Portugal’s 2025 Budget: What Foreign Residents Need to Know

Published on 14th November, 2025

What were the Key Highlights of the 2025 Portuguese State Budget (Orçamento do Estado) for Individuals?

Interviewer: Welcome. Could you start by outlining the main takeaways from the 2025 Portuguese Budget that individuals, both Portuguese nationals and foreign residents, should be aware of?

Tax Advisor: Certainly. The 2025 Budget, like any, aims to balance economic growth with fiscal responsibility. For individuals, the key areas of focus typically include adjustments to Personal Income Tax (IRS), Property Taxes (IMI and AIMI), Value Added Tax (VAT), and potentially Social Security contributions. For 2025, we might have seen, for example, slight adjustments to the IRS income brackets to account for inflation, perhaps some targeted incentives for energy efficiency in homes affecting IMI, or minor changes to VAT on specific goods and services. It’s always a mixed bag, with some measures offering relief and others potentially increasing the tax burden in certain areas. The specifics would be detailed in the final budget law published in the Diário da República.

How Does the 2025 Budget Affect Foreign Residents Specifically?

Interviewer: That gives us a good overview. Now, focusing on foreign residents, were there any measures in the 2025 Budget that particularly target or disproportionately affect them?

Tax Advisor: This is a very important question. Historically, Portugal has offered specific regimes for foreign residents, most notably the Non-Habitual Resident (NHR) scheme. As we know, the NHR regime was significantly altered, and the ability for new individuals to apply for the traditional NHR status effectively ended in 2024.Therefore, the 2025 Budget wouldn't introduce new NHR applications in its old form.

However, the budget could have implications for those already under an existing NHR status (grandfathered individuals), ensuring their benefits continue as per the terms of their approval, or it might clarify aspects of the new, more limited, tax incentive for specific professions (e.g., scientific research and teaching) that replaced the broader NHR. For foreign residents who are standard taxpayers in Portugal, the general changes to IRS, IMI, and other taxes would apply to them just as they do to Portuguese nationals. The budget might also include measures related to the taxation of foreign-sourced income for standard residents or updates to Double Taxation Agreements, which are always pertinent for expats. Any new residency-linked incentives would also be detailed, though the trend has been away from broad tax-based residency schemes like the original NHR.

Were There Any Changes to Wealth Taxes or Capital Gains Taxes?

Interviewer: What about taxes on assets, such as wealth taxes or capital gains taxes? Any significant shifts in the 2025 Budget?

Tax Advisor: Portugal’s Adicional ao IMI (AIMI), often referred to as a form of wealth tax on higher-value properties, is an area to watch in any budget. The 2025 Budget could have adjusted the thresholds or rates for AIMI, or the types of properties subject to it. Regarding Capital Gains Tax (CGT), the rules for taxing gains on the sale of property or other assets are usually stable but can see tweaks. For example, there might be changes to reinvestment relief rules for main homes or adjustments to how inflation is accounted for when calculating gains on assets held for many years. Foreign residents, particularly property owners or investors, need to be very aware of these aspects. For instance, the CGT treatment of gains from selling a primary residence can differ if the proceeds are reinvested in another primary residence within the EU/EEA, and any changes here would be significant.

What About Incentives or Support Measures Relevant to Foreigners?

Interviewer: Beyond direct taxation, did the 2025 Budget introduce or continue any incentives or support measures that might be particularly relevant to foreign investors, entrepreneurs, or specific demographics of foreign residents?

Tax Advisor: The Portuguese government often includes measures to attract investment and talent. While the Golden Visa programme no longer offers pathways through direct real estate investment, the 2025 Budget could have reinforced or modified other investment visa categories, such as those linked to investment funds, job creation, or cultural heritage projects. There might also be specific incentives for startups, tech companies, or businesses relocating to interior regions of Portugal, which could be attractive to foreign entrepreneurs. Support for digital nomads, perhaps through clarifications or enhancements to existing visa schemes, could also feature, given Portugal’s popularity with this group. Any new tax credits for research and development or for hiring specific categories of workers would also be relevant for foreign business owners in Portugal.

Where Can Foreign Residents Find Reliable Information and Advice on the Budget?

Interviewer: This is all very complex. For foreign residents wanting to understand the precise implications of the 2025 Budget for their personal situation, where should they turn for reliable information and advice?

Tax Advisor: Absolutely, navigating tax law, especially in a foreign country and after a new budget, requires expert guidance. The primary official source is the Portal das Finanças (the Portuguese Tax Authority's website), where the budget law and related circulars are published – though these are, of course, in Portuguese and highly technical.

Therefore, the most practical and reliable approach is to consult with a certified accountant (Contabilista Certificado) or a tax lawyer in Portugal who is experienced in advising foreign residents. They can interpret the budget in the context of your specific circumstances, income sources, and residency status. Reputable real estate agencies like PortugalProperty.com can often connect their clients with trusted, English-speaking financial and legal advisors who can provide this tailored guidance. It’s an investment that can save significant confusion and potential tax liabilities down the line.

For assistance with your property journey in Portugal and connections to professional services, visit www.PortugalProperty.com

Published in: Business / Guide to Portugal / Miscellaneous / Portuguese Life