The Portuguese government has introduced a tax cut plan for people under 35. This is part of the "You Have a Future in Portugal" program, designed to help young professionals save money and participate in the economy.
1. Income Tax (IRS) Reduction
Starting in 2025 (pending parliamentary approval), employees and self-employed individuals under 35 could enjoy a 66% reduction in income tax for all but the top tax bracket (€81,199 and above).
Maximum Tax Rate: For those earning less than €81,199, the maximum tax rate would be capped at 15%.
Self-Employment Boost: Combined with the first-year social security exemption for self-employed individuals and the digital nomad visa, Portugal could become even more attractive for young professionals than the existing Non-Habitual Resident (NHR) scheme.
Tax Planning for Families: Expat families could leverage this benefit by employing working-age children in family businesses, paying them up to €81,199 annually, and benefiting from the reduced tax rates.
2. First-Time Homebuyers Tax Benefits
For young people buying their first home, the government plans to offer:
IMT and Stamp Duty Exemptions: No Municipal Property Transfer Tax (IMT) or stamp duty for homes valued up to €316,272.
Partial Exemption for Higher Values: For homes valued between €316,272 and €633,453, the maximum exemption for the lower bracket applies. However, there’s no exemption for properties exceeding this amount.
Expat Family Opportunity: Families moving to Portugal could use these benefits by purchasing a home for their children.
3. Government Guarantee for First-Time Buyers
A public guarantee will cover up to 15% of the property value for first-time buyers under 35.
Eligibility Criteria: Properties must be valued at €450,000 or less, with buyers earning up to the 8th IRS bracket (up to €81,199 annually). Buyers must also not own property or have benefited from previous guarantees.
A Boost for Young Professionals and Expat Families
These measures make Portugal increasingly appealing to young professionals and their families. From reduced income tax to homeownership incentives, this package could significantly ease financial burdens while offering creative tax planning opportunities.
Could these benefits make Portugal your next destination? Let us help you explore the possibilities!
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