IFICI (NHR 2.0) for Madeira property buyers

What IFICI is

IFICI is a ten-year preferential tax regime for qualifying new Portuguese tax residents. The headline rate is a flat 20% on qualifying Portuguese-source income (employment or self-employment income earned in one of the activities the law lists). Most foreign-source income is exempt from Portuguese tax, though the exemption is narrower than it was under the old NHR.

The three eligibility gates

1. No Portuguese tax residency in the previous 5 years. Absolute: you must not have been tax resident in Portugal in any of the five years before you become resident. A non-resident IRS return (for example for Portuguese rent) is not residency.
2. Qualifying activity. The law lists them: university teaching and scientific research, R&D staff, jobs in certified startups, qualified jobs in companies with investment-incentive contracts or recognised by AICEP or IAPMEI, and listed highly qualified professions (managers, engineers, doctors, ICT specialists, university teachers) in qualifying companies. Architects are not on the list (EBF art. 58.º-A; Portaria 352/2024/1, annexes I and II).
3. Qualifications. For the highly qualified professions route: a doctorate-level qualification (EQF level 8), or a degree at EQF level 6 plus three years of proven professional experience (Portaria 352/2024/1, art. 7.º). The other routes are checked by the body that certifies them.

Who it does NOT cover - the pension trap

The single biggest difference from the old NHR regime: foreign retirement pensions are EXCLUDED from IFICI coverage. Under classic NHR, foreign pensions were exempt until 2020; from April 2020 new NHR entrants paid a flat 10% instead (Lei 2/2020). Under IFICI, pensions are taxed at the normal progressive IRS rates. For a Madeira resident in 2026 that is the regional table, from 8.75% to 33.6% (Decreto Legislativo Regional 8/2025/M).

If you are retiring on a pension, model your tax bill at standard rates BEFORE signing a property purchase.

What IFICI does cover (if you qualify)

• Qualifying Portuguese-source employment or self-employment at a flat 20%.
• Foreign dividends generally exempt (provided not from blacklisted jurisdictions).
• Foreign royalties and capital gains generally exempt (with exceptions).
• Foreign rental income generally exempt (but UK-source rental is still taxable in the UK under the UK-PT treaty - check jurisdiction).

How to register

1. Establish Portuguese tax residency: more than 183 days in Portugal in any 12-month period that starts or ends in the year, or a home there on any day of that period that shows you mean to keep it as your habitual residence (CIRS art. 16.º).
2. Apply via the Portal das Finanças by 15 January of the year after the year you become tax resident (Portaria 352/2024/1, art. 2.º). If you apply late, the regime only starts in the year you register, and the years before are lost (EBF art. 58.º-A n.º 7).
3. Submit evidence of the qualifying activity (for example your employment contract) and proof of your qualifications (Portaria 352/2024/1, art. 4.º).
4. Registration lasts 10 years, non-renewable.

IFICI + Madeira-specific overlays

Madeira's regional tax regime (International Business Centre / CINM) can complement IFICI for entrepreneur buyers. A CINM-licensed holding or service company pays 5% corporate tax through to 2033 (licensing deadline 31 December 2026). Pair this with D2 entrepreneur residency, IFICI on personal income, and a Madeira primary residence and the total tax profile can be materially below mainland European jurisdictions - but the structure is fact-sensitive and should be designed by a CINM-experienced tax advisor, not a relocation consultant.