Portuguese State Budget 2025 Conference

Name: Portuguese State Budget 2025 Conference
Start: 2024-10-23 00:00
End: 2024-10-23 14:13
Location: Lisbon, Portugal

Lisbon, PortugalOctober 23, 2024

Event

Location

Lisbon, Portugal

On October 23rd, 2024, Célia Castilho, head of Immigrant Invest’s office in Portugal, attended the Portuguese State Budget 2025 Conference: Fiscal Proposals — Analysis by RFF Lawyers.

On October 10th, the Portuguese Government presented the 2025 Budget Law. Discussions and votes on the Law will take place in late October and November, with implementation anticipated for January 1st, 2025.

The conference offered insights into how the 2025 state budget may impact various sectors, including immigration.

Immigrant Invest representative at the conference

Célia Castilho

Head of the Portuguese office

Conditions and changes in the immigration sector

The 2025 Budget Law does not introduce new measures in the immigration sector, but rather continues the previous year’s policy. However, experts suggest that additional changes may be proposed next year.

The minimum monthly wage is expected to rise by €50, reaching €870. This change will directly affect the immigration sector by increasing income and savings requirements for the D7 and Digital Nomad Visas.

Golden Visa conditions. In 2024, the real estate investment option was removed, with investments redirecting to areas such as investment funds and support for culture and scientific research.

Additionally, earlier this year, the government announced its intention to create a new category of a Golden Visa. If introduced, a new option will require investments in equipment and projects to support vulnerable immigrants and affordable housing. The new Budget Law does not mention a new option, though.

The non-habitual residency, or NHR. Transformed in 2024, the NHR regime now grants a 20% flat tax rate on Portugal-sourced income to a limited number of foreigners in select professions, including higher education teaching, scientific research, and other highly qualified roles.

The D7 Passive Income Visa. Previously allowing holders getting employed in Portugal to apply for the NHR regime, the D7 Visa may decline in popularity. Experts predict that some may choose other countries, such as Italy, Spain, or Greece, which offer similar living conditions but with more attractive tax incentives.

Expected changes in other areas

According to the State Budget Report 2024 and Summary of Macroeconomic Projections for the Portuguese Economy, the Government expects growth in GDP, investment, exports, and imports, alongside a decrease in unemployment, inflation rates, and the budget deficit.

IRS Jovem regime. This special tax regime allows young tax residents to enjoy 25% to 100% tax exemption on income from employment, professional, or business activities. The regime also extends to foreigners moving to the country.

The new law expands eligibility to all tax residents up to 35 for the first 10 years of their career, regardless of educational level. Previously, eligibility required certain educational qualifications and applied only to those up to 26 for the first 5 years of employment after graduation.

Income tax brackets are proposed to increase by 4.6% to address inflation. For example, the lowest tax rate of 13% is currently applied to an annual income of up to €7,703. If the Law is approved, the bracket will be increased to up to €8,059.

Corporate income taxrates may see a 1% reduction, lowering the general tax rate to 20% and the reduced rate to 16%.