What is the Portuguese NIF Number?

“NIF” stands for Número de Identificação Fiscal Tax (tax identification number). It is a 9-digit unique personal identifier used for tax purposes. This tax number is needed for most relevant legal acts carried out in Portugal, such as the opening of a bank account or the purchase of a property.

You can ask for a NIF at any Portuguese tax office or other designated offices. The number itself is issued on the spot, totally free of charge. However, fees may be involved if you ask for an official card with the NIF or need a fiscal representative.

You will need a representative when you are not a Portugal or European Union resident. The tax representative is responsible for complying with the tax obligations of the represented person and can be a natural person or a company. 

Anyone with a fixed residence in Portugal who accepts the responsibility is eligible, regardless of nationality, so you could ask a friend or someone who knows you in Portugal. It is also possible to obtain the NIF without the holder’s presence in Portugal. For this purpose, you will need a copy of your passport, proof of address, and a power of attorney. 

United European Citizen Registration in Portugal

The registration certificate is mandatory for EU citizens intending to stay in Portugal for longer than 3 months. To make your registration in Portugal, you only have to apply for a Certificate of Registration of Citizen. Besides EU citizens, the Certificate of Registration of Citizen of the European Union could be requested by any citizen of Iceland, Liechtenstein, Norway, Andorra and Switzerland.

Application

After 3 months in Portugal, citizens must apply for a certificate within the next 30 days.
The request can be made at the City Council of the residence, in person, by completing a compliance statement and valid identification document such as a passport.
Certificates are issued for a maximum of 5 years from the issue date.
The application can also be made by a lawyer as long as he has the necessary powers to act on your behalf. [If you need any help, contact us at info@ncadvogados.pt].

Renewal

You may only apply for renewal of the certificate upon expiry of the validity period is shorter than the period legally established for this purpose, up to a maximum of 5 years.
After this period, you must submit an application for a residence permit to the Immigration and Borders Service.
You may also request the changing of data, such as name and address.
The previous certificate must be returned to the City Council.

Replacement

In case of loss or theft, you should contact the Public Security Police (PSP) in advance to obtain the respective statement.
If the certificate number is no longer visible due to deterioration, you should contact the Public Security Police (PSP) in advance to obtain the respective statement. Otherwise, the previous certificate (original) must be returned to the City Council.

Cancellation

The original certificate must be cancelled and returned to the City Council before the end of the respective expiry date should the citizen leave the country permanently.
Failure to comply with this requirement may preclude the issuing of a new certificate.

Residential Property in Portugal

The European Systemic Risk Board (ESRB) has recently issued its assessment of the vulnerabilities of the residential property sector in Portugal. The main vulnerabilities pointed out to the national market are:

– overvalued house prices, which have been rising since 2016;

– high household indebtedness, although it is falling;

– low demand in new home loans regarding interest rate spreads.

The ESRB considers that the policy applied by the Bank of Portugal to the sector has been adequate and sufficient and that the risk to the financial system is medium. The main vulnerabilities do not stem from credit for housing, despite the fact that mortgage credit in Portugal is one of the largest slices of bank credit portfolios among European countries. 

The Bank of Portugal’s 2018 recommendations, which established criteria to be met by banks when granting credit regarding loan-to-collateral ratios and borrower debt, have had an effect, according to the ESRB. However, by the end of 2022, the average maturity of mortgage credit limits will have to be gradually lowered to 30 years. 

In this context, the Bank of Portugal has updated its recommendation in this regard, with rules that begin to apply from 1 April.

 The ESRB recalls that Portugal had a high number of mortgage loans under the moratorium as part of the prudential and fiscal measures implemented due to the pandemic, so a deterioration in the quality of credit institutions’ assets is likely.

As a substantial part of housing-related operations are carried out outside, without domestic credit, if the economic scenario is less favorable than expected, Portugal may have to change its macroprudential policy, as the measures recommended by the BdP will not be effective here in making the financial system resilient to risk absorption.

Moreover, it is not intended to add additional and unjustified costs to borrowers already facing overvalued house prices, partly due to external demand characterized by high purchasing power. 

High prices

In 2020 and the first half of 2021, house price growth remained high despite the pandemic. Average price growth was 8.6% in 2020, up from 9.3% in 2019. There are indicators that suggest that the Portuguese property market has remained highly resilient in the face of the COVID-19 shock. The number of transactions decreased by 22% in the second quarter of 2020, but returned to 2019 levels in the third and fourth quarters of 2020. 

For the ESRB, the increase in the number of building permits granted from the end of 2020 suggests a growing supply of housing, which could ease demand pressures on house prices.

Mortgage lending has not been the main driver of house price rises lately, but it is becoming so. This credit grew by 2.4% in August 2021. 

Only around 40% of housing transactions are funded by domestic credit, a rate that has remained largely unchanged since 2017. Recent growth rates have been positive and in 2020 they increased for the first time since 2015. This may be a sign that the trend is reversing and that the domestic mortgage market is recovering.

Annual rates highest in Europe

The ESRB notes that interest rate spreads have been narrowing and are relatively low (0.8% in August 2021). However, borrowers in Portugal pay one of the highest annual percentage rates in the EU to cover mortgage loan charges; in addition to interest payments, the charges include the costs of maintaining the accounts required to conclude the credit agreement and the cost of the insurance needed to obtain the loan.

Household debt was falling until recently but has started to rise again, driven by mortgage lending. In 2020 credit to households reached 69% of GDP; in the first quarter of 2021, it rose to 93.6% of disposable income.