Whats happening in Algarve Today

There is no doubt the economic has improved in the Algarve.  In Lagos the beautiful Angelina Jolie recently visited to view a villa in Lagos over looking one of the beaches. In Lagos villas and apartments to rent in Lagos are again being built. Constructions sites have commenced in a number of locations.  This is being driven in some way by new investors from France Belgium and Scandinavia.   Portuguese Government has provided favourable taxations conditions for those people to invest their pensions in Algarve villas.     Its not just Lagos apartments similarly development have commenced with apartments in Albufeira.

Beach Albufeira

Coupled with the fact budget airlines like Ryanair Easyjet and other regularly fly into  Faro

Recently this new tax proposal took a small set back as following pressure from the Finnish government and public opinion in the Scandinavian country, Helsinki has announced a deal which will allow it to come after expat pensioners, who are residing in Portugal, for income tax payments from which they were previously exempt.

The idea behind this exemption was reportedly conceived following pressure from interest groups in Sweden, and following Portugal’s agreement to waive income tax on pensions, the legislation effectively spread to cover all EU member states and any other nations with which Portugal shares tax agreements.
Scandinavian and French nationals have been particularly swift in taking Portugal up on its offer of tax exemption, resulting from the application of Article 81 of the IRS Code.
Figures from the Finance Ministry recently showed that while people taking up the beneficial tax treatment in Portugal failed to exceed a hundred a year in the first four years following its introduction, this number exceeded ten a day in 2015 and continues to rise.

Belem Tower Lisbon
Lisbon Belem Tower

The special regime for pensioners allows an exemption of a foreign occupational pension so long as its beneficiary qualifies for a special tax regime for non-habitual residents.
One of the requirements is that the pensioner be a non-habitual resident for Portuguese income tax purposes, while the second is that the pension is an occupational pension, paid from a foreign source.
Should these requirements be met, the pension will not be taxed in Portugal and depending on the provisions of the applicable tax treaty, it is also usually non-taxable in the source country for the duration of residence in Portugal.
The idea behind this exemption was reportedly conceived following pressure from interest groups in Sweden, and following Portugal’s agreement to waive income tax on pensions, the legislation effectively spread to cover all EU member states and any other nations with which Portugal shares tax agreements.

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