Existing NHR Tax Holders Fail to Act Early Enough to Mitigate Impending Tax Hike

A newly published report warns that affluent expats in Portugal holding Non-Habitual Residency (NHR) tax status may be putting their financial future at risk by failing to seek early professional advice.

The Wealthy Expats in Portugal Survey Report 2025, which gathered insights from more than 1,000 affluent international residents, found that most NHR tax status beneficiaries had not taken adequate steps within the first 1 to 7 years of their tax benefit period to shield themselves from future progressive tax rates, which can climb from 28% up to 48%.

Portugal Pathways expressed concern at the findings. “It was surprising to learn how many NHR-status families were unaware of the financial advantages of planning early,” Steve Philp, Director at Portugal Pathways, said.

“There are solutions available—if they’re acted on in good time. Delaying this could mean missing the chance of significant savings in future tax. Failure to act early will impact your income and assets, as well as potentially lifestyle in Portugal.”

Portugal Pathways has assisted numerous wealthy expats who were already 8 or 9 years into their NHR period.

Philp added: “While it was still possible to connect them with qualified tax and wealth advisors, the delay made it significantly harder to avoid the looming hike in 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 for another ten years.”

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, this can leave them vulnerable, particularly when the 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 advisor.

“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 than to scramble once it ends.”

The Wealthy Expats in Portugal Survey Report 2025 estimates that up to 71% of expats currently benefiting from NHR status may face steep increases in tax bills once the programme ends for them, with some seeing their rate rise as high as 48%.

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 advisors and wealth managers. As a result, we’ve put ourselves in a position where our tax liability should remain exceptionally low for the foreseeable future – around 5 to 6 per cent annually.”

“Looking back, I’m so glad we didn’t leave it too late. It’s easy to get caught up in the lifestyle here, overlook the long-term financial picture and forget to plan for the end of the NHR tax status.”

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.