NHR status with no rental contract or property ownership

Do you know if the NHR gets canceled as soon as the rental contract expires?    -@DrCarloRossi

Yes, it's cancelled.

One of the conditions for becoming a NHR or keep that NHR status in the year 2024 is to become ‘resident’ for tax purposes in the year 2024 (see *).

In other words, if you cease to be habitually resident in Portugal in October 2024 (without renting or buying a house), you will cease to be NHR in 2024, and will therefore no longer enjoy this status and benefits in your 2025 tax return related to 2024 income.

(*) The following become ‘resident’ for tax purposes in Portugal:

(i) staying in Portuguese territory for more than 183 days, consecutive or interpolated, during a 12-month period;

+

(ii) having stayed for less time, but having, on 31 December of the same year, a residence in Portugal in conditions that indicate the intention to maintain and occupy it as a habitual residence;

+

(iii) owning a house, demonstrating the intention to establish in Portugal the habitual and permanent residence;

@DrCarloRossi

You might want to check the validity/legality of the rental increase if it is an existing, long-term, correctly-registered with Finanças, contract. They can only increase by the contract by the published government inflation amount, which this year is 6.94%. Someone may be trying to take advantage of you - perhaps you do not speak Portuguese or understand the law very well.

@Perpetual_traveler,

What you're talking about are annual increases due to inflation. That figure you mention was for 2023 with respect to 2024. For 2025 it will be 2.16 per cent.

This is something else. If the contract is valid for x years and ends now, the landlord can increase the rent to whatever amount he wants, as long as the demand on the rental market follows this offer. The landlord is entitled to this.

If this was the landlord attempting to cancel the existing lease, and then get a new, completely new lease, perhaps yes. But, an extension of an existing lease with no changes to the existing terms and conditions, I do not think so.

This is one of the reasons thousands of Portuguese property owners do not rent their properties out - the inability to raise the rent more than inflation.

Perhaps I am wrong but all around me Portuguese people rent in apartments that are ⅓ of current market rents because the landlord could not increase by more than inflation, for decades in some cases.

Once you are in you are in and your rent is pegged.

    If this was the landlord attempting to cancel the existing lease, and then get a new, completely new lease, perhaps yes. But, an extension of an existing lease with no changes to the existing terms and conditions, I do not think so.
This is one of the reasons thousands of Portuguese property owners do not rent their properties out - the inability to raise the rent more than inflation.

Perhaps I am wrong but all around me Portuguese people rent in apartments that are ⅓ of current market rents because the landlord could not increase by more than inflation, for decades in some cases.

Once you are in you are in and your rent is pegged.
   

    -@Perpetual_traveler

Shirly if the lease has clause like " ends in 354 days from XXXX" which both parties have agreed to then a new lease needs to be agreed/signed/issued (or existing occupant exits) therefore the existing lease is not "extended"?

@strontium

Perhaps.

Most leases are 12 month leases which automatically renew unless either party cancels it. That is the standard terminology of lease contracts in Portugal. Mine says as follows:

"O Contrato presente tem o seu início em 01 de junho de xxxx, sendo a sua duração de12 meses, terminando em 31 de maio de xxxx, caso não seja validamente denunciado por qualquer das partes.O citado contrato pode ser renovado por períodos de um ano, sucessivos, até à denúncia do mesmo por uma das partes."

There is provision for extension.

Cancellation means cancellation, not threat of cancellation unless I pay more money. I do not think a court would accept a cancellation to simply engineer a rental increase from the same person.

If this language exists in his current contract then I don't believe that the landlord can do it.

I suppose the situation could exist where the owner said up front "I am giving you a 12 month contract only. You must leave after 12 months." But then later, circumstances change and the landlord might want to extend, and then says "things have changed, you can stay on but if we do this it will be a new contract at a new rent". I can maybe see a chance for the jumbo increase, but to be honest, I might consider fighting that because it is taking advantage of the tenant, in defiance of the intent of the law.

If this was the landlord attempting to cancel the existing lease, and then get a new, completely new lease, perhaps yes. But, an extension of an existing lease with no changes to the existing terms and conditions, I do not think so. This is one of the reasons thousands of Portuguese property owners do not rent their properties out - the inability to raise the rent more than inflation.Perhaps I am wrong but all around me Portuguese people rent in apartments that are ⅓ of current market rents because the landlord could not increase by more than inflation, for decades in some cases.    -@Perpetual_traveler

There's confusion here.  What you're talking about concerns pre-1990 contracts. In these cases, unfortunately the landlord has to be the guarantor of social housing, which the state should make available to these tenants, and does not (!).

The landlord can always increase the rent either at the end of the contract  as long as he fulfils the conditions imposed by law. The fact that it's automatically renewable doesn't stop the landlord from increasing the rent, as long as he gives the tenant advance notice that he doesn't want to renew. If the tenant wants to, he will have to sign a new contract with a new rent.  In the case of post #1 here, it's obviously a lease that ends now, and the landlord doesn't want to renew it with the same rent.

Thanks for clarifying.

Overlying everything is that if the landlord tries to do this he runs the risk of provoking the tenant into conflict. This is very ruthless of the landlord and would certainly get a reaction from certain tenants. I do not advocate this, of course, but I have heard that where such things occur that the tenant will refuse to leave and continues to pay the original rent every month with the required increase published by the government every year, added on.

The landlord will be faced with an expensive, long, and probably futile court path in order to evict the tenant. What the OP says is true - there is no accommodation available. Providing the tenant continues good faith rental payments, I do not believe any court in Portugal will evict and put that tenant on the street.

But then, of course, I could be wrong!

@JohnnyPT

I know a young Portuguese guy in Lisbon. He rented a place in Estoril about 5 years ago. Immediately started Airbnb'ing it.

This is totally not allowed in his contract. He doesn't care. In 5 years the landlord has not been able to step foot inside that apartment. The tenant refuses him entry. But he pays the original rent meticulously every month with the annual increase published by the government. No effort on the part of the landlord has succeeded in removing him. This young Portuguese guy knows the system... He will never leave there unless it suits him.

Providing the tenant continues good faith rental payments, I do not believe any court in Portugal will evict and put that tenant on the street.        -@Perpetual_traveler

??

But where is the tenant in good faith with behaviour like that?

This young guy was lucky because he found a landlord who was a bit weak. Although justice takes a long time, if the landlord knows how to move and have proofs, he'll be able to get his flat back. Justice takes time (and most of the times) never fails. Especially with the misuse of property that doesn't belong to the tenant and a lot of evidence proofs are easily to get.

@Perpetual_traveler

The landlord may give appropriate notice to cancel contract. Then it is a new contract and he/she may request whatever they like.

@Perpetual_traveler

This will only work for a period - not for ever if the landlord has given appropriate notice etc. Of course the courts are very slow moving and may take years to resolve if the tenant resists

@DrCarloRossi

The NHR is not contingent on having a rental or owning property - you could live with a friend rent free (if someone would put up with you). However, if you leave the country, you should inform the tax authority of your new address. The NHR is then suspended as any tax obligations to Portugal. You may return at a later date, and if the NHR period has not run out, you may enjoy the NHR benefits until the period runs out.