What D7 applicants should know in 2026
Portugal has several tax rules that can work well for people planning a move here, particularly retirees, investors and couples with different income levels.
A D7 visa does not itself give you tax concessions. These are general Portuguese rules, and residents are normally taxed on worldwide income. New arrivals should assess foreign pensions under the ordinary rules and the relevant tax treaty, rather than assuming they qualify for the old NHR regime. Worldwide-income rules, NHR transitional rules
1. Qualifying long-held crypto gains can be tax-free
Gains from selling qualifying crypto assets held for at least 365 days can be excluded from Portuguese income tax. That can be a meaningful benefit for someone with a long-term investment.
The exclusion has conditions, including the asset’s classification and the jurisdictions involved. NFTs and business activity need separate analysis. And for US citizens, a Portuguese exemption does not remove potential US tax. Portuguese crypto rules, US taxation abroad
2. There is no general annual tax on your net wealth
Portugal does not generally charge an annual tax simply because you have a substantial investment portfolio, savings or property abroad.
AIMI is the important property-specific exception. It generally covers Portuguese residential property and building land, with a €600,000 deduction per individual, or €1.2 million for couples choosing joint AIMI assessment. Those thresholds concern combined taxable property values, known as VPT, rather than purchase prices.
Income and gains produced by your assets can still be taxed. AIMI scope, allowances, couples’ election
3. Inheritances between close family members receive generous treatment
A spouse, qualifying unmarried partner, children, grandchildren, parents and grandparents are exempt from Portugal’s 10% inheritance stamp duty.
Other beneficiaries generally face 10% on assets within Portugal’s territorial tax rules. Lifetime gifts can also attract stamp duty, and gifts of Portuguese property generally retain a separate 0.8% charge even between exempt family members. Family exemptions, territorial rules, stamp-duty rates
For British families, moving to Portugal does not automatically end UK inheritance-tax exposure. Previous UK residence and UK assets can still matter. HMRC guidance
4. Modest pensions can face a modest tax bill
In mainland Portugal, the first income-tax bracket for 2026 is 12.5% on taxable income up to €8,342. The 48% rate applies only to the slice above €86,634, rather than your entire income. 2026 income-tax bands
The €12,880 “mínimo de existência” can also protect people whose income comes predominantly from pensions, employment or qualifying self-employment, subject to conditions. For some retirees on modest pensions, this can mean little or no Portuguese income tax.
It is not a general tax-free allowance for rental income, interest or dividends. Minimum-existence rules
5. Recent income-tax changes have reduced the burden
For 2026, income-tax band thresholds rose by approximately 3.51%, while the marginal rates in brackets two to five fell by 0.3 percentage points.
These changes followed reductions during 2025. Higher thresholds and lower rates can leave people with more of their income, although the saving depends on their circumstances. 2025 rates, 2026 rates
6. Property gains benefit from a 50% inclusion rule
Under the normal rules, only half of a taxable property capital gain is added to your other income and taxed at progressive rates.
For example, a €100,000 taxable gain would generally add €50,000 to the income-tax calculation. That does not mean a €50,000 tax bill. Property-gain calculation
Selling a qualifying main home and reinvesting in another qualifying main home in Portugal or an eligible EU/EEA country can also provide full or partial exemption. Normally, reinvestment must occur within 24 months before or 36 months after the sale.
Full relief generally requires reinvesting the proceeds after repaying the qualifying acquisition mortgage, rather than just the profit. Residence and reporting conditions apply. Retirees and people aged 65 or over may also qualify through investment in specified pension or insurance products. Reinvestment relief
7. Some dividends can be taxed on only half their value
Dividends from qualifying Portuguese and EU/EEA companies can benefit from 50% inclusion if you choose to add them to your income taxed at progressive rates.
This can produce a better result than the usual 28% rate. However, company eligibility and documentation matter, and the relief does not generally extend to dividends from US or UK companies. Dividend relief
The choice is made annually, but generally brings all income in the same tax category into aggregation. Compare the full calculations before choosing. Aggregation rules
8. Qualifying residential landlords can benefit from a 10% rate
The 2026 housing legislation introduced a 10% income-tax rate for qualifying residential rental income where the monthly rent stays within the applicable ceiling—€2,300 in 2026—unless a more favourable rate applies.
The relief covers qualifying income from 1 January 2026 through the end of 2029, including qualifying existing contracts. Eligibility depends on the actual arrangement, and this rate does not automatically bring an AIMI exemption. Rental-income relief, housing legislation
9. Joint filing can help couples with unequal incomes
For couples choosing joint taxation, the progressive rates are applied to half their combined taxable income, and the resulting tax is then doubled.
This can make a substantial difference when one partner receives most of the household income. It is worth comparing joint and separate filing each year. Joint-taxation rules
Everyday spending can help too. Eligible restaurant, hairdresser, garage and veterinary invoices can generate an income-tax credit based on 15% of the VAT paid, within a shared €250 household limit. Giving your NIF and checking your invoices in e-fatura helps you claim what you are entitled to. Invoice-related deductions
10. There are mechanisms to reduce double taxation
Portugal’s tax treaties and foreign-tax credits can help when income crosses borders. Depending on the treaty and type of income, taxing rights may be allocated to one country, or one country may credit tax paid in the other.
These protections can make a substantial financial difference. They have limits, though: a foreign tax payment does not always cancel the Portuguese bill, and extra Portuguese tax may remain payable. Getting the treatment right matters. Foreign-tax-credit rules
One more benefit for homeowners
The ordinary annual IMI rate on urban property is generally 0.3%–0.45% of its taxable value. For illustration, a €100,000 VPT at 0.3% produces a €300 annual bill before any relief. IMI rates
Qualifying main homes with a VPT of no more than €125,000 can receive a three-year exemption, provided prior-year gross household income is no more than €153,300 and the other conditions are met. Municipalities can extend this by two years. The benefit can generally be recognised twice for the same taxpayer or household. Main-home exemption
Portugal offers some useful tax advantages. How much they are worth to you depends on where your income comes from, what you own and whether another country still has a claim to tax.
For anyone considering a D7 move, a calculation using your own income and assets is far more useful than a headline tax rate.
Want to talk to a expert tax advisor about your situation? Book a tax consultation.
Figures refer to 2026 and, for the income-tax bands, mainland Portugal. Checked September 2026.