das Finanças, AT
• Residente Não Habitual regime page, AT
• Agência Nacional de Inovação (ANI) certification information
• IAPMEI, certifying body for industrial and productive investment
• AICEP Portugal Global, investment promotion and strategic-investor certification
• Fundação para a Ciência e Tecnologia (FCT)
• Portaria 150/2004, blacklist of privileged tax jurisdictions, Diário da República
• OECD Taxing Wages, Portugal country profile
• European Commission, Personal Taxation in the EU
• US-Portugal Income Tax Treaty (1994), IRS