How to retire to Portugal (and where!)
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Written by Chris Nye

24th May 2022

Retiring to Portugal is something many people dream about. Fortunately, even post-Brexit it’s a dream that plenty of international retirees can fulfil. There are some 100,000 retiree residents in the Algarve alone, enjoying the fine food, relaxed outdoor lifestyle and enviable climate. 

This guide to retiring to Portugal takes you through the most important basics of living in one of Europe’s sunniest destinations. It provides inspiration around some specific places to live, and also touches on some of the key practicalities.

Let’s start right at the beginning:

Why retire to Portugal?

Portugal has been a popular retirement destination for six decades. It frequently appears near (or at) the top of lists of the best places to retire. Most recently, it came forth on International Living’s 2022 Retirement Index.

Not only is Portugal a desirable place to live, it’s also an economical choice. Compared to other EU countries, the cost of living is among the lowest. Better still, many of the things that are relatively cheap in Portugal are things that could be considered luxuries elsewhere: Gourmet-standard coffee, sea-fresh fish, leisurely outdoor lunches and world-class wine.

As if that weren’t enough, the weather is free. Portugal enjoys over 300 sunny days each year – more than California.

Portugal’s low cost of living can spread to property too. House prices have risen in recent years, as they have in most other places, and there’s certainly no shortage of glamorous coastal real estate for those with the budget. However, there are still plenty of low-cost options. They include rustic renovation projects, older sea-side properties, smallholdings in the hills, and even city boltholes.

It’s easy to buy a property in Portugal too, with no shortage of specialist lawyers and estate agents well used to working with international buyers.

If you’re considering retiring to Portugal, you can expect a warm welcome in many ways. It begins with the people. The country has a thriving population of overseas residents. Many speak Portuguese and are fully integrated with the open-armed locals. As with any overseas destination, you get more out of living there the more you absorb the culture and the language.

However, Portugal makes things easy while you find your feet. English is widely spoken, especially in popular areas like the Algarve. It’s an incredibly welcoming, safe and unintimidating place.

Portugal is also a welcoming place to migrate to when it comes to bureaucracy. The country works hard to attract international residents (and remains very much open to Brits in a post-Brexit world). Initiatives like the Golden Visa and Non-Habitual residency scheme specifically set out to make life easy (and often financially beneficial) to incoming expats.

If you want to buy a property in Portugal to enjoy as a holiday home and one day retire to, you can rest assured that the country wants you there too.

Where to Live?

The southern Algarve region is often where retirees have in mind when they think of Portugal. However, there are plenty of other options. There’s a quick rundown below. The fact that it merely scratches of Portugal’s options says much for the attractions of the country.

The Algarve

 This popular region contains plenty of diversity in a compact area. As well as the popular beach resorts, there are working cities (such as Faro and Tavira), and mountainous inland areas where you can live “off grid” whilst still being close to the action.

Even the coast itself is hugely varied: Windswept surfing beaches to the west, sun-drenched coves in the centre, and vast sandy seascapes in the east.

The Alentejo

 A vast area with an interesting coast of its own, the Alentejo offers some of Portugal’s finest food and wine, and some varied and economical property options. There are also some serious extremes of temperature in the inland areas. Make sure you like it hot!

Central Portugal

 The destination of choice for those seeking rural living, and still a place where you can find jaw-droppingly cheap property options. The landscapes are varied and stunning, dotted with mountains and river beaches.

The Cities

 Lisbon, Portugal’s capital, is the perfect “city by the sea”, maintaining a relaxed pace of life despite increasing popularity as a hub for start-ups and tech firms.

Porto offers a completely different vibe (and a somewhat cooler climate) for those who seek it. Lesser-known Coimbra is a university city, packed with history and known for a bohemian lifestyle.

There are plenty of other smaller cities to choose from. Be sure to take a look at Evora, Sintra and Tomar.

The Silver Coast

A popular alternative to the Algarve, the Silver Coast (broadly situated between Porto and Lisbon) is often seen as that bit more “authentic”. It’s increasingly popular with foreign residents. As well as being home to a wide selection of stunning beach resorts, it’s also well connected for dipping into city culture.

Northern Portugal and the Green Coast

 Northern Portugal is a cooler part of the country, and perhaps the least discovered by expats. It’s home to mountains and natural parks, and is another place where property can prove very affordable.

Madeira and the Azores

Don’t overlook Madeira, or even the Azores. Offering a very different lifestyle, the islands have a climate often described as “eternal spring” and offer the kind of tranquillity that’s hard to find anywhere else in the world.

Visas and Residency

A question many people ask is “can I live in Portugal after Brexit?” Thankfully, the answer is “yes!”

It’s not quite as straightforward as it was in the pre-Brexit days of freedom of movement. However, the D7 retirement visa – the same as that required by any non-EU retirees – is relatively easy to obtain. The minimum income requirement (for the primary applicant) is equivalent to Portugal’s minimum wage, which is €8,460 per year for 2022.

The process for getting a visa in Portugal begins with contacting the embassy or consulate in your home country. Portugal is known for requiring plenty of paperwork – as such, many retirees make use of an agency or solicitor to assist.

EU residents face a simpler process, thanks to freedom of movement. However, they are still required to register their residence in the country.

It’s also worth noting that high net worth individuals may be able to benefit from the Golden Visa scheme. This enables a fast-track to residency when people make a significant investment in property, or into a Portuguese business or fund.

Healthcare in Portugal

Healthcare in Portugal runs along similar lines as the UK NHS, although very small fees are charged for things like GP visits and trips to the emergency room. Those with formal Portuguese residency can gain access to the healthcare system on the same basis as the Portuguese themselves.

If you’re retiring to Portugal from the UK, you will be able to obtain an S1 form from the UK if you’re in receipt of a state pension. Registering this form with Portugal’s social security department (the seguranca social) should enable you to sign up with the Portuguese state healthcare system.

It’s worth noting that some retirees (and plenty of locals) opt for private healthcare in Portugal, which can be less expensive than you might expect. One-off visits to private GPs can cost around €50, and some opt to do this rather than wait for appointments at state surgeries.

Inheritance Tax in Portugal

Global inheritance tax legislation can be complicated, but there’s a good chance that being resident in Portugal will prove beneficial to retirees when estate planning.

There’s no inheritance tax in Portugal, as such, but there is a 10% “stamp duty” tax – payable by the recipient – on gifts passed on after death. However, spouses and dependents qualify for an exemption on this tax.

It’s important to seek professional advice on these matters. However, it’s reasonable to assume you may be in a position to reduce the tax liability when you pass, as a result of choosing to retire to Portugal.

From tax benefits to lifestyle upgrades, Portugal has it all – and it has the weather too.

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