New rules for former residents looking to return to Portugal: what’s changed in the State Budget
If you’re thinking about returning to Portugal in the coming years, here’s some good news: the State Budget introduced changes to the Return Program (Programa Regressar), with tax benefits and financial support to make your move easier.
Current Tax Regime — “Programa Regressar” (Return Program)
The Return Program still offers significant tax relief for those who come back to live in Portugal:
Article 12-A of the Personal Income Tax Code (Código do IRS) allows a 50% exemption on employment income (salaried, business or professional), for 5 years, up to a maximum of €250,000/year.
To qualify, you must:
Become a tax resident in 2025, 2026 or 2027;
Not have been a tax resident in Portugal in the previous 5 years (for example: you return in 2025, having lived abroad from 2020 to 2024);
Have been a tax resident in Portugal before that period of absence.
Income above €250,000/year does not benefit from the exemption.
This regime remains in effect until 31 December 2026.
Eligibility Conditions
To join the Return Program, you must:
Not have been a tax resident in Portugal in the last 5 years;
Have been a resident in Portugal before that period of absence (before 2020);
Have your tax and social security situation regularised.
Additional support from IEFP
In addition to the tax benefit, the Public Employment and Training Institute (Instituto do Emprego e Formação Profissional — IEFP) provides financial support to help with your return:
Between €2,546 and €3,565, depending on the type of employment contract;
A 20% increase per household member and a 25% increase for those moving to inland regions;
Additional support to cover travel costs (up to €1,527.78) and qualification recognition (up to €763.89).
Key points to keep in mind
Before moving forward, note that:
The process can be bureaucratic and requires several supporting documents — so prepare your paperwork in advance.
The old Non-Habitual Resident (NHR) regime was abolished in 2024, replaced by the new ex-resident regime and incentives for research and development.
Discussions are still ongoing about possible additional benefits for pensioners and for settling in inland areas of the country.
