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As Digital Nomads Flock to Lisbon, Portugal's Youth Are Leaving in Droves

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Re: As Digital Nomads Flock to Lisbon, Portugal's Youth Are Leaving in Droves

#21

Post by jmyeet »

lm28469 wrote: post #11
jmyeet wrote: post #8

Expats can be helpful to a country like Portugal but it has to be done correctly. And of course it hasn't. What Portugal needs to do is: 1. Ban Airbnb and other short-term housing other than renting out a room in your house ; 2. Provide a huge stock of social housing, meaning housing at an affordable price only available to natives; and 3. Restrict foreign ownership of huge swathes of the country. This could be as si…

Expats and digital nomads aren't the same thing. I'm an expat but I work locally for a local company with local wages like most people around me The problem is working for foreign company which pays a salary that is way above what your peers live with, it creates insane inequalities. One month of a good tech salary is one year of min wage in Portugal

This is a distinction without a difference.

Expats often come with money from having higher wages overseas even if they work at local rates. Retirees, people who sell homes in a developed country and so on.

Other than that, the Portugese government should favor Portugese people over the interests of people who simply want to relocate without any means whatsoever. This is already the case: immigrating to Portugal requires you to show you have sufficient means in terms of assets or income. This is another reason why "expat vs digital nomad" doesn't matter at all.

Re: As Digital Nomads Flock to Lisbon, Portugal's Youth Are Leaving in Droves

#22

Post by quonn »

seydor wrote: post #17
lm28469 wrote: post #4

Earlier quoted context omitted.

> Digital nomads (working remotely, almost by definition, and not getting paid that much in the grand scheme of things, again almost by definition) a I don't think you know what you're talking about. Living in Portugal while remotely working for any semi decent tech company puts you in the top 10% earners easily

"digital nomads" are normally looking for location arbitrage, so they are not high earners, normally cheap-skates. Remote workers might be more likely to create inequality, but seriously how many are they? If they create price pressure then it means there s very little housing stock in the first place.

My back of the envelope estimate is that the nomads make up around 1-4% of the Lisbon population. That‘s certainly not insignificant.

On the other hand, the young Portuguese have been leaving the country since 2009. Millions of them earn salaries in central and northern Europe. They left without any nomads coming to Portugal.

Shouldn‘t these millions benefiting from european freedom of movement justify a mere 20k nomads in Lisbon?

edit: Maybe it‘s not millions but only half a million.

Re: As Digital Nomads Flock to Lisbon, Portugal's Youth Are Leaving in Droves

#23

Post by withinboredom »

amadeuspagel wrote: post #9
somewhereoutth wrote: post #3

In summary, salaries need to rise (and they are), and the tax system needs to raise its thresholds accordingly (and it hasn't yet?). Note that the increase in housing costs has been largely driven by AirBnB etc, like much of the more desirable to tourists parts of Europe. Digital nomads (working remotely, almost by definition, and not getting paid that much in the grand scheme of things, again almost by definition) a…

There is a limited supply of apartments. If a digital nomad lives in one, then a native portuguese can't live there. This is basic math.

Yep! I was there recently for work and we decided to go on a walking tour given by a local who grew up there, arranged by a coworker who was from there. Our guide took us through one neighborhood and commented that this neighborhood used to be bustling all day and long into the night, but now it is 95% airbnb. During the winter, most of the houses are completely empty. It's effectively a dead neighborhood, but the architecture is neat. Just 15 years ago, you'd walk through the neighborhood and experience a thriving night market ... now it's just somewhere you walk through to get to the next place.

Re: As Digital Nomads Flock to Lisbon, Portugal's Youth Are Leaving in Droves

#24

Post by reaperman »

quonn wrote: post #18
mcntsh wrote: post #15

What a hilariously short-sighted policy from Portugal. Offer visas for rich remote workers and also exempt them from contributing to health system, and give them huge tax discounts. It's like the Portuguese government actually hates its citizens.

As I wrote elsewhere, paying into the social security in Portugal with a salary of 80.000 Euros means paying 88% in taxes and social security. Do you think that is reasonable? Additionally everyone I know has their own insurance and pays for all of their health bills. And that‘s only for urgent things, planned surgeries are usually done in the home country anyway.

88% being the marginal rate? I’m assuming if you’re paid €80,000 in a year you take home more than €9,600

The way you wrote this makes it sound like people only take home €9600 on €80000 and thats rather misleading.

Re: As Digital Nomads Flock to Lisbon, Portugal's Youth Are Leaving in Droves

#25

Post by rufus_foreman »

amadeuspagel wrote: post #9
somewhereoutth wrote: post #3

In summary, salaries need to rise (and they are), and the tax system needs to raise its thresholds accordingly (and it hasn't yet?). Note that the increase in housing costs has been largely driven by AirBnB etc, like much of the more desirable to tourists parts of Europe. Digital nomads (working remotely, almost by definition, and not getting paid that much in the grand scheme of things, again almost by definition) a…

There is a limited supply of apartments. If a digital nomad lives in one, then a native portuguese can't live there. This is basic math.

What limits the supply? Are they not allowed to build new apartments in Portugal?

Re: As Digital Nomads Flock to Lisbon, Portugal's Youth Are Leaving in Droves

#26

Post by quonn »

withinboredom wrote: post #23
amadeuspagel wrote: post #9

Earlier quoted context omitted.

There is a limited supply of apartments. If a digital nomad lives in one, then a native portuguese can't live there. This is basic math.

Yep! I was there recently for work and we decided to go on a walking tour given by a local who grew up there, arranged by a coworker who was from there. Our guide took us through one neighborhood and commented that this neighborhood used to be bustling all day and long into the night, but now it is 95% airbnb. During the winter, most of the houses are completely empty. It's effectively a dead neighborhood, but the ar…

This has very little to do with nomads and everything with tourism.

15 years ago Lisbon was in terrible shape, mostly collapsing due to rent controls.

And this is still the case to a degree. You have an enormous number of houses where the (older than, I think, 55) tenants pay 50 Euros per month that cannot be increased and the landlords pay more than that just in taxes and basic fees. So no renovation is done, everything is falling apart.

Re: As Digital Nomads Flock to Lisbon, Portugal's Youth Are Leaving in Droves

#27

Post by quonn »

reaperman wrote: post #24
quonn wrote: post #18

Earlier quoted context omitted.

As I wrote elsewhere, paying into the social security in Portugal with a salary of 80.000 Euros means paying 88% in taxes and social security. Do you think that is reasonable? Additionally everyone I know has their own insurance and pays for all of their health bills. And that‘s only for urgent things, planned surgeries are usually done in the home country anyway.

88% being the marginal rate? I’m assuming if you’re paid €80,000 in a year you take home more than €9,600 The way you wrote this makes it sound like people only take home €9600 on €80000 and thats rather misleading.

It‘s not misleading. You take home 9600 in my opinion.

What you call the marginal rate is applied to the full salary as far as I know. And the social security is also applied to the full amount unless the person is employed by a Portuguese company that would pay half.

Even the most optimistic tax accountants say around 70% minimum is to be paid with various options applied. That would leave 24.000. Portugal has many loopholes of course, but the idea of the article or OP was that these loopholes are not needed or unfair. While I‘m saying they are needed or otherwise nobody would go there.

Now let me add that many nomads also have to pay into various things from their home countries. While there are double taxation agreements the story on health insurance and retirement funds and social security is much more complicated.

Unless you cut all ties to home you can come out with even less.

Re: As Digital Nomads Flock to Lisbon, Portugal's Youth Are Leaving in Droves

#28

Post by jmyeet »

quonn wrote: post #12
jmyeet wrote: post #8

Expats can be helpful to a country like Portugal but it has to be done correctly. And of course it hasn't. What Portugal needs to do is: 1. Ban Airbnb and other short-term housing other than renting out a room in your house ; 2. Provide a huge stock of social housing, meaning housing at an affordable price only available to natives; and 3. Restrict foreign ownership of huge swathes of the country. This could be as si…

> 3. Restrict foreign ownership of huge swathes of the country. This could be as simple as "new construction only". This will make the problem worse as the Portuguese will complain that the foreigners own the beautiful modern buildings. Additionally it‘s important to keep in mind that this is not feasible for EU countries with the four freedoms. It would be like Florida banning ownership of existing houses for Califo…

> This will make the problem worse as the Portuguese will complain that the foreigners own the beautiful modern buildings.

I don't agree. We already have expensive housing in every country that those who aren't wealthy might covet. Also, new construction can be done in a way where you set aside, say, 20% of the units for locals in the same way that cities like NYC try to (but, you know, better).

> Additionally it‘s important to keep in mind that this is not feasible for EU countries with the four freedoms.

That's not strictly true [1] eg Malta.

Where it isn't possible, restricting non-EU citizens would still have a positive impact.

Also, where you can't actually restrict people, you can effectively do it with taxation, like having high property taxes for non-residents. This would be perfectly legal. US states do this too (eg a non-Indiana resident pays higher property taxes than an Indiana resident).

You can also discourage rampant property speculation with high transfer taxes, again targeted at foreign buyers.

> It would be like Florida banning ownership of existing houses for Californians.

I'm a big fan of doing this in Hawaii.

> ... would totally kill the Portuguese tourism industry

Build hotels. Build dedicated short-stay accomodation. Allow hoome owners to have ADUs. Build infrastructure for tourism. Don't use theoretical hits on tourism to make locals homeless.

[1]: https://realting.com/news/where-it-is-banned-or-hard-for-for...

Re: As Digital Nomads Flock to Lisbon, Portugal's Youth Are Leaving in Droves

#29

Post by ohashi »

quonn wrote: post #16
IG_Semmelweiss wrote: post #10

I believe Portugal was about to end the golden visa. Can someone expand on this topic? Also, is it true to say the golden visa is not attractive to US citizens? Finally, which foreign citize s benefit the most from the Portugal golden visa?

Yes. It has ended the Golden Visa and also the NHR tax exemption scheme. It may take some time to become law, but some time next year everything will be gone.

Not quite on the golden visa. Just the real estate option.

https://www.portugal.com/news/portugal-officially-ending-gol...

Re: As Digital Nomads Flock to Lisbon, Portugal's Youth Are Leaving in Droves

#30

Post by binarycrusader »

reaperman wrote: post #24
quonn wrote: post #18

Earlier quoted context omitted.

As I wrote elsewhere, paying into the social security in Portugal with a salary of 80.000 Euros means paying 88% in taxes and social security. Do you think that is reasonable? Additionally everyone I know has their own insurance and pays for all of their health bills. And that‘s only for urgent things, planned surgeries are usually done in the home country anyway.

88% being the marginal rate? I’m assuming if you’re paid €80,000 in a year you take home more than €9,600 The way you wrote this makes it sound like people only take home €9600 on €80000 and thats rather misleading.

I'm not sure I quite understand the structure, but it does look relatively high: https://en.wikipedia.org/wiki/Taxation_in_Portugal

The calculator here shows it's not anywhere near 88% though in most cases: https://investomatica.com/income-tax-calculator/portugal

  Income Before Tax       80 000 €
  Income Tax            - 25 472 €  
  Solidarity Rate Tax          0 €
  Social Security       -  8 800 €

  Total Tax             - 34 272 €
  Take Home Pay           45 728 € 
  Total Deductions      -  8 800 € 
  Average Tax Rate          42,8 %
Disclaimer: of course this varies significantly based on freelancing, government employee status, etc.
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