After successful careers and wise investments, they moved to the beautiful town of Lagos in Portugal. They lived comfortably there for five years under the D7 visa and the Non-Habitual Residency (NHR) tax regime. Thanks to the NHR program, they enjoyed the 0% tax on their overseas pension and other assets held outside of Portugal.

High-angle view of white and blue fishing boats in a turquoise marina with a town behind
Aerial view of Lagos Harbour in Portugal

However, like many approved under the NHR tax regime in Portugal, they had yet to plan for the long term and were unaware that after 10 years, they would face progressive tax rates of 28% to 48% if they failed to take action. They were unprepared for the end of the exemption period, which could drastically change their tax status.