For years, Portugal's Non-Habitual Resident (NHR) tax regime was a primary draw for foreign property buyers in Lisbon. Its closure to new applicants in 2024 marked the end of an era, leaving many potential investors and expats confused about the new fiscal landscape. The introduction of the 'Tax Incentive for Scientific Research and Innovation' (IFICI), often called NHR 2.0, has created a critical knowledge gap. This guide provides a clear NHR vs IFICI Lisbon, Portugal comparison for foreign buyers, explaining how the changes impact property acquisition and ownership in Lisbon and the surrounding areas of Cascais, Oeiras, and Sintra.

Quick Answer

The old NHR regime is closed to new applicants. Its replacement, IFICI, offers similar tax benefits but is restricted to a narrow group of highly qualified professionals. For most new foreign buyers in 2025, neither regime will apply, and they will be subject to standard Portuguese taxation.

Key Facts

• The original NHR program officially ended for new applicants on March 31, 2024.
• Existing NHR holders will keep their benefits for their full 10-year term.
• The new IFICI regime is designed for a specific list of high-value professions, not general retirees or investors.
• To qualify for IFICI, you must not have been a tax resident in Portugal for the previous five years.
• Standard property taxes like IMI (annual tax) and AIMI (wealth tax) apply to both NHR and IFICI residents.
• Rental income from Portuguese property is generally taxed at a flat 28% rate under both schemes.
• Consulting property tax accountants is now more critical than ever before purchasing.

Detailed Explanation

Who is Eligible? The Great Divide

The most significant difference between the old NHR and the new IFICI regime is eligibility. The NHR was famously broad, available to almost any new resident with foreign pension, dividend, or royalty income. The IFICI tax regime in Lisbon is, by contrast, highly selective. It is designed to attract top-tier talent. According to the Portuguese Government, applicants must be engaged in specific activities, including roles in higher education, scientific research, technology and innovation startups, or other recognized high-value fields. This means that for a typical foreign family or retiree looking to buy a home in Cascais, the IFICI is likely out of reach.

Taxation of Property-Related Income

For those who do qualify for IFICI, the tax treatment of property-related income is similar in some ways to the old NHR. When it comes to rental income from a property in Portugal, the default tax is a flat 28% rate. However, a key benefit of IFICI, as reported by sources like PwC Portugal, is the exemption on most foreign-sourced income. This is a major advantage for individuals with a global investment portfolio. For capital gains on the sale of a Portuguese property, the rules remain largely the same: 50% of the gain is added to your income and taxed at progressive rates, unless you qualify for the primary residence reinvestment exemption. This is a crucial point to discuss with due diligence lawyers.

Standard Property Taxes: No Escape

It's a common misconception that special tax regimes eliminate all property-related taxes. This is incorrect. Whether you are a grandfathered NHR holder or a new IFICI resident, you are still liable for the standard taxes associated with property ownership in Portugal. These include:

• IMT (Property Transfer Tax): Paid upon purchase. Rates are progressive, and you can estimate the cost with our IMT Tax Calculator.
• IMI (Annual Municipal Property Tax): An annual tax based on the property's registered value. Rates vary by municipality but are generally 0.3% to 0.45%.
• AIMI (Additional IMI or 'Wealth Tax'): Applies to the total value of your Portuguese property holdings over €600,000.

These taxes are a fundamental part of the financial planning for any property purchase in Lisbon.

Common Questions

Do I still qualify for NHR if I moved in 2024?
If you became a tax resident in 2023 and registered for NHR by the March 31, 2024 deadline, you are covered. If you moved in 2024 without meeting specific transitional rule requirements, you likely missed the window.

How do I know if my profession qualifies for IFICI?
The government maintains a specific list of qualifying activities and entities. You must have your credentials and job role formally assessed. This is a process where English-speaking lawyers are indispensable.

Is it still worth buying property in Lisbon without NHR?
Absolutely. While the NHR was a significant perk, the fundamental drivers of the Lisbon real estate market—quality of life, safety, climate, and strong rental demand—remain unchanged. The tax landscape is simply different and requires more careful planning.

What This Means for Buyers

The end of the NHR era requires a mindset shift for foreign buyers. The focus moves from broad tax incentives to strategic financial planning. Here are our recommendations:

• If you are a highly qualified professional: Immediately investigate your eligibility for IFICI with a specialized tax advisor. This could be a game-changer for your financial planning.
• If you are a retiree or passive investor: Do not assume you qualify for any special regime. Your financial planning should be based on Portugal's standard tax rules for residents or non-residents.
• For all buyers: The role of professional advice is now paramount. Before making an offer on a property in Príncipe Real or Sintra, you must have a clear picture of your total tax liability.

Related Professionals in Lisbon

Navigating the NHR vs IFICI Lisbon, Portugal landscape is impossible without expert guidance. The professionals in our directory are essential:

• Real Estate Lawyers: They handle the legal aspects of your property purchase and can provide initial guidance on tax residency. For urgent questions about tax implications during a transaction, they are your first call.
• Accountants: These are the specialists who will analyze your specific financial situation, determine your eligibility for IFICI, and structure your tax affairs for maximum efficiency. English-speaking accountants are crucial for clear communication.

Update Log

October 10, 2025: Updated information on IFICI eligibility criteria based on the latest clarifications from the Portuguese Tax Authority.
June 2, 2025: Added details on how standard property taxes (IMI, AIMI) apply to IFICI residents.