Portugal › Comparisons › NHR (Legacy / pre-2024) vs No special regime
NHR (Legacy / pre-2024) vs No special regime
NHR Legacy offered a 20% flat rate on Portuguese HVAA income and — crucially — exemption on most foreign-source income and a 10% flat rate on foreign pensions. For NHR Legacy holders, comparing to standard IRS highlights how much the regime saves.
Key differences
| Aspect | NHR (Legacy / pre-2024) | No special regime |
|---|---|---|
| PT-source HVAA rate | 20% flat | Progressive 12.5%–48% |
| Foreign employment income | Generally exempt | 28% or progressive (foreign source) |
| Foreign pensions | 10% flat | Progressive Cat. H rates |
| Foreign dividends/interest | Generally exempt | 28% flat or aggregation |
| Foreign rental income | Generally exempt | 28% flat or aggregation |
| Availability | Closed — existing holders only | Default for all residents |
Choose NHR (Legacy / pre-2024) if…
- Any NHR Legacy holder — always compare, but the exemption on foreign income is almost always superior
- Retirees with foreign-source pension income (10% vs. progressive rates)
- Those with foreign dividends, interest, or rental income (exempt vs. 28%)
- High earners with Portuguese HVAA employment (20% vs. up to 48%)
Choose No special regime if…
- NHR Legacy holders with very low income may occasionally find standard IRS comparable
- Those with very large personal deductions that would reduce standard IRS well below 20%
- NHR holders with entirely Portuguese-source non-HVAA income may see marginal differences
Bottom line
For NHR Legacy holders, the regime is almost always superior to standard IRS — especially with any foreign income. The 10% foreign pension rate alone makes it worth far more than the progressive Cat. H treatment. Existing holders should ensure they maintain compliance and don't inadvertently exit the regime early.
Frequently asked questions
Can an NHR Legacy holder switch to standard IRS?
NHR Legacy holders can waive their regime status, but this is almost never advisable — the benefits are too significant. Once waived, NHR Legacy cannot be reinstated.
What happens to NHR Legacy holders after their 10 years expire?
They revert to standard IRS. Planning for this transition is important — particularly for those with foreign pensions and investment income that was exempt under NHR.
NHR (Legacy / pre-2024) details
Eligibility, rates, legal basis
→No special regime details
Eligibility, rates, legal basis
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