'Want to buy a house in Portugal? The government has just raised real estate prices'

Portugal has long been popular with travelers, and in recent years it has become an area for high-income foreign buyers. However, that could all be about to change. This month, the Portuguese government announced plans to end a special tax regime for non-permanent residents starting in 2024.

In the current NHR program, qualified individuals who are at least partially resident in the country enjoy tax relief for up to 10 years on income earned in Portugal and are also exempt from paying taxes on their worldwide income. In addition, Portugal also said in February that it would discontinue its gold visa program due to concerns that wealthy foreigners were driving up the prices of''real estate.

"We already have clients who are going to reconsider their plans," Alex Ingrim, a private equity manager and senior investment analyst at Chase Buchanan, told Business Insider. - "I think it's made a lot of people think about why they were moving to Portugal if it turns out to be not as easy as they initially thought it would be. "

The good news is that Americans and other foreigners already living in Portugal will retain their tax benefits for the 10-year residency period.

According to the latest Property-Market Index report, housing costs across the country have risen by 6.5 percent over the past year due to the country's inability to meet demand. In the Algarve region, prices have risen by 15 percent over the same period and cities such as Lisbon have experienced similar increases. At the Quinta do Lago golf community on the Algarve coast, prices have risen by more than 28 percent since 2020, and the research firm estimated that values will rise another 19 percent by 2025.

"People are starting to think about it and say, '\'OK, Portugal was the easy answer, and now there are no other easy options. France, Italy or Spain can renew their attraction'\'," Ingrim told Insider.