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It is no longer a question of attracting rich retirees but of young people with the potential to stimulate growth, while 30% of people aged 15 to 39 born in Portugal live abroad.
Portugal, long dubbed “El Dorado” or “Europe’s California,” has attracted a wave of expats and investors thanks to its favorable tax regime and Mediterranean quality of life… 35,000 French retirees live there for more than six months a year! Until the Socialist government of António Costa blew the whistle, ending a 10-year tax exemption for foreigners in 2021. In 2023, it abolished golden visas for investors, and then all other tax gifts. “ Unusual residents ».
Faced with a housing crisis, the Portuguese executive has denounced “ injustice »These rulings are accused of raising prices. And that's without taking into account the new center-right majority that came to power in April, led by Luis Montenegro, who intends to reintroduce a flat rate on income tax. The difference is that this would exclude dividends, capital gains and… pensions, according to the report. Financial TimesBecause it is no longer about attracting older people but highly qualified young people. “ Stimulate growth ».
The problem is that the country’s central bank takes a dim view of a return to fiscal generosity, reminding the government of EU budget rules, while public spending is about to exceed the maximum allowed. On the political level, Montenegro, whose party is a minority in parliament, will have to rally a group of opposition MPs, the Socialists or the far-right party. This is a challenge, when both camps are strongly opposed to these tax cuts.
