If You Were Thinking About Moving To Portugal, It Just Got A Whole Lot More Expensive

Portugal has long ranked high on the list for Americans looking to move abroad because of its affordability.

With its golden visa, favorable tax incentives for foreigners, and low housing costs, it became a major destination for global movers during the pandemic. But come 2024, it will be significantly more expensive to live there if you're coming from another country.

"We already have clients that are looking to reconsider their plans" to move, Alex Ingrim, a private wealth manager at Chase Buchanan, told Insider.

António Costa, the prime minister of Portugal, announced that the country is scrapping its non-habitual resident tax regime (NHR), a popular tool used by foreigners to cut down on expenses. Now those moving to Portugal in 2024 and beyond will have to pay the same amount of income tax as everyone else, Le Monde reported.

NHR was introduced in 2009, after the Global Financial Crisis, to attract foreign talent and wealth to the country. Currently foreigners who are accepted into the program had income taxed at a flat rate of 20%, while retirees had pension taxes at 10%, according to Portugal.com.

"It made Portugal a really attractive jurisdiction to work or to retire," Ingrim said. Foreigners "were also tax exempt on capital gains on property transactions abroad or rental income that was generated abroad, so it had all of these different advantages to it."

Now, "I think it's caused a lot of people to reconsider why they were moving to Portugal if it's not going to be as easy as they first thought," Ingrim said.

Close to 10,000 Americans were living in Portugal in 2022, according to data from the Portuguese government, as reported by The New York Times — an increase of 239% since 2017. As foreign wealth moved into the country, the cost of living skyrocketed. Now, trying to walk back the success of the programs the country put in place to stoke the economy, it's changing one of the biggest points of attraction: the savings.

Those advantages will be wiped away for new foreign residents in 2024. For Portuguese residents, taxes range from 14.5% to 48% depending on what you earn — the highest band is for earners bringing in 75,010 euros (or $79,647) a year or more, according to investment migration firm Global Citizen Solutions.

"You can see that there's a huge difference between having a 10% flat tax on a social security account or potentially paying something like 35%, 45%, 48% on your income in retirement," Ingrim said.

Americans already living in Portugal, like Dan Bagby and his wife, Michelle, who moved to Lisbon from Texas in 2021, won't be immediately affected.

Once accepted, NHR's perks last for 10 years. Bagby is working on Portuguese citizenship and told Insider that once his status changes, his taxes still won't until 2031.

"In the short term, it really doesn't change anything for me," Bagby told Insider. "We've got about seven more years left. I'm not really worried about it right now."

The sudden arrival of Americans and other foreigners pushed the country's real-estate market to new highs. House prices increased 157% from 2020 to 2021, according to Eurostat, the European Union's statistics agency. And rents rose 112% from 2015 to 2021, the Associated Press reported.

In February the country announced an end to its popular "golden visa" program, which allowed investors to obtain residency permits in exchange for purchasing residential real estate worth at least 500,000 euros.

Ending NHR is anticipated to help correct the housing market by making foreign buyers pay their fair share in taxes. But with the cost of living going up and reaching levels of parity with other countries, foreigners may not move to Portugal at all.

"It's causing people to take a step back and go, 'Okay, Portugal was the easy answer and now there's no other easy answer out there. France, Italy or Spain might be back on the table,'" Ingrim said.

Source: https://www.businessinsider.com/author/jordan-pandy

Leave America: How To Get A Second Passport (For Free) And Live Abroad

Maybe it’s the 2020 presidential election right around the corner. Maybe it’s the surging coronavirus pandemic. Or maybe people are just feeling antsy for change. Whatever the case, Americans are not only dreaming about moving out of the United States, they’re actually leaving America for good. According to the Association of Americans Resident Overseas, Americans are fleeing at a higher rate than the U.S. is actually growing.

Affordable, warm, and a lot of fun, just two years in Peru could bag you a second passport. ©Steve LePoidevin/International Living. One of the easiest ways to leave America and live in another country is to get a second passport. Sure, you can pay big bucks to secure one (we’re talking $100,000 and up). But according to a new report from International Living, it’s possible to source a second passport quickly without buying a passport or inheriting one. “Second passports and residence in other countries have long appealed to Americans interested in greater flexibility in their travels and investments,” says Jeff D. Opdyke, editor of The Savvy Retiree, a publication of International Living. “These days, that interest is rising—sharply—with more people seeking an ‘escape plan’ should the U.S. no longer suit them in the years to come, whether that be for political, economic or social reasons.” According to Opdyke—a U.S. expat who’s lived in Prague now for nearly two years—it’s possible to gain citizenship-by-naturalization in two to four years in plenty of places around the world. (And guess what? It’s legal for Americans to hold dual citizenship.) The way to do it: “Move somewhere and gain citizenship—and a passport—via the naturalization process,” says Opdyke.

Does it sound too good (and easy) to be true? Opdyke says that it’s not as difficult as you might think. “While lots of countries require that you live within their borders for a decade or longer before you can apply for citizenship, several impose a much-shorter timeline,” he says. Tempted by the countries that are offering new digital nomad work visas? Opdyke says that it’s not as ideal. “Barbados and its new Welcome Visa allows remote workers to live and work on the island for a year. That’s great—but the price is $2,000 to $3,000 for the visa, depending on whether you’re going alone or with family,” he says. “Conversely, you could use a professional visa service in a place like Argentina or Czech Republic or Spain or Portugal (pretty much anywhere) and obtain a one-year, temporary residence visa and the price will be well under $1,000.” Another drawback to a remote working visa: You’re one and done. “Your year is up and you’re out of there,” says Opdyke. “With the others, you can renew your visa, usually for a two-year stint, and it will cost you nothing (or a minimal amount).” According to Opdyke, there are a number of countries where you can obtain citizenship-by-naturalization in five years. This includes (but isn’t limited to) places like Australia, Belize, Chile, Colombia, Czech Republic, Finland, France, Ireland, Jamaica, Latvia, Mexico, Netherlands, New Zealand, Panama, Singapore, Sweden, Taiwan, Thailand, Turkey, United Kingdom and Uruguay. But if you don’t want to wait and have the process take that long, there are a handful of countries where it will take four years or less. Some of these countries are still closed to Americans due to Covid-19, but as soon as the travel restrictions lift, you can be ready to bolt. Here are seven places to consider.

Argentina Argentina is huge—second in size only to Brazil in South America, with a range of climates and geography, from subtropical jungle to arctic conditions in the south. You’ll find it all: modern cities, quaint villages. Another big part of the appeal? “If one’s life is denominated in dollars, their lifestyle in the land of tango will be pretty sweet,” says Opdyke. In just two years, you can apply for citizenship in Argentina and get a passport there, which gives you access to 170 countries without needing a visa. Argentina also allows U.S citizens to hold dual nationality.

Peru Peru is best known for Machu Picchu. But it’s also home to modern cities and colonial towns, pretty beaches and quiet farming areas. Plus, it’s very affordable. According to Opdyke, once you’ve been a resident for two years in Peru, a non-Peruvian can apply for citizenship. “That’s not hard,” says Opdyke. “With the correct documents folks can apply for Peruvian residence while visiting on a tourist visa. But it could take several months to complete the residence process.” Another requirement is that applicants need to be able to communicate in Spanish and must pass an exam about Peru’s history, culture and geography.

Ecuador Ecuador has been called the Land of Eternal Spring—and not only is the weather great in this country that’s about the same size as Colorado, you can live on a lot less. Plus, there are a number of options for locations, from beaches to cities, university towns to mountain villages. Citizenship is possible to achieve in just three years. “Ecuador demands three continuous years, and if there is an interruption of more than 90 days, folks have to start over,” says Opdyke.

Honduras Honduras is only two hours from the United States by air, but it’s far away in spirit—a place where life is much simpler. You can get citizenship in three years in Honduras, but there’s also a loophole: The requirement is shortened to two years if you are from a Spanish or Portuguese-speaking country.

Poland It takes just three years to get citizenship-by-naturalization in Poland and a big part of the appeal is that Poland is a European Union member, which means “this is the quickest path to an EU passport,” says Opdyke. Applicants here need to have proof of a stable source of income, such as Social Security income or a pension. Though there is one challenging requirement: You need to be able to speak Polish.

Paraguay Opdyke says that Paraguay is another good choice and only takes three years to obtain citizenship-by-naturalization. The application process is straightforward: “Live there for three years as an upstanding citizen,” says Opdyke.

Brazil From welcoming locals to year-round warm weather, Brazil has its appeals. And after four years of living in Brazil, speaking Portuguese and having no criminal record, you can live there permanently. “Very much like Paraguay in how easy it is,” says Opdyke. Source: https://www.forbes.com/sites/laurabegleybloom/2020/10/29/leave-america-how-to-get-a-second-passport-for-free-and-live-abroad/