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Residency Norms And Taxes In Portugal Published on 24 Feb, 2014 by /

Residency Norms And Taxes In Portugal

Many European Union nationals have shown interest in acquiring residence permits to stay in Portugal for various reasons. Information contained in the following paragraphs should hopefully provide substantial clarification to questions they may have with regard to residence permits in Portugal.

Considering that you belong to a European Union nation, how long do you think you can continue to reside in Portugal without executing any documentation?

If you are a European Union native, you are permitted to stay in Portugal for a duration of three months unconditionally without any formal documentation. However, it is mandatory that you carry your passport or an authorized identity card. The same applies to all those family members who are accompanying or joining you.

Are there any terms and conditions for issuing permanent residency certificate (certificado de residência permanente)?

You will need to ask for this document in an office of the Foreigners and Borders Service before your residency certificate expires. However, obtaining an appointment prior to visiting the office is necessary.

Define Residence Permit.

A Residence Permit – which is an Authorization of Residence – is a document given to a foreign national who has been permitted to stay in Portuguese territory. There are two types of Residence Permits:

a) Temporary residence permit - This permit expires after a period of one year from the date of issue. It may then be renewed for two years and then renewed once in every two years.

b) Permanent residence permit - This does not come with an expiry date, but has to be renewed every five years, or if any changes happen with regard to identification elements registered at the time of applying for the permit.

How does one become a Portuguese national?

If you want to become a Portuguese national, you have to fill in a number of forms instituted by the present legislation. You may refer to this link for more information in this regard: (http://www.irn.mj.pt/IRN/sections/irn/a_registral/registos-centrais/docs-da-nacionalidade/aquisicao/n/aquisicao-nac-art6n1/)

If you need some more details in the matter, please feel free to get in touch with the Institute of Registration and Notary Affairs (IRN).

About Taxes

How do you define a building?

A building – as per municipal tax code on real estate or landed property – may be defined as a part of territory, comprised of a gardened region, water, structures of any kind contained within that part bearing features of permanence, all these forming a part of one single person’s or a group of persons’ estate, and carries financial value under normal circumstances.

Gardened region, water and structures are viewed as buildings as they form a part of the asset owned by a person or legal entity, on the condition that they are financially independent from the land on which they are situated even if they exist on a part of the landed property forming an integral part of different assets, or if they do not bear the features of an asset.

As per Municipal Property Tax, every independent part of a landed property owned by an entity is said to form a building.

When you want to buy a property, what do you need to declare as a taxpayer?

As taxpayer and a law-abiding citizen, when you buy a property or a part of it, you are obligated to declare your acquisition within the next 60 days to any financial department so that they may update their records at their end.

How do you prove or establish that a certain property is your permanent residence?

To be eligible for this benefit as a taxpayer, you must declare your tax domicile in the records (item 9 of article 46 of the EBF [tax incentives statute]). Then the property in question will be deemed to be your/your family’s permanent residence.

As an individual, your usual place of residence declared by you as the taxpayer will be treated as your tax domicile, unless you state otherwise. As a taxpayer, you are obligated to declare your tax domicile. Unless you give a notification about change of domicile, your tax domicile will not change at the tax administration office.

Do you offer any exemptions/concessions for buildings extended, constructed, renovated or purchased/acquired for a consideration by immigrants?

Certainly we do. Buildings extended, constructed, renovated or purchased/acquired for further consideration by immigrants, under the provisions of the article 3 of Decree Law no. 323/95, of 29 November are eligible for exemption from the IMI that is Municipal Property Tax. However, the conditions set for properties defined as permanent residences have to be met by the immigrants, unless the last date for allocating the designated properties for the intended purpose has expired (permanent residences of the immigrants or their family members).

Do you offer any exemption for properties that constitute a part of developments that are meant for tourism purposes?

Yes. Buildings that constitute a part of developments meant for tourism are offered exemption from the municipal property tax for seven years from the date they are designated to be used for tourism purposes.

Structures or buildings that constituted part of a tourism development and were earlier designated for tourism purposes are eligible for tax waivers for a duration of seven years from the designated date if the assigned deadline is met for opening or reopening of the tourism development to the general public, or for completing the work related to this development.

Structures in the town areas that function as guest houses are eligible to be waived from IMI (Municipal Property Tax) for a duration of seven years, calculated from the date of completion of the related works.