Key Takeaways
- New York estate tax can significantly reduce larger estates, especially around the state exemption “cliff,” where a small valuation increase can trigger substantial tax.
- Portugal currently applies no inheritance tax to direct heirs such as spouses, children, parents, and grandchildren, even when those heirs are non-residents.
- Portugal’s Golden Visa, obtained through qualifying fund investments of at least €500,000, offers Portuguese residency, light stay requirements, and visa-free Schengen travel for up to 90 days in any 180-day period.
- Portugal extended the standard residence period for citizenship to 10 years in a 2025 legal reform, which shapes long-term planning for Golden Visa families and other residents.
- VIDA Capital advises investors on using the VIDA Fund and the Portugal Golden Visa to support inheritance and residency planning; contact VIDA Capital to review your options.
The Stakes: Why Inheritance Tax Planning is Critical for High-Net-Worth Individuals
Inheritance tax planning directly affects how much family wealth passes to the next generation. In high-tax jurisdictions such as New York, state estate taxes can force the sale of businesses or properties to cover liabilities.
A family with a $10 million estate in New York can face hundreds of thousands of dollars in state estate tax, on top of any federal exposure, which may remove a large share of the estate that would otherwise support education, business succession, or long-term security.
International residency options give families tools to align their tax exposure, lifestyle, and mobility. Understanding these trade-offs helps determine whether a move from a jurisdiction like New York to Portugal fits your overall estate strategy. Discuss how a Portugal Golden Visa might fit into your inheritance plan.
New York City: The High Cost of Legacy Transfer in a High-Tax Jurisdiction
New York’s estate tax framework creates significant exposure for many high-net-worth families. For 2025, the state exemption stood at $7.16 million per person, which was well below the federal exemption of $13.99 million and pulled more estates into the state tax net.
The state uses progressive rates from 3.06 percent to 16 percent on taxable amounts above the exemption. The most challenging feature is the “cliff” rule, where estates valued at more than 105 percent of the exemption become taxable from the first dollar rather than only on the excess.
An estate valued at $7.16 million pays zero New York estate tax, while an estate of $7.2 million can owe over $100,000, even though the values differ only slightly. This structure makes precise planning and valuation especially important.
New York also does not offer portability of the state exemption between spouses. Surviving spouses cannot simply use the unused state exemption from the first spouse to die, so many couples rely on trust planning to reduce exposure.
Families who want to limit this ongoing exposure often explore alternative residency options. Learn how a Portugal Golden Visa can complement New York estate planning.
Portugal: A Strategic Haven for Intergenerational Wealth Transfer via Golden Visa
Portugal currently does not levy inheritance tax on direct ascendants and descendants, including spouses, children, parents, and grandchildren. This treatment generally applies regardless of the heirs’ tax residency, which makes Portugal attractive for cross-border family planning.
The Portugal Golden Visa allows investors to qualify for Portuguese residency through a minimum €500,000 investment in eligible funds. Golden Visa holders must spend at least 14 days in Portugal every two years, gain residency rights in Portugal, and can travel visa-free across the Schengen area for up to 90 days in any 180-day period.
The program grants a temporary residence permit valid for 2 years, followed by two further 2-year renewals if the investment and stay requirements are maintained. After 5 years, Golden Visa holders can apply for permanent residency. As the approval card issuance usually takes a year, you will most likely only need to do a single renewal instead of two in the 5-year period.
The VIDA Fund is an asset-backed vehicle structured for Golden Visa eligibility. The fund focuses on acquiring and transforming existing hospitality properties in Portugal, giving these assets a second life and anchoring the strategy in tangible hotels rather than purely projected cash flows.
Legal and immigration planning remain essential. A Portuguese lawyer guides each step of the Golden Visa process, from application and biometrics through renewals, and helps align residency with your broader estate and tax planning. Speak with VIDA Capital about combining legal guidance with a fund-based Golden Visa strategy.
Head-to-Head Comparison: NYC vs. Portugal Inheritance Tax Regimes
Exemption Thresholds and Applicable Rates
New York’s estate tax exemption of $7.16 million in 2025 created liabilities for many high-net-worth households and applied rates up to 16 percent on larger estates.
Portugal, by contrast, currently applies no inheritance tax on transfers to direct heirs such as spouses and children. For many families, this removes the need to structure complex vehicles purely to mitigate inheritance charges.
The Cliff Effect and Predictability
The New York cliff rule makes small shifts in valuation or timing create large tax differences, which reduces predictability and often increases reliance on complicated planning tools.
Portugal’s current approach to direct heirs offers a clearer framework for estate planning. Families know that qualifying transfers to spouses, children, parents, and grandchildren do not trigger inheritance tax under the present rules.
Residency, Citizenship, and European Comparisons
Portugal is currently one of the only countries in Europe that offers a path to citizenship without requiring relocation, using a stay requirement of 14 days every two years for Golden Visa holders. Spain has ended its Golden Visa program, and Greece requires residents to live there for about 7 years, and pay taxes there, to move toward long-term status, which is a very different lifestyle commitment from Portugal’s model.
Portuguese Parliament approved a new citizenship framework in October 2025 that extended the standard residence requirement to 10 years for most applicants, while nationals of Portuguese-language countries (CPLP) and EU citizens follow a 7-year requirement. This framework is expected to apply to Golden Visa residents, except for those who submit citizenship applications before the new law is published.
The Role of the Portugal Golden Visa in Wealth Preservation
The Golden Visa gives families a residency base in Portugal, along with visa-free Schengen travel, while they maintain their primary life and business elsewhere. It does not create residency rights across the European Union during the Golden Visa period, but it can open a path to an EU passport over time, subject to the evolving citizenship rules.
Compared with options that require full relocation, such as the long-term residency paths in Greece and Spain, Portugal’s structure can serve as a “Plan B” that protects flexibility and supports inheritance planning.
Comparison Table: Inheritance Tax Benefits – New York City vs. Portugal
|
Feature |
New York City |
Portugal (for Non-Residents/Direct Heirs via Golden Visa) |
|
Tax Type |
Estate tax applies; no inheritance tax |
No inheritance tax for direct heirs |
|
Exemption (2025) |
$7.16 million (individual) |
Not applicable for direct heirs, as there is no inheritance tax |
|
Tax Rates |
3.06 percent to 16 percent on the taxable estate |
0 percent for direct heirs such as children and spouses |
|
Cliff Effect |
Yes, estates over 105 percent of the exemption can be fully taxed |
No |
|
Residency Requirement for Benefits |
Based on the New York domicile |
14 days in Portugal every two years for Golden Visa holders |
Tax law can change, but the current gap between New York and Portugal on inheritance treatment is significant. Request a tailored assessment of how a Portugal Golden Visa might affect your estate plan.
Beyond Tax: The Broader Appeal of Portugal for High-Net-Worth Individuals
Portugal combines tax and residency advantages with stability and quality of life. Global peace rankings place Portugal among the safest countries in the world, which supports long-term planning for families.
Residents benefit from a mild climate, established infrastructure, and easy access to European and international hubs. Golden Visa holders receive residency rights in Portugal, visa-free travel across the Schengen area for up to 90 days in any 180-day period, and, after meeting the longer residence requirements under the 2025 reform, a potential path to citizenship.
Once a family secures a Portuguese passport, they gain full rights to live, work, study, and access public healthcare and education across the European Union and the Schengen Zone, which can support children and grandchildren over multiple generations.
The VIDA Fund invests in existing hotels within Portugal’s hospitality sector, acquiring and transforming properties to give them a second life. These tangible assets allow investors to participate in Portugal’s tourism economy, which saw about 31 million visitors in 2024 and generated roughly €27 billion in revenue, while avoiding overreliance on speculative projections.
Learn how Portugal’s safety, mobility, and lifestyle factors fit into your family’s long-term plan.
Navigating Your Path: The VIDA Capital Advantage for Golden Visa Investors
VIDA Capital focuses on advisory services for families who want to use the Portugal Golden Visa and the VIDA Fund to support inheritance and residency goals. The team helps clarify costs, compare options, and determine whether the Golden Visa is appropriate or whether another visa route might better fit your situation.
The advisory model emphasizes legal support. VIDA Capital connects clients with specialized Portuguese law firms because having an experienced lawyer is essential for each stage of the process, including application, documentation, biometrics, and renewals. The overall Portugal Golden Visa process usually spans 12 to 18 months.
The VIDA Fund centers on capital preservation and asset backing. By buying and upgrading underperforming hospitality properties rather than building from scratch, the fund seeks to protect principal while aligning with Golden Visa eligibility rules. Any discussion of returns should recognize that historical performance is not a guarantee of future results.
Ongoing support continues after approval, covering residency renewals and coordination with legal and tax professionals, while families concentrate on business and personal priorities. Discover how VIDA Capital can support your Portugal Golden Visa planning.
Frequently Asked Questions about Portugal Golden Visa and Inheritance Tax
How does Golden Visa residency relate to inheritance tax in Portugal?
The Golden Visa grants Portuguese residency and, when combined with appropriate legal advice, allows families to position assets so that transfers to direct heirs such as spouses, children, parents, and grandchildren generally fall under Portugal’s current 0 percent inheritance tax treatment for those family relationships.
Can my spouse or partner and children join my Portugal Golden Visa?
Family members can usually join the main applicant under a single Golden Visa application. Spouses or long-term partners can be included by presenting either a marriage certificate or another accepted proof of relationship. Children must meet specific criteria to remain under the program, such as being full-time students, not working, and remaining unmarried until the Golden Visa process and any subsequent application for the Portugal Golden Visa are complete.
What investment is required, and how does the VIDA Fund qualify?
The Golden Visa currently requires a minimum €500,000 investment into eligible investment funds. The VIDA Fund meets these criteria and focuses on acquiring and transforming hospitality assets in Portugal, giving these properties a second life while providing an asset-backed route to residency. Historical returns are not a guarantee of future returns, so investors should review the fund documentation and obtain independent advice before investing.
Conclusion: Secure Your Legacy, Choose Your Location Wisely with Portugal’s Golden Visa
New York and Portugal offer very different environments for passing wealth to the next generation. New York’s estate tax structure, including the cliff threshold and rates up to 16 percent, can materially reduce what heirs receive, while Portugal currently applies no inheritance tax to direct heirs.
A Portugal Golden Visa anchored by an asset-backed fund investment such as the VIDA Fund can add a useful layer to an inheritance plan, combining Portuguese residency, Schengen mobility, and a potential path to citizenship under the updated 10-year framework. The program’s limited stay requirement and 2-year residence permits, followed by two 2-year renewals and then eligibility to apply for permanent residency, support long-term planning without full relocation for many families. As the approval card issuance usually takes a year, you will most likely only need to do a single renewal instead of two in the 5-year period.
Careful coordination with legal, tax, and advisory professionals is essential in both New York and Portugal. Secure your Portugal residency and explore a potential path to EU citizenship with support from VIDA Capital.
