天美麻豆

@magicsam

It might (!) have been a good idea to have the tax future planned before organizing the move and buying a house. Doing your taxes in Portugal can be very easy, but at least once you should do it with a tax advisor who know both tax systems (Portugal and USA).

I agree, planning ahead of the project execution is usually a better outcome. So many details to know. If this is all I missed it will be fine. My retirement income stream was locked in prior to any thoughts of moving and I can't make many adjustments.

The higher income tax is offset by savings elsewhere. I still believe the move is a good choice for quiet retirement lifestyle.

Hi Sam,

While standard mainland Portuguese income tax rates can scale up to 48% for high earners, the Autonomous Region of the Azores exercises its regional fiscal authority to give tax residents a direct break:聽

1. Regional IRS Reduction: Personal income tax rates for residents of the Azores are reduced by up to 20% compared to the standard national brackets on mainland Portugal.
2. Regional VAT & Corporate Advantages: If you plan to set up a business or invoice locally, reduced regional VAT rates and a lower regional Corporate Tax (IRC) rate also apply.

This local reduction applies automatically once you update your tax address (morada fiscal) to your new house in the Azores on the Portal das Finan莽as.

Thanks for that information Johnny,

I was also told that property taxes are lower than Michigan. And speaking of state tax, I won't be paying for roads that are never fixed, like here in pot-hole country. So it is understandable that income tax is higher. Goverment services have to be paid for somehow.

I didn't ask the new neighbors if they pay a local tax. I won't mind paying for community support. I have already sampled the hospitality of the Casa do Povo da Ribeirinha.

Bom Dia

Sam

According to research I made, in the Azores, the parish of Ribeirinha exists in two distinct municipalities: Angra do Hero铆smo (Terceira Island) and Ribeira Grande (S茫o Miguel Island). In both, the IMI rate applied to urban properties is the national minimum of 0.30%. This means that the annual IMI amount to be paid is:

IMI Payable = Taxable Property Value (VPT) 脳 0.3% - discount

Discount = a fixed amount that depends on the number of children

VPT = value of the urban property (calculated by the AT - Portuguese Tax Authority). It is usually lower than the purchase price.

I'm sorry Johnny, I should have been more specific. I know they duplicate names across several islands.

I am moving to the Ribeirinha parish on Faial Island.

Thanks to your post, you gave me enough information to find the details about Faial, I know the IMI rate is the same there. There will be no children on the property except for my brother, who won't grow up. Even at maximum VPT, I calculate the payable to be less than 1/4 of what I paid last year.

I'll take it.

I have a new question. What is the protocol, do I聽 start a new post or ask here?

What can I do to minimize the impact of the USA dollar to euro exchange?

Thank you

In that municipality of Faial, the rate is also 0.3%.

Regarding currency exchange:

1. Avoid making direct bank transfers between your US bank and your bank in Portugal.
2. Use specialized exchange platforms (Wise or Revolut). Services like Wise use the mid-market exchange rate and charge only a small, transparent fee (usually under 0.5%鈥�0.6%).
3. On Wise, set up two accounts: one USD and one EUR. You can transfer USD from your US bank to your USD account on Wise.
4. You can hold a USD money on Wise and convert it to EUR on your EUR Wise account only when the exchange rate is more favorable to you.
5. Then, transfer from your EUR Wise account to your EUR bank account in Portugal.