How NHR tax holders can plan early to potentially mitgate future tax burden

A newly published report warns that affluent expats in Portugal holding Non-Habitual Residency (NHR) tax status may face progressive rates once their NHR tax status ends if they fail to plan and restructure their finances early on in their 10-year NHR tax period.

The Wealthy Expats in Portugal Survey Report 2025, which gathered insights from more than 1,000 affluent international residents, found that most current NHR tax status holders have not taken adequate steps within the first 1 to 7 years of their NHR tax period to potentially shield themselves from future progressive tax rates once their 10 year NHR tax status comes to an end. Those who fail to plan early on within their NHR tax status can face progressive tax rates of up to 48% post-NHR.

Portugal Pathways expressed concern at the findings. “It was surprising to see how many NHR-status families were unaware of the potential tax considerations they may face once their NHR status comes to an end, particularly where little planning has taken place earlier in the NHR period,” said Steve Philp, Director at Portugal Pathways.

“While outcomes vary by individual circumstances, early engagement with qualified cross-border professionals — ideally during the earlier years of NHR — allows families to better understand their post-NHR position, assess available planning considerations, and avoid unnecessary uncertainty as they transition into the standard tax framework.”

Portugal Pathways has even assisted numerous wealthy expats who were already 8 or 9 years into their NHR period to best mitigate future progressive tax rates once their NHR status comes to an end after 10 years.

Philp added: “While it was still possible to connect them with qualified tax and wealth advisors, the delay made it harder to mitigate future tax obligations once NHR tax status expires after ten years. This can’t be enacted at the last minute; it has to be carefully planned so that you are optimised for low tax once your NHR tax status of 10 years comes to a close.”

Although Portugal continues to attract international families with its favourable lifestyle, low cost of living, rich culture, strong healthcare system, and high levels of safety, many newcomers postpone serious financial planning.

According to the Wealthy Expats in Portugal Survey Report 2025, failing to take action in years 1 to 7 of NHR tax status can leave them vulnerable to progressive tax rates of up to 48% once their 10-year NHR period ends.

Daniel Simons, a Lisbon resident, reflected on his own experience: “We’d been living in Portugal for five years, having moved from the UK, happily enjoying the lifestyle and NHR’s tax reliefs. However, we only recently sought professional help from a cross-border wealth manager and tax adviser to restructure our finances, ready for once our NHR tax period ended after 10 years, and avoid the progressive tax rates that would come with it.

“Thankfully, we acted just in time to put a strategy in place. Had we waited another year, remaining in Portugal might not have been financially viable for us.”

His advice to fellow expats is straightforward: “Speak to a wealth manager early on. You’ll be far better placed to continue enjoying life in Portugal with long-term peace of mind.”

Niall Macdonald, a Portugal-based wealth manager, acknowledged the reluctance many feel about addressing tax matters. “It’s completely understandable—most people want to enjoy their new life abroad rather than deal with taxes. But acting early is essential. It’s far easier to plan while still under NHR tax regime protection and early on in your status than to scramble once your NHR low tax period ends.”

Rachel Whitmore, a professional living in Porto, shares her experience:“We were fortunate to receive early guidance through Portugal Pathways, which introduced us to cross-border tax advisers and wealth managers. That early engagement helped us better understand our long-term position and assess appropriate planning considerations well before the end of our NHR period.”

“Looking back, I’m glad we didn’t leave things until the later years. Taking action earlier in our NHR period gave us clarity and confidence about the transition ahead, rather than uncertainty about how the standard tax framework might apply once NHR comes to an end.”

To help address this, Portugal Pathways offers a complimentary discovery call to NHR holders seeking guidance. This initial conversation can lead to introductions with vetted tax and wealth management experts who understand the unique needs of international residents.

With the right regulated financial planning in place, affluent expats can continue to enjoy the benefits of life in Portugal while safeguarding their assets and income against future tax shocks.

Contact Portugal Pathways today to schedule a discovery call and get clarity, confidence, and the proper guidance so you can continue enjoying life in Portugal.

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Disclaimer: Information on the Portugal Pathways website and in email communications is for general information only and does not constitute legal, tax, financial, or investment advice. Tax treatment, investment outcomes, and residency requirements depend on individual circumstances and applicable law and are not guaranteed. Professional independent advice should always be obtained before taking action.