Portugal closed its non habitual resident regime to new arrivals on 1 January 2024, and a great many relocation comparisons still recommend it. That is the clearest reason to distrust the genre, and it is why this post starts with what has actually changed rather than with weather and beaches. Here is the correction that matters. The Madeira perk people talk about is gone. The Madeira perk that is worth having survived, and almost nobody mentions it. Since 1 January 2026 every one of the nine regional income tax brackets in Madeira sits about 30 per cent below the mainland Portuguese equivalent, which puts the top marginal rate at 33.6 per cent on income above 86,634 euros against 48 per cent on the mainland. That is not a ten year holiday for new arrivals. It is a permanent discount for anyone tax resident in the region, and it does not expire. A tax table is useless if you cannot get a permit, and this is where the three diverge hardest. Gibraltar paused new long term residency registrations for EEA and UK nationals on 6 October 2025 after more than 3,000 people arrived between 2022 and 2024. That pause ran for nine months. It ended when the [Residency Regulations 2026](https://www.gibraltar.gov.gi/press-releases/hm-government-of-gibraltar-publishes-residency-regulations-2026-5482026-12192), published in the Gazette on 9 July 2026 as Legal Notice 166 of 2026, came into operation on 14 July 2026, with applications now going through the government's residency portal. The new Gibraltar framework asks applicants to show a genuine connection through employment or business activity, appropriate accommodation, and tax and social insurance contributions. Cyprus and Madeira are both inside the European Union, so an EU citizen simply moves. A British or other non EU citizen does not, and needs a Portuguese or Cypriot residence route of their own. If you hold an EU passport, the three are equally open to you and this section changes nothing. If you do not, it may decide the whole question before tax enters the room. |What you pay|Gibraltar|Madeira|Cyprus| |Top marginal rate|39 per cent under the Allowance Based System, 28 per cent under the Gross Income Based System, and you elect the cheaper one|33.6 per cent above 86,634 euros|35 per cent above 72,000 euros| |Tax free band|Exempt below 11,450 pounds of taxable income on the allowance based route|None, the lowest bracket is 8.75 per cent|First 22,000 euros from 1 January 2026| |Special regime for new arrivals|Category 2 and HEPSS, both capped|IFICI at 20 per cent, narrow eligibility|50 per cent exemption on employment income over 55,000 euros| |Corporate rate|15 per cent since 1 July 2024|5 per cent inside the Madeira International Business Centre, the ordinary Portuguese rate otherwise|15 per cent since 1 January 2026| |Consumption tax|No VAT, but transaction tax at 15 per cent since 10 April 2026|VAT at 22 per cent|VAT at 19 per cent, as the [EU rate tables](https://taxation-customs.ec.europa.eu/taxation/vat/vat-rates_en) confirm| |Capital gains tax|None|Yes|Only on Cyprus immovable property and shares in companies holding it| |Currency|Pounds sterling|Euros|Euros| Two of those rows deserve a warning label. Gibraltar runs two parallel personal tax systems and you are taxed under whichever gives the lower bill. The allowance based route charges 14 per cent on the first 4,000 pounds, 17 per cent on the next 12,000 and 39 per cent on the balance, against reliefs. The gross income route has no reliefs and tops out at 28 per cent. Which one wins depends on your income and your family circumstances, so treat any single headline rate for Gibraltar with suspicion, including ours. The second warning is about VAT. Gibraltar's famous absence of it is no longer the whole story. Transaction tax replaced import duty on 10 April 2026 at a transitional 15 per cent, rising to 16 per cent next year and then to a rate expected to track the lowest EU VAT rate. It is charged on cost price rather than shelf price, so it is not a straight 15 per cent on what you pay, but it is no longer nothing. Gibraltar's pitch to wealthy arrivals is a ceiling rather than a rate. A Category 2 individual is taxed on the first 118,000 pounds of assessable income only, with a minimum tax of 37,000 pounds a year and a maximum of 42,380 pounds, as [PwC's summary of the regime](https://taxsummaries.pwc.com/gibraltar/individual/other-tax-credits-and-incentives) sets out. That minimum applies even if your assessable income is tiny, which is the part that catches out people who assume a cap only ever works in their favour. The entry price went up sharply this year. On 18 June 2026 the Government [announced that the minimum net wealth requirement rises from 2 million pounds to 5 million](https://www.gibraltar.gov.gi/press-releases/government-announces-changes-to-category-2-regime-4692026-12107) for new applicants, with the application fee going from 1,233 pounds to 5,000. Existing Category 2 holders are grandf