Retire in Portugal as an expat

Portugal is a popular location for retirees, as well as the favourable climate, scenery, popular tourist hotspots and reduced tax options, those who retire to Portugal enjoy affordable living costs, good property costs, a decent standard of healthcare and generally good infrastructure and security.

The Algarve region has proved popular with English-speaking expats in particular. Made up of 16 municipalities on the Portuguese southern coast, it includes beautiful beaches and clifftops and was recently rated as the ‘most affordable option in Europe for retirees’ by Forbes, notably for its affordable living estimated at around USD 1,500–700 per month in smaller towns, or around USD 2,200 for larger cities, such as Lisbon. Other popular retirement communities in Portugal can be found in Cascais, Guimaraes, Lisbon, and Madeira, among others.

Portugal scores well for its reasonable property price to income ratio, with the cost of living in Portugal around 31 percent lower and rent around 48 percent lower than in the UK. Those planning to buy property can also take advantage of relatively low real estate prices compared to other European countries.

Since 2009, Portugal has offered a Non-habitual Residence (NHR) option to attract foreigners to the country by offering favourable tax conditions, including for earnings otherwise subject to Portugal retirement tax. Those granted NHR status will have any overseas income – including earnings from work, business, investments, rental income, capital gains and pensions – exempt from taxation in Portugal for a period of 10 years. There will also be no tax on wealth during this period. In addition to this, any income generated in Portugal will be taxed at a flat rate of 20 percent instead of at the progressive rates, which can be as high as 48 percent.

Portugal’s National Health Service, known as the Servico Nacional de Saude (SNS), provides free healthcare in Portugal to all Portuguese citizens and foreign residents. The SNS is publicly funded and provides healthcare through community health centres, hospitals and local health units. The standard of healthcare in Portugal through the SNS is considered good by international standards. Non-EU residents looking to retire in Portugal can also take advantage of the Golden Visa scheme, which was introduced to attract investors from non-EU countries.