Your NHR status is ending: should you sell, stay or let your Portuguese home?

When exactly does NHR end?

NHR (residente não habitual, the non-habitual resident regime) gave you the right to be taxed as an NHR for 10 consecutive years, counted from the year you became tax resident in Portugal, inclusive (article 16(9) of the IRS Code, now repealed but preserved for existing beneficiaries by article 236 of Lei 82/2023). The tax authority’s own leaflet calls the period improrrogável: it cannot be extended.

Two details catch people out:

• The clock starts in the year you became resident, not the year you applied. Many people moved in one year and registered by 31 March of the next. The period still starts in the year of arrival.
• Years spent outside Portugal still use up the 10. If you leave, the status is suspended; you can use it again only in the years remaining, and only if you are resident again.

Year you became resident	Last NHR tax year	First year at normal rates	First return without NHR filed
2016	2025	2026	April–June 2027
2017	2026	2027	April–June 2028
2018	2027	2028	April–June 2029
2019	2028	2029	April–June 2030

This is not a small group. Registered NHR beneficiaries rose from 20,483 in 2017 to 41,229 in 2019, so tens of thousands of people reach the end of their period between now and 2029.

NHR is closed to newcomers. The last transitional registrations, for people who became resident by 31 December 2024 and met the preparatory conditions, had to be made by 31 March of the year after they arrived. You cannot restart NHR by leaving and coming back.

Were you on the pension exemption or the 10% rate?

It depends on when you became resident, not simply when you registered.

Your position	Foreign pension tax under NHR
Resident by 31 March 2020, NHR for 2020 or earlier	Exempt in Portugal under the old exemption method, unless you opted for 10% (transitional rule of Lei 2/2020, article 329)
Became resident after 31 March 2020	Flat 10% (article 72(12) of the IRS Code, introduced by Lei 2/2020 from 1 April 2020)

Most people who arrived in 2016–2019 are therefore on the exemption. For them the jump when NHR ends is from zero to full progressive tax.

NHR never covered the gain on your Portuguese home. That is Portuguese-source income and has always been taxed under the normal capital gains rules.

What happens to UK pensions once NHR ends?

Portugal taxes them at the progressive rates of article 68 of the IRS Code: 12.5% to 48% in 2026, plus a 2.5% solidarity surcharge on taxable income above €80,000.

The UK does not get the right back. Under the new UK–Portugal double tax convention, signed on 15 September 2025 and in force from 29 December 2025, article 17 says pensions paid to a resident of one country are taxable only in that country. The 1968 treaty it replaced covered only pensions “paid in consideration of past employment”. The new wording drops that limit, so it is generally read as covering the UK State Pension as well as private and workplace pensions. The convention applies to Portuguese taxes from 1 January 2026 and to UK income tax and capital gains tax from 6 April 2026.

The exception is government service pensions (article 18). For example, civil service or armed forces pensions stay taxable only in the UK if you are a UK national who is not also Portuguese. Lump sums and drawdown from a SIPP need case-by-case advice. The treaty does not label them, and Portugal decides how it classifies the payment.

Worked example: a £30,000 pension (about €35,000)

One pensioner, taxed alone, 2026 rates. The 2026 specific deduction for pension income is €4,587.09 (8.54 × the social support index of €537.13).

Step	Figure
Pension	€35,000.00
Less specific deduction	−€4,587.09
Taxable income	€30,412.91
12.5% on first €8,342	€1,042.75
15.7% on €8,342–€12,587 (€4,245)	€666.47
21.2% on €12,587–€17,838 (€5,251)	€1,113.21
24.1% on €17,838–€23,089 (€5,251)	€1,265.49
31.1% on €23,089–€29,397 (€6,308)	€1,961.79
34.9% on €29,397–€30,412.91 (€1,015.91)	€354.55
Tax before personal deductions	€6,404.26

Deductions for things like general household and health expenses reduce the bill a little. General household expenses alone are worth up to €250 per person.

Regime	Annual Portuguese tax on €35,000
NHR, exemption method (resident by March 2020)	€0
NHR, 10% rate	€3,500
After NHR, single pensioner	about €6,404
After NHR, married couple filing jointly, same €35,000 from one pension	about €4,529

Joint filing helps a couple because the rates apply to half the combined taxable income (the quociente conjugal, article 69). UK pensions paid gross under an NT code have no Portuguese tax taken at source. The whole bill arrives with the assessment after you file, and it is normally due by 31 August. Set the money aside monthly from your first non-NHR year.

The government proposed further rate cuts for 2026 income in September 2026. They are not yet law.

Is IFICI an option instead?

No, for almost all retirees. IFICI (the incentive for scientific research and innovation, sometimes called “NHR 2.0”) is for people taking qualifying research, academic or innovation jobs. It does not cover pensions. It also requires that you were not resident in Portugal in the previous five years, and it expressly excludes anyone who has benefited from NHR. A former NHR pensioner cannot use it.

Your three options compared

The figures below use one example: an Algarve home bought in 2017 for €300,000 and sold in 2026 for €520,000. Purchase taxes and fees were €20,000 (an assumption for illustration). The seller pays 5% agency commission plus VAT (€31,980) and €250 for the energy certificate. The seller also has a €35,000 pension.

Step	Figure
Sale price	€520,000
Less purchase price × 1.18 coefficient (2025 table, provisional)	−€354,000
Less purchase taxes and fees	−€20,000
Less commission and VAT, energy certificate	−€32,230
Gain	€113,770
Taxable half	€56,885

	Stay and pay	Move and sell before leaving	Move, then sell as a non-resident	Move and let
Pension tax in Portugal	~€6,404 a year	Stops once you leave	Stops once you leave	Stops once you leave
Portuguese tax on the sale	None (no sale)	€0 if the whole proceeds go into a new main home in Portugal or the EU/EEA; otherwise about €24,294	About €20,255 (estimate, below)	None until you sell
Main-home relief	Kept for a future sale	Yes, if reinvested in Portugal or EU/EEA	Usually lost (see next section)	Lost once it stops being your tax address
Home-country tax	None	None on the gain if sold while not resident there (watch UK temporary non-residence)	Home country may tax the gain, with credit for Portuguese tax	Home country taxes the rent, with credit
Ongoing costs	IMI, upkeep	None	IMI, upkeep until sold	IMI, upkeep, management; rent taxed at 25%, or 10% for long lets up to €2,300 a month (2026–2029)

Selling as a resident without reinvesting. The €56,885 is added to your €30,413 of taxable pension. That pushes part of the gain into the 43.1% and 44.6% bands, with €182 of solidarity surcharge. The extra tax is about €24,294.

Selling as a non-resident. Only 50% of the gain is taxed, and the rate is set by your worldwide income, which you must declare on the return (annex G). Using €35,000 of pension as worldwide income, the average rate on €91,885 is 35.6%, applied to €56,885, which gives about €20,255. This is an estimate. See our guide to capital gains tax for non-residents, and run your own figures in the selling calculator.

The non-resident bill can be slightly lower. But you then lose main-home relief, and if you are back in the UK or Ireland, that country taxes the gain too, with a credit for the Portuguese tax.

Can you still get main-home relief after you leave?

Article 10(5) of the IRS Code excludes the gain on your own permanent home if:

• the proceeds, less any mortgage repaid, are reinvested in another permanent home in Portugal or another EU/EEA state between 24 months before and 36 months after the sale
• you state the intention on that year’s return
• the home you sold was your tax address for the 12 months before the sale, or before the reinvestment if you bought the new home first

Partial reinvestment gives proportional relief.

That last condition decides it. Once you change your tax address abroad, a later sale usually fails the 12-month test. The one route that still works: buy your new EU/EEA home first, while the Portuguese home is still your tax address, then move and sell within 24 months of that purchase.

The UK is not in the EU or EEA. A home bought in England does not qualify. Ireland, Norway, Sweden, Denmark, Finland and the Netherlands do.

If you are not buying another home, the 2026 rent-reinvestment exemption (Decree-Law 97/2026) may help. It excludes the gain on a sale in 2026–2029 if you reinvest the proceeds in Portuguese homes let at up to €2,300 a month. The law sets no residence condition, but the tax authority has not confirmed that non-residents qualify. See the rent-reinvestment exemption.

Timing tips

1. Decide before your first non-NHR year ends. From that year, pension tax runs at full rates every month you stay.
2. Reinvesting in the EU/EEA? Sell or buy while still resident. Keep your Portuguese tax address until the new home is bought or the sale completes.
3. Returning to the UK? Main-home relief will not apply. Compare selling now against selling after you arrive. See moving back to the UK.
4. Portugal splits the year when you leave. You stop being resident from your last day in Portugal (article 16(4)). Record the date.
5. Appoint a fiscal representative or sign up to e-notifications before you change your address to a non-EU country.

What if you return to the UK?

UK residence is decided by the statutory residence test. The year you return may be split, so that only the part after arrival counts as UK-resident. Check this against HMRC’s RDR3 guidance.

Temporary non-residence. If you were UK resident in at least four of the seven tax years before you left, and you return within five years, gains made while abroad on assets you owned when you left can be taxed in the UK in the year you return. If you became resident in Portugal in 2016–2019, you have been away more than five years, so this normally does not apply.

Selling after you return. The UK taxes a UK resident’s worldwide gains at 18% or 24%, after a £3,000 annual exempt amount, and gives credit for Portuguese tax on the same gain. Private residence relief may cover the years the home was your only or main residence, plus the final nine months of ownership. The rules for overseas homes are detailed and depend on your facts. Take UK advice before relying on them. For the full UK picture, see UK residents selling.

Key points

• NHR runs for 10 consecutive years from the year you became resident, inclusive. It cannot be extended, and years abroad still count.
• Residents from 2016–2019 lose it for 2026–2029. Pensions then face 12.5% to 48%: about €6,400 a year on €35,000 for a single pensioner.
• Under the new UK–Portugal treaty, UK state and private pensions of Portuguese residents are taxable only in Portugal. Government service pensions stay in the UK.
• IFICI is not available to former NHR beneficiaries or to pension income.
• Main-home relief needs reinvestment in Portugal or the EU/EEA and the 12-month tax-address test. Sell, or buy the new home, before you move your tax address.
• Moving to the UK means no main-home relief. Compare the Portuguese and UK tax on selling before and after you leave.