71% of Existing NHR Tax Holders Unprepared for Portugal’s 48% Tax Rates, Report Warns

Expats benefiting from Portugal’s NHR tax regime must take proactive steps to secure their financial future before it’s too late, with many unaware of the necessity to restructure their foreign income and assets.

If existing NHR tax holders fail to do this in the first 1–7 years of their tax status, they risk transitioning into Portugal’s progressive tax system, where rates can reach as high as 48%.

Experts warn that waiting until the final years of NHR tax status to take action can lead to significant tax burdens that could have been avoided.

“Many NHR tax status holders underestimate just how steep the tax jump can be if they fail to seek advice early on in their NHR tax life,” said Steve Philp, Director at Portugal Pathways, an organisation supporting affluent families with relocating, estate and tax planning, cross-border wealth management, property investment, international schools, business setup, and private healthcare in Portugal.

“As an NHR tax holder, you’re faced with two options: act early within 1 to 7 years of your NHR tax status with the right advice to enjoy peace of mind, or delay and get caught out with high taxes on day 1 of year 11.

“Even in years 8 to 10, if you act as early as possible, you can still take steps to protect yourself long-term.”

A stark example of an NHR tax holder who failed to plan early and mitigate progressive tax rates involves a British couple hit with a huge six-figure tax bill after allowing their NHR tax status to lapse without restructuring their income.

And they’re not alone. According to the latest Wealthy Expats in Portugal Survey Report, 71% of NHR tax holders are unaware of their potential tax exposure post-NHR tax status without early financial planning.

Many believe the NHR tax benefits will somehow extend, or they’ll “deal with it later”, leaving it too late to avoid the tax burden.

A spokesperson for the Wealthy Expats in Portugal Survey Report said: “We interviewed over a thousand people, and it was clear to see that people are blissfully unaware of the future impact and are prioritising enjoying themselves over securing and planning for their future.”

However, UK expat Eileen Brennan was able to protect herself from future tax shocks for when her NHR tax status ends by restructuring non-Portuguese income streams, pensions, and international assets in years 1 to 7 through the support of Portugal Pathways.

“I didn’t realise my income and pension could be taxed up to 48% once NHR ended. Portugal Pathways helped me restructure quickly, but I wish I’d done it sooner. The delay cost me more than I expected.”

Portugal Pathways offers free, no-obligation discovery calls to help NHR holders assess their situation and understand the most effective structuring options before engaging a cross-border tax specialist.

“Don’t let the comfort of the current regime fool you into inaction,” added Philp. “The cost of waiting is high, but the solution is simple if you act early.”

NHR tax holders: the message is clear — act now, or risk paying more later.

Existing NHR tax holders, book your free, no-obligation discovery call with a Portugal Pathways expert advisor and take action to mitigate future progressive tax rates here.

About Portugal Pathways

Portugal Pathways has supported hundreds of Golden Visa residency-by-investment applications and provides expert guidance through its professional supply chain network on luxury property, wealth management, and tax optimisation, including post-NHR tax regime planning, as well as private healthcare, IFICI tax incentive applications, money transfers and bespoke relocation solutions to enhance life and investments in Portugal.