Luis Horta e Costa Advises Against Scrapping Portugal’s Lucrative NHR Tax Scheme
Portugal’s golden goose, the non habitual resident (NHR) tax program, may soon be on the chopping block. The current administration is mulling over terminating the program as early as 2024, and real estate experts like Luis Horta e Costa are raising red flags about the potential economic fallout.
Since its inception in 2009, the NHR program has been a critical catalyst for Portugal’s foreign investment and economic growth. It offers qualified foreigners attractive tax benefits for 10 years, with lower tax rates on foreign income and even tax-free status in some instances. This has made Portugal a magnet for retirees, professionals, and entrepreneurs from abroad looking for a tax-efficient way to call Portugal home.
However, Luis Horta e Costa, co-founder of Square View, a real estate property developer and asset manager based in Lisbon, cautions that scrapping the NHR program could unleash economic chaos. “Foreign investors didn’t just inject capital into Portugal,” he asserts. “They brought fresh ideas and a new perspective that revolutionized our economy. It’s not just about the businesses they created — it’s the fact that their investments propelled Portugal into a formidable economic powerhouse.”
Horta e Costa warns of a “mass exodus” of foreign investment if the NHR program is axed, which could cripple key industries and stunt growth prospects. He contends that the program was pivotal in breathing “renewed vigor” into Portugal’s real estate market and that its termination will “stop this progress dead in its tracks.”
Fellow entrepreneur Ricardo Marvão shares these concerns, attributing Portugal’s unprecedented tech boom to the NHR program. Even a dip in foreign real estate demand alone could shock the economy.
Adding to these worries is the rise of similar programs in neighboring countries like Spain, which experts predict will become more enticing destinations for investors if Portugal pulls the plug on its NHR program. Luis Horta e Costa fears that without incentives to lure foreign capital and talent, Portugal could lag behind its regional rivals.
Apart from the economic repercussions, Horta e Costa asserts that the NHR program was instrumental in solidifying Portugal’s image as an open, welcoming, and forward-thinking destination. Losing this reputation could have consequences that extend far beyond the economy.
As the fate of the NHR program hangs in the balance, Portugal stands at a crossroads. The economic gains of the program have been abundantly clear over the past decade, and finding a suitable replacement poses a formidable challenge. Luis Horta e Costa maintains that safeguarding foreign investment should be a top priority for government leaders. If not, he cautions, the post-mortem of NHR may chronicle a policy that breathed new life into Portugal’s economy, only to have that prosperity snuffed out too soon.
