Portugal is making waves across Europe with its bold new policies designed to attract and retain younger talent. The government has rolled out a comprehensive package of benefits aimed specifically at individuals under 35, making the country one of the most attractive destinations for young people seeking better job opportunities, a higher quality of life, and affordable housing. With tax incentives and a game-changing real estate guarantee, Portugal has solidified its position as a top choice for young professionals, entrepreneurs, and anyone looking to start fresh in a vibrant and welcoming country.
Let’s dive into what makes these changes so exciting and why Portugal is now more appealing than ever for people under 35.
The New Income Tax Benefit: Almost No Tax for 5 Years
The government’s new proposal for the “IRS Jovem” tax program allows young people under 35, whether they hold a degree or not, to exclude a part or the total income exposed to the personal income tax (IRS) on earnings up to €28,000 in their first years of employment. This threshold aligns with the lower limit of the sixth income tax bracket.
This measure is included in the proposed State Budget for 2025. The new structure of IRS Jovem will be progressively beneficial: the exemption is set at 100% in the first year, then gradually reduced - 75% for years two to four, 50% for years five to seven, and 25% for years eight to ten, limited to the €28,000 threshold. If the taxpayer’s income (after the percentage is applied) exceeds the €28,000 threshold, only the first €28,000 will qualify for the benefit.
The benefit will only apply in years when the recipient has qualifying income from categories A and B (work and self-employment income); otherwise, it will pause and resume until reaching the 10-year maximum or the recipient turns 35 (important to note that the age limit of 35 is determined as of December 31st of the income year. If the taxpayer is 36 on that date, they will not be eligible for the benefit for that income year, unless the final version of the law specifies otherwise). Eligibility starts with the first year in which the taxpayer files independently or with a partner, excluding years filed as a dependent with parents. Those benefiting from the non-habitual resident regime or scientific research tax incentives (TISRI), or who owe tax debts, are excluded from this program.
Housing Benefits: Tax Exemptions, Government Guarantees, and More
Housing has long been a major challenge for young people in many European countries, but Portugal is changing the game with its incredible new housing benefits. Under the new policies, young people canbuy their first permanent homewithout paying taxes on the property, and in some cases, even without a down payment. But it doesn’t stop there.
The Portuguese government is offering astate guaranteefor young people seeking a mortgage. The government will cover up to15% of the property’s purchase priceas a guarantee to the bank. While this doesn’t mean the state will pay for the mortgage, it significantly reduces the financial risk for banks, making it easier for young buyers to secure a loan.
This guarantee applies to homes worth€450,000 or less, so it’s a perfect option for young people looking to invest in affordable housing. And if you're in a couple, onlyone partner needs to be 35 or youngerto qualify. Plus, this benefit can be combined withtax exemptionssuch as relief fromIMT(Property Transfer Tax),stamp duty, andproperty registration exemptions—creating even more opportunities for savings.
One important thing to note is that even if you own property abroad, you can still qualify for the guarantee, if this is your first permanent home in Portugal. This is fantastic news for young expatriates or anyone looking to relocate to Portugal.
What Visas Should Young People Be Seeking to Move to Portugal?
With its appealing benefits, Portugal is becoming a top destination for young professionals and remote workers. But which visa suits your needs? European citizens can settle easily with a straightforward town hall registration. Non-Europeans have several targeted options: theD7 visafor passive income earners (€850/month minimum), theD8 visafor remote workers (€3,400/month minimum), and theD3 visafor highly qualified professionals, which requires a job offer from a portuguese company, proof of qualifications, and an income of at least €1,800/month. These streamlined visas simplify the path to living and thriving in Portugal.
A New Era for Young People in Portugal
Portugal is embracing its younger generation with open arms, offering unprecedented benefits that make it one of the most attractive destinations for anyone under 35. Whether you’re looking to save on taxes, buy a home, or take advantage of streamlined visa options, there has never been a better time to make Portugal your home.
With the combination of financial benefits, housing guarantees, and a welcoming environment, Portugal is clearly investing in its future - and the future is bright for young people. If you're ready to take the leap, FRESH is here to help you every step of the way, from navigating the visa process to securing the perfect home.
Take advantage of Portugal’s forward-thinking policies and start your new life today!
