THEEldorado for retirees it becomes a little less golden. Since 2009, around 27 retired Europeans have moved to Portugal to take advantage of a gigantic tax advantage granted by Lisbon: the possibility of collecting the gross pension, without any tax, for 10 years. Today, however, this regime, launched at the height of the financial crisis to attract money and investment, has come to an end.
With an amendment to the 2020 Budget law, the government of the socialist Antonio Costa introduced a levy of 10% (minimum payment of 7.500 euros) on all social security income of foreign "non-habitual residents".
Attention: for those who have already taken the big step towards Portugal, nothing changes, because the rules are not changed retroactively. A spokesman for the Costa government specified that the change will only apply to newcomers.
However, this is not enough to appease the wrath of real estate developers, who have been doing rich business thanks to foreign retirees since 2009: "Discouraging foreign investment is a crime against the nation," commented Luis Lima, president of the association of real estate brokers.
Over the last 11 years, several European countries have protested in the EU against the "tax haven for retirees" created by Portugal, seen as a sort of unfair competition in the community family. However, Brussels has never taken action, also because in that case it would also have had to act against the actual tax havens that thrive undisturbed within the Union (from Ireland to Holland via Malta, without forgetting Jean's Luxembourg Claude Juncker, former president of the EU Commission).
Also the Bloc de Esquerda, a left-wing Portuguese party, has repeatedly contested the benefits granted to foreign pensioners, judging them discriminatory against local pensioners, who are forced to pay their taxes in full.
Now Costa is looking for a synthesis between these opposing forces, hoping that the new tax, very light, will satisfy the left and calm the protests in Europe, without dissuading European pensioners who are thinking of moving to the sun of Lisbon, Porto, the Algarve or Coimbra…
