Finance: Expat finances news in Portugal

The government has implemented a new tax package for housing, including a reduction in the value-added tax (Imposto sobre o Valor Acrescentado or IVA) on construction from 23% to 6% and a decrease in the personal income tax (Imposto sobre o Rendimento das Pessoas Singulares or IRS) on rental income to 10%. These measures, which aim to increase housing supply and support tenants, apply retroactively to the beginning of the year. Additionally, the annual deduction limit for rent paid under the IRS has increased from 700 to 900 euros.

The Bank of Portugal is consulting with financial institutions on a proposal to reduce the maximum debt-to-income ratio for new home loans from 50% to 45%. This macroprudential measure aims to curb excessive household debt and ensure long-term financial stability in the housing market.

President Marcelo Rebelo de Sousa has enacted a government decree extending the credit moratorium for families, companies, and social institutions impacted by recent winter storms. The extension lasts for 12 months, providing financial relief for those struggling with the aftermath of the severe weather. The President stated he will monitor the regulation of this measure to ensure its effectiveness.

Cancer patients can now request corrections to their personal income tax (Imposto sobre o Rendimento das Pessoas Singulares or IRS) returns for previous years. This follows a Supreme Court ruling favoring taxpayers whose disability ratings were reassessed below 60%, with the government confirming the issue is now resolved.

Financial institutions returned 8.91 million euros to customers in 2025 following interventions by the Bank of Portugal (Banco de Portugal or BdP). The regulator also noted an increase in consumer complaints, particularly regarding digital fraud and difficulties in closing bank accounts.

The Tax and Customs Authority (Autoridade Tributária e Aduaneira or AT) has issued a warning regarding fraudulent emails and SMS messages currently circulating. These messages impersonate the tax office to trick taxpayers into clicking malicious links designed to steal personal and banking information. The AT reminds the public that it only sends official communications from verified domains.

Property owners are reminded that the Municipal Property Tax (Imposto Municipal sobre Imóveis or IMI) is due for payment throughout May. Unlike in previous years, the tax authority will not send physical payment notices by post, though the payment deadlines remain unchanged.

Taxpayers who missed the opportunity to claim the Youth IRS (IRS Jovem) in their 2023 or 2024 tax returns can still submit a correction. The tax authority allows for a replacement declaration until June 30th, though a standard fine of 25 euros typically applies to these late submissions.

Prime Minister Luís Montenegro has reaffirmed his commitment to labour reform, stating that the country must move forward with the process. While the Socialist Party (Partido Socialista or PS) has urged the government to withdraw the bill, the Chega party has expressed willingness to negotiate, provided the government agrees to lower the retirement age.

Prime Minister Luís Montenegro stated it is too early to approve a permanent pension increase, though he remains open to one-off supplements if public finances allow. During a parliamentary debate, the Socialist Party (Partido Socialista or PS) leader José Luís Carneiro urged the government to prioritize those on minimum pensions facing high living costs.

The Bank of Portugal (Banco de Portugal or BdP) is advising customers to contact their banks if they face difficulties resuming home loan payments. The moratorium, which allowed for a temporary suspension of payments for families affected by severe weather, officially ends on April 28.

Socialist Party (Partido Socialista or PS) Secretary-General José Luís Carneiro recently accused the government of overseeing the second-highest tax burden in 15 years. Prime Minister Luís Montenegro disputed the claim during a parliamentary debate. Official data from the National Statistics Institute (Instituto Nacional de Estatística or INE) confirms the tax burden, defined as the weight of tax and social contribution revenues in the GDP, reached 35.4% in 2025.

A recent conclusion from the Advocate General of the European Union regarding case C-70/25 suggests that banks may no longer use 'gross negligence' as a blanket defense to deny reimbursement for digital fraud. The opinion argues that financial institutions should be required to reimburse unauthorized transactions immediately, shifting the burden of proof onto the banks if they wish to pursue claims of customer negligence.

The Tax and Customs Authority (Autoridade Tributária e Aduaneira or AT) has issued warnings regarding an increase in fraudulent schemes targeting taxpayers during the current income tax (Imposto sobre o Rendimento de Pessoas Singulares or IRS) filing period. Criminals are using the agency's name to send deceptive messages about refunds or outstanding debts to steal personal information.

The Prosecutor-General's Office (Procuradoria-Geral da República or PGR) has issued a warning regarding a new wave of cyber fraud targeting taxpayers. Criminals are sending mass messages via WhatsApp and email falsely claiming that recipients have outstanding debts to the Tax Authority (Autoridade Tributária or AT). Authorities advise citizens to be cautious of these fraudulent requests for payment.

The annual income tax (Imposto sobre o Rendimento das Pessoas Singulares or IRS) filing campaign is underway, and authorities are reminding self-employed workers to verify their requirements. Economically dependent freelancers may be required to submit an additional social security annex (Anexo da Segurança Social) alongside their standard Model 3 declaration. Taxpayers are encouraged to review their specific filing obligations to ensure compliance.

The three-month window to submit annual tax returns (declaração de IRS) for 2025 income opens today on the Finance Portal (Portal das Finanças). Taxpayers have until June 30 to file, regardless of whether they are employees, pensioners, or self-employed workers (trabalhadores a recibos verdes). Experts warn that refunds may be lower this year because the Tax Authority (Autoridade Tributária e Aduaneira or AT) adjusted withholding tables mid-year to leave more money in monthly paychecks.

Homeowners with variable-rate mortgages will see monthly payments increase by up to 18 euros this month as Euribor rates react to geopolitical tensions. Data from the National Statistics Institute (Instituto Nacional de Estatística or INE) shows inflation rose to 2.7% in March, largely driven by higher fuel costs. These market shifts are affecting both existing contracts and new loans, including those with mixed-rate options.

Taxpayers have until the end of today to dispute expense values on the Finance Portal (Portal das Finanças) before the income tax (IRS) filing period begins on Wednesday. The President of the Republic also approved the expansion of the automatic tax return (declaração automática) to include more young taxpayers under the revised Youth IRS (IRS Jovem) rules. Experts warn that changes to withholding tax (retenção na fonte) tables last year may result in smaller refunds for many households.

The Ministry of Finance (Ministério das Finanças) confirmed that young people benefiting from the youth tax regime (IRS Jovem) will now be covered by the automatic tax return (IRS Automático). This change, effective this year, removes the requirement for manual filing for eligible taxpayers under the “Modelo 3” form. The measure aims to simplify the tax settlement process for younger residents.

Taxpayers have until Tuesday, March 31, to contest the value of expenses recorded by the tax authority for 2024 income. Residents should check the Portal das Finanças to verify that health, education, and general family expenses are correctly listed before the official tax filing period begins on April 1. This is the final opportunity to ensure all tax deductions (deduções à coleta) are accurately applied to the upcoming IRS return.

The Portuguese Association of Insurers (Associação Portuguesa de Seguradores or APS) has revised the estimated cost of damages from early 2024 storms upward to one billion euros. While insurers have already paid out over 260 million euros, many residents in hard-hit areas like Arruda dos Vinhos remain displaced due to slow state aid and severe infrastructure damage. Property owners should ensure all storm-related claims are documented as the total volume of reported losses continues to rise. Residents in affected regions should check with local councils regarding the status of state support applications.

A new analysis indicates that Portugal is among the Eurozone countries most affected by European Central Bank (Banco Central Europeu) interest rate increases. Because a high proportion of Portuguese mortgages (crédito habitação) have variable rates, rising costs lead to a sharper contraction in household spending compared to other European nations. Economists also warn that the national economy is showing signs of slowing down due to broader European trends and geopolitical tensions. Those with variable-rate mortgages should monitor ECB policy shifts closely for impacts on their monthly budgets.

Minimum banking service accounts (Serviços Mínimos Bancários or SMB) reached a record 265,627 at the end of 2025, according to the Bank of Portugal (Banco de Portugal). These accounts cost approximately €5.37 per year and provide essential services like a debit card, home banking, and MB Way. Residents looking to reduce banking fees should note that existing current accounts (contas de depósito à ordem) can often be converted to this lower-cost format.

The Tax and Customs Authority has introduced changes to the personal income tax (Imposto sobre o Rendimento de Pessoas Singulares or IRS) return forms for young workers. Starting April 1, those eligible for the Youth IRS (IRS Jovem) must use a new field in Annex A (Anexo A) to opt into the updated tax regime. Young tax-paying residents should ensure they use the correct codes to benefit from the significant tax exemptions available under the new rules.

The Tax and Customs Authority (Autoridade Tributária e Aduaneira) clarified that Non-Habitual Residents (Residentes Não Habituais or NHR) can cancel their status to benefit from the Youth IRS (IRS Jovem) regime instead. This option is available to those who have never utilized the NHR tax benefits and meet the age requirements for the youth scheme. Taxpayers should consult a professional to determine which regime offers greater savings before the April filing deadline.

The Tax and Customs Authority (Autoridade Tributária e Aduaneira) has clarified that the capital gains tax (mais-valias) exemption for reinvesting in a primary residence is limited when a property owned by one person is sold to buy a home jointly. In such cases, the tax benefit only applies to the share of the new property corresponding to the original owner, typically 50%. Homeowners planning to sell a property they purchased while single to buy a new home with a partner should be aware of these potential tax liabilities.

Severe weather earlier this year has led to 616 loans being placed under moratorium at Crédito Agrícola, totaling €124 million in debt relief for affected customers. The damage was particularly heavy in the central region, with the municipality of Arganil alone reporting €1 million in losses to local roads and infrastructure. Local authorities are still working to restore access to areas like Piódão, where landslides have interrupted traffic. Residents in the central interior should be aware of ongoing road repairs and check with their financial institutions if they require assistance due to weather-related property damage.

Fitch Ratings kept Portugal's sovereign rating unchanged at A but upgraded the outlook to positive, citing expectations that public debt will decline significantly over 2026–2029 thanks to prudent fiscal policy. The move follows a similar outlook upgrade from S&P at the end of February, suggesting rating agencies are seeing lower medium‑term deficits. The change could help Portugal's borrowing costs and influence investor confidence; residents who follow government borrowing and interest‑rate trends should note possible knock‑on effects.

Allocation of pensions that combine contributions to Social Security and the Caixa Geral de Aposentações remains complex and currently averages about seven months. The president of the Social Security Information Institute told ECO that processing times should improve and that changes will take effect by June. The backlog and complexity affect retirees whose records span both regimes, and the institute is promising faster decisions in the coming months. Those awaiting joint pensions should keep documents ready and monitor communications from Social Security (Segurança Social) and their pension offices.

ECO summarises monthly tax and reporting obligations for companies and households, noting invoicing rules under Model 10 (Modelo 10) and a March 2 deadline for the IRS Model 37 (Modelo 37) declaration listed by EContas. The piece is a reminder that businesses and families must keep on top of multiple filings this month to avoid penalties. Taxpayers and business owners should check the full EContas checklist and their AT online account for specific deadlines.

Lenders warn that mortgage repayments that reset every six months will rise as reference rates remain high, meaning many borrowers face bigger instalments when their contracts reprice. The report says mortgages indexed to short‑term rates and updated semi‑annually will be most exposed, prompting some buyers to seek renegotiation or refinancing. Homeowners with variable contracts should check their loan terms and speak with their bank about options.

Taxpayers must submit changes in household composition and validate deductible expenses on the Tax Authority Portal (Portal das Finanças) and confirm receipts via E‑Fatura before the deadline on Monday, according to tax guidance. Missing the window can mean lost deductions or delayed tax refunds, so residents who paid eligible expenses or had family changes this year should log in and check their records now. Those uncertain about document requirements should contact an accountant or the tax helpline.

The government raised the minimum wage to €920 for 2026, up €50 from €870, and announced support measures for businesses and workers including simplified layoff rules and expanded income support. The change affects paychecks from next year and is part of a broader income agreement the government cites to boost household income. Low‑paid workers will see higher take‑home pay, while employers should plan for higher payroll costs and check whether sector agreements or contracts change. Workers and small employers should watch official calendars for the implementation date and payroll guidance.

A regulator instruction requires banks to report sales of credit portfolios to the Bank of Portugal (Banco de Portugal) starting this Wednesday, RTP reports. The measure forces lenders to notify the supervisor when they sell loans or debt portfolios, increasing transparency about transfers of non‑performing and performing credits. Borrowers whose debts are sold and investors in credit products may see faster notifications and should check statements and communications from their bank. Borrowers and those with outstanding loans should watch for bank notices about any transfer of their debt.

The Lisbon Stock Exchange (Bolsa de Lisboa) closed up 1.71% at 9,245.67 points, reaching levels not seen since June 2008, Lusa reports via RTP. Gains in stocks such as NOS and Mota‑Engil drove the rise; investors should note recent volatility and consult advisers before trading.

The indebtedness of Portugal's non‑financial sector — households, companies and public administrations — fell to €851.3 billion in 2025, equivalent to 277.9% of GDP, the lowest level in the series, the Bank of Portugal (Banco de Portugal) reports. The decline reflects strong economic performance even as nominal debt rose by €28.9 billion; the lower ratio may ease some pressure on public finances. Residents and investors should note the improved debt‑to‑GDP metric, but also that nominal indebtedness remains high.

Euribor rose on Monday for the three‑month (2.034%) and six‑month (2.145%) tenors while the 12‑month rate held at 2.205%, ECO reports. Shorter‑term mortgage rates or loans that reprice frequently may become costlier at the next reset. Those with variable‑rate mortgages or planning purchases should check loan conditions and speak with lenders or advisers.