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How to Leverage Your Home to Become a Cash Cow as Your Pension

How to Leverage Your Home to Become a Cash Cow as Your Pension

For pensioners, taxes are something of a burden. Since they don’t have a regular income and aren’t working a full time job, having to pay taxes on their pension is seen by them as an unnecessary expense. This is the reason why pensioners in the UK want to move elsewhere in the European Union (EU) to find tax relief. Portugal is one of the countries in the EU that offers a unique opportunity to them. The NHR (Non-Habitual Residency) program launched by the Portugal government gives UK pensioners the chance to avoid having to pay taxes on their pensions if they become tax residents in Portugal. To find out more about tax in Portugal, visit this website.  

Advantages of the NHR Program

The NHR program is quite beneficial for pensioners and has a great number of advantages to offer them. The following are some of the ways in which UK pensioners can use it for their advantage.

Tax Free Income

 Incredibly Low Tax Rate

Under the NHR program, any income gained by a pensioner or any other individual from his country of origin will be considered tax free. This means that if a person is to rent out his home in his home country then the rental income he receives from his tenant won’t be taxed either in his home country or in Portugal where he has qualified for the NHR program. It is an incredible way for pensioners to leverage their home and make it a source of income for them on which they don’t have to pay any tax whatsoever. The income sources that are considered tax free under the NHR program also include royalties, interests and dividends too. The NHR program allows for an individual to enjoy a flat discounted income tax rate of just 20% provided he is working in a professional capacity in a high-value industry. The high-value industries for which the low tax rate is valid for include Engineering, Fine Arts, Medicine, Management, Teaching and Economics. This flat rate will remain for a period of 10 years which is quite a lot. So, if a UK pensioner can get a job in a high-value industry in Portugal then he can save up on income tax in Portugal for up to 10 years all the while enjoying tax free pension from his country of origin. It is really a win-win situation for him.

Criteria for the NHR Program

The benefits of the NHR program are so lucrative that every UK pensioner would love to avail it. However, there are some stipulations that a person has to fulfil in order for them to qualify for this program. So, before you apply for it, it will be a good idea to find out what these criteria are.

•    You will have to get yourself registered as a tax resident in Portugal.

•    You will have to provide proof that you haven’t remained a tax resident in Portugal for the past five years.

If you are able to match these criteria then you should apply for the NHR program and get approved for it as soon as possible.

Applying for the NHR Program

The application process for the NHR program is not that difficult. However, there are forms that you need to fill out and documents that will need to be presented in order to gain approval. Moreover, there is also the requirement of registering as a tax resident in Portugal. There are two ways to go about when it comes to applying for the NHR program. You can choose to take the personal route and perform all the tasks yourself. This would require you to get the forms downloaded from the internet and then submitting them after filling them out with the necessary details to the relevant offices for examination and approval. It can take up to 8 months for this process to complete.

The other way of applying for the NHR program is to hire the services of a special accountant or tax advisor. They are going to do all the work for you and then ask you for a fee for their services. This fee will typically range anywhere from €750 to €3500. This is quite a high fee. However, if you are willing to pay it then you will not have to do much for getting approved for your NHR status. The tax advisors will make sure that you gain approval quickly and are able to start enjoying the tax benefits in Portugal soon.



We have helped many of our clients have a more comfortable retirement. Read what some of them have said about us.

Rosa H. Sargent

My husband and I have been looking for a way to obtain an additional source of income for quite a while now but were unable to do so until we came into contact Annual Assembly. We did not have a good understanding on equity release but they did a great job explaining it to us.

Sean B. Elliott

When my wife and I entered retirement, it was difficult. We did not invest much in retirement planning so all that we had was our assets, more specifically our property. We thank Annual Assembly for showing us how easy it is to use our property to generate income for us.  

Edmund A. Lee

When the concept of equity release schemes was introduced to me, I did not know much about these schemes but I did know that I did not want to lose my house and that I wanted to be able to provide for my family during my retirement. Annual Assembly made if very easy for me to understand this concept and now I benefit from it on a weekly basis.