Portuguese Taxes, Healthcare & More
What you asked for...
Thank you again to everyone who took the time to complete my reader survey. Many of you provided suggestions for topics you would like me to cover. Today I will address three topics that I have written about before. In addition, I will highlight the top three topics requested. I promise these will be addressed in future posts.
You Asked Me to Address These 3 Topics
With well over 300 posts on file, it can be difficult for new readers to find everything available on this site. There is a rudimentary Table of Contents, that can be found here. There is also a search feature available on the Homepage…but it doesn’t always provide the results one is expecting. So permit me to address three topics that were requested and that I have written about before.
1. Taxes (an American perspective)
When researching Portugal we learned about NHR (the Non-Habitutal Resident) status that reduces an immigrant’s tax obligation for the first ten years.1 We have been required to file Portuguese taxes for the past two years. (Note: We did not file for 2020 because we arrived on 31 December of that year and did not meet with SEF and become Temporary Residents until mid-2021.) We use a Portuguese tax preparer to do this for us. We pay €350 a year for this service. (Yes, I realize there are companies that charge less…we are not the best shoppers but are extremely happy with the service we have received.)
So far, we have not paid a cent in Portuguese “income” taxes. Why?
The short answer is the amount we pay in US taxes is greater than our tax liability in Portugal under NHR. Many people find this confusing, so permit me to try to simplify it.
Under NHR, we are taxed 10% for foreign income and pensions.
The US and Portugal, like most countries, have a tax treaty….meaning the amount you pay in one country offsets the others. (EG: Let’s say a couple paid $10,679 to the US and their Portuguese taxes came out to €7800. The amount paid to the US is greater than the amount owed to Portugal so nothing additional is owed. Please note: you must still file a Portuguese return!)
But this may change when we file taxes in April 2025 for tax year 2024. Why? Because in 2024 we will start receiving Social Security. I have not yet done an estimate of our US taxes vs. Portuguese taxes for 2024…but if I’m still writing and you are still reading in 2025, I’ll let you know.
Finally, permit me to introduce you to FBAR, an additional filing required if you have money in a foreign (non-US) bank. The US penalties for failing to file FBAR are steep, but the process is fairly easy. If you need to know how to file FBAR, watch this video.
Denise and I purchased private insurance (MGEN AdvanceCare) shortly after we arrived in Portugal. At the age of 69, our current monthly premium is €170/per person. To date, our only experience with the public system has been receiving our COVID vaccinations and discounted medication (i.e. our numero de utente appears on prescriptions providing the public rate). We have both seen private physicians for routine preventative medical and dental care, and I have had a few surgeries in Portugal. I chronicled my surgical care in the following posts:
I fell off my electric bike, then waited 5 days hoping my arm would heal itself. I tell you about my initial visit to the doctor here.
I recount my initial surgical experience here.
And I tell you what it cost here.
The care above was all provided in Cascais. Since moving to Algarve, I have had foot surgery and wrote about it here.
As discussed in the post above, my post-surgical pain management plan here was very different than what I experienced in the US for the same surgery. This led me to wonder, Why Isn’t Portugal Dopesick?
If you are considering a move to Portugal I would not worry about the quality or access to timely care in the private system. However, if you are not living in a city you might want to consider your proximity to the nearest acute care facility. When we lived in Cascais I literally walked to the hospital. In the far east Algarve, we are 50 minutes by car from the hospital in Faro. We are not too concerned with this “inconvenience”…but we know others may be.
3. What do you miss?
Again, I was asked, what do you miss? In that original post, I wrote about the cold and damp apartment we rented from afar. And I mentioned that we didn’t like renting…that I wanted “our own place”. Well, we have addressed both of those issues…so other than friends and family…I can honestly report nothing. We are closer to the London Theater district than we were to NYC, so when we need a “Broadway” fix we book an inexpensive flight. Yes, there are conveniences in the US (e.g. curbside trash pickup) but you run into people you know and strike up conversations when you walk to the dumpster or recycling 2 blocks away. For me, the more interesting question is “What don’t you miss?” and I answered that here.
Finally, permit me to mention the three topics that were most often requested by our readers.
Cost of living: Also called budgeting, or is it really cheaper?;
More construction stories: This one surprised me, but I love writing about our little project; and
Food: Specifically what if you hate Portuguese food and can you be a vegan in Portugal?
If you have been reading along for a while you know that I am pretty much an open book…so I plan to share with you the total cost of our house and what our ongoing living expenses are now that we live here. There are more construction lessons to share, and we don’t yet have our habitation license…so I’ll be writing about that too. And finally, though I have proved in prior posts I am not a food blogger, I will take another stab at answering your food questions. And if you have something you would like to recommend, please comment below.
Espero que volte na próxima semana, Até lá, Tchau
Please note, the rules changed in 2020. If you registered as a Non-Habitual Resident prior to March 2020 all foreign income was tax-free. Those that registered after that date currently pay 10% on foreign income and pensions, and 20% on income generated in Portugal.