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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

#81

Post by [deleted] »

quonn wrote: post #51
lastdong wrote: post #44

Earlier quoted context omitted.

Employed by a portuguese company 80000€ / year is taxed average 42.8%, take home after tax: 45728€ This gives you a monthly pay after tax of 3811€ (way above average in the country, which unfortunately is really low)

Right. But as a nomad you cannot just give up your own health insurance and you cannot just stop paying into a foreign retirement fund yourself. Portugal won‘t allow you to deduce that, of course, and it‘s another 1500-2000 per month to subtract in case of private insurance for example. Leaving around < 2000 net. And as I said that‘s without the mandatory social security problem on foreign income.

[deleted]

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

#82

Post by quonn »

seydor wrote: post #78
quonn wrote: post #51

Earlier quoted context omitted.

Right. But as a nomad you cannot just give up your own health insurance and you cannot just stop paying into a foreign retirement fund yourself. Portugal won‘t allow you to deduce that, of course, and it‘s another 1500-2000 per month to subtract in case of private insurance for example. Leaving around < 2000 net. And as I said that‘s without the mandatory social security problem on foreign income.

isn't the whole point of moving to europe to get away from expensive insurance?

I am European, self-employed. But the health insurance is not free there either. For example in Germany it is around 700 per month privately. Some pay 900. It is independent of the salary if private and dependent on it if public. And you have to either pay into a retirement fund or should do it privately and budgeting around 2000 in total is realistic. In my home country this can be partially deduced. In Portugal not, so it‘s subtracted from the net salary.

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

#83

Post by quonn »

somewhereoutth wrote: post #66
quonn wrote: post #51

Earlier quoted context omitted.

Right. But as a nomad you cannot just give up your own health insurance and you cannot just stop paying into a foreign retirement fund yourself. Portugal won‘t allow you to deduce that, of course, and it‘s another 1500-2000 per month to subtract in case of private insurance for example. Leaving around < 2000 net. And as I said that‘s without the mandatory social security problem on foreign income.

Assuming you/your employer are paying social security contributions, then you can give up your own health insurance. People in Portugal tend to have private healthcare plans for everyday stuff, but they are insanely cheap. For urgent/serious things, the public system is effective enough. However you will need to contribute for at least 15 years before you qualify for a pension, and as you say there are no deductions…

I think I have explained the typical situation a few times in this thread but I will try again.

1. Nomads are not employed by Portuguese companies.

2. They could give up their home health insurance, but then they cannot remain residents of their home countries where this is mandatory. And since nomads are nomadic they cannot leave Portugal. The insurance would usually only work there.

3. And the retirement fund is the far bigger chunk.

In short, the laws of different countries do not align so the tax deductable things do not align either. This is exactly the reason why the Portuguese government has introduced these measures in the first place.

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

#84

Post by quonn »

seydor wrote: post #77
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.

you 're probably applying the highest tax bracket to the whole amount, but that's not how it works

Absolutely that is how it works in Portugal. You have a deductible that get‘s bigger but the tax is applied in full:

https://taxsummaries.pwc.com/portugal/individual/taxes-on-pe...

More importantly the social security is applied in full as well and it‘s 11% for the employee and 23% for the employer and if there is no Portuguese employer it‘s 34% on top of the regular taxes.

There are many options to work around this, all legal and there on purpose. I‘m not denying that. My point is only that these options are necessary and fair.

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

#85

Post by quonn »

somewhereoutth wrote: post #65
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.

Nonsense. My gross might not be quite 80K, but my total tax burden including social security is about 33%. The healthcare system here is a mix of state provided urgent/serious care - to a high standard - and private but very cheap options for more mundane matters. Furthermore, that social security contribution buys into one of best defined benefit pension schemes still available anywhere.

Do you have a Portuguese employer? If so this is not surprising at all.

> Furthermore, that social security contribution buys into one of best defined benefit pension schemes still available anywhere.

Ridiculous. It‘s not even close to being funded in the long term. It‘s one of the worst on the continent where all of them them some problems.

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

#86

Post by quonn »

seydor wrote: post #80
moltar wrote: post #62

I spoke to a real estate agent about the housing problem. And it’s not an obvious one. And one very few ever talk about. The problem is that most builders need to borrow money from the bank for a project. But the government red tape can take from 1-3 years. Plus the building phase can be 1-2 years. So a total of 2-5 years. Builders cannot property plan project schedule, finance schedule and are feeling excessive risk…

does portugal need more buildings since their population is going down? Is there not available inventory at all, or is it another case of many houses sitting empty? Also, hopefully the airbnBust will come to europe next year , i feel the airbnb meme is way overdone

It is not sustainable to have declining population numbers for many reasons (for example the social security system needs a large working population) so Portugal is working to have immigration, especially from Brasil, Angola and also from Europe.

Additionally while the population is declining across the country but rising in the Lisbon area where the problem is and where the jobs are.

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

#87

Post by [deleted] »

quonn wrote: post #84
seydor wrote: post #77

Earlier quoted context omitted.

you 're probably applying the highest tax bracket to the whole amount, but that's not how it works

Absolutely that is how it works in Portugal. You have a deductible that get‘s bigger but the tax is applied in full: https://taxsummaries.pwc.com/portugal/individual/taxes-on-pe... More importantly the social security is applied in full as well and it‘s 11% for the employee and 23% for the employer and if there is no Portuguese employer it‘s 34% on top of the regular taxes. There are many options to work around this,…

[deleted]

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

#88

Post by reustle »

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?

> is it true to say the golden visa is not attractive to US citizens?

It was still attractive because it gave you a pretty fast path to a second citizenship.

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

#89

Post by rafaelmn »

quonn wrote: post #54
rafaelmn wrote: post #31

Earlier quoted context omitted.

Shift burden from income tax -> property tax. My country (Croatia) has a similar issue and the finance minister even said he thinks this is the correct move but there's no "political will" to do this.

In Portugal far more people own houses than in other countries and these people have no interest in voting for such a policy.

Same thing as Croatia (realeatate investment is viewed as only safe investment and basically people's retirement savings).

Economic situation (and mentality) is very similar - Portugals problem seems to be more extreme though since it's located in a more interesting area (closer to developed Europe).

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

#90

Post by quonn »

rafaelmn wrote: post #89
quonn wrote: post #54

Earlier quoted context omitted.

In Portugal far more people own houses than in other countries and these people have no interest in voting for such a policy.

Same thing as Croatia (realeatate investment is viewed as only safe investment and basically people's retirement savings). Economic situation (and mentality) is very similar - Portugals problem seems to be more extreme though since it's located in a more interesting area (closer to developed Europe).

I heard some people are just starting to consider Croatia, EU integration is still happening, the Euro just arrived. Give it 10 years …
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