Living In Portugal As An Expat – The Essential Guide

Get the pros and cons of living in Portugal as an expat, the cost of living, and other vital facts to help you understand whether Portugal can be your perfect home abroad.

There are some very good reasons – beyond the weather and excellent golf amenities – why Portugal is so highly regarded as an ideal place to live. Its beautiful coastline, healthy lifestyle and affordability make the country stand out among other popular southern European destinations. 

Living in Portugal after Brexit

From January 1, 2021, you can travel to Portugal and stay in the country for up to 90 days as a tourist without a visa.

To live and work in Portugal you will need to apply for a visa and go through the immigration procedures set for all non-EU citizens.

Portugal’s Golden Visa route

A quicker option is Portugal’s Golden Visa route where you invest €500,000 (or €280,000 reduced option) in a property in Portugal and gain a residency permit for a family including dependent children.

However, as of January 2022, purchasing a property in Lisbon, Porto or a coastal area like most parts of the Algarve won’t qualify you for residency.

In 2022 and onwards you can obtain a golden visa for the purchase of property for a value equal to or above €500,000 only in the regional autonomies of the Azores and Madeira, or in territories of the interior on the mainland.

So, if you want a shortcut to European residency that comes together with a beautiful house in your desired destination, you need to act fast.

If you have any questions as to how to acquire Portugal residency through buying a property, contact us.

Portugal D7 Residence Visa

This is the best route to residency in Portugal for retirees and people with stable investment income.

You need to have sufficient passive income to qualify for this type of via. The income can be received from pensions, property rentals, investments, dividends, etc.

You have to apply in the Portuguese consulate in your home country.

To qualify you need to:

  • Be a non-EU citizen.
  • Have enough funds to support yourself during your stay in Portugal. Official figures say your income should at least be equal to the annual minimum wage in Portugal (which is currently €7,620) for the main applicant, and 50% of the minimum wage for a spouse. However, that might not be enough to get your application approved. Aim at a minimum of €12,000 per year to be on the safe side.
  • Have a clean criminal record.
  • Show a residence address in Portugal.
  • Have valid health insurance.

The visa itself is permission to enter Portugal. With the visa, you can enter Portugal two times and remain there for a period of 4 months in total.

During the 4 months, you must apply for a residence permit in Portugal. The first permit is granted for one year. After that, it can be renewed for 2 years.

After 5 years of residing in Portugal, you can convert it into a permanent residence permit.

Is Portugal a good place to live?

The weather, the lifestyle and a lower cost of living are the main reasons behind Portugal’s growing popularity.

The country has a lot to offer: amazing and diverse nature and scenery,  opportunities for an active and healthy lifestyle, good connections to European cities, tax incentives, and much more. 

The pros and cons of living in Portugal

However, living in Portugal is not all roses. There are also some drawbacks, including wet and rainy winters, the cold waters of the Atlantic Ocean, a slow pace of life, etc.

Knowing both the positives and the negatives beforehand gives you a chance to weigh them against each other and decide if it’s the right country for you.

The pros of living in Portugal

This bit is really easy, isn’t it?  You can probably name a dozen or so positive changes to your life when you relocate to Portugal.

The main pros of living in Portugal are as follows:

1. Amazing golf

Portugal is arguably home to some of the best golf courses in Europe.

Living in Portugal
Portugal is a true golfers’ paradise

If you are passionate about golf, can afford your annual fees, and are committed to spending your life on the greens, then Portugal should be your number one choice. 

There are only 70 or so golf courses in the country, and the total number of golf club members is less than 20,000. But despite (or maybe thanks to) these modest numbers, the quality of the courses is very high and the country’s popularity as a top golfing destination has been steadily growing.

Whether you’re an experienced player or just a beginner, there’s a golf course in Portugal for everybody, with brilliant layouts where you can hone your skills, improve your game, and maybe even lower your handicap too.

2. The weather and climate are superb

However obvious this upside of living in Portugal is, we cannot skip over it. The great weather is very often a primary reason for people choosing Portugal, so we have to add at least a line or two in praise of the Portuguese sunshine.

It is certainly something in the nation’s favour – it is very diverse. As you head further south you’ll find hotter summers and more temperate winters.

If you like it seriously hot, head away from the Atlantic coastline towards the country’s beautiful interior; there you’ll find the summers are baking!

In warmer areas, such as the Guadiana river basin, summer highs reach over 45°C. In the north, on the other hand, snow is common in the winter, and temperatures can drop below −10.0 °C.

3. Brilliant surfing

Portugal has almost 500 miles (800 km) of coastline. Yet one of the lesser-known Portugal facts is just how good the country is as a surfing destination.

Indeed, Portugal is a surfer’s paradise. Knowledgeable people say the country boasts 364 days of surf.

If you are a devoted surfer or want to get into surfing, or your children and grandchildren love this kind of pastime – move to Portugal and take advantage of its fantastic surfing opportunities.

4. Lower property prices

The property market in Portugal is undervalued and among the most affordable in Europe. On the whole, housing is cheaper to buy there and investors can make more money from rentals than in many other European countries.

The price of property away from the resorts and coast will surprise you even more. You can bag bargains in some stunning inland towns and villages and still only be a short drive from major urban areas and beaches. 

It will mean looking at more traditional properties, rather than developed resort-style homes, but you can certainly find an affordable property if you hunt for it in Portugal.

5. Natural beauty

The coastline in Portugal is beautiful. The country lies on the Atlantic and is sometimes lashed by dramatic storms in the winter, and this has led to stunning rock and cliff formations on the coast. 

Living in Porugal
The Algarve coast

For walk lovers, it is one of the best countries in the world to explore on foot. In the summertime, the beautiful beaches all the way up the western edge of the nation offer plenty to explore and enjoy.

Away from the coast, Portugal is home to mountains and plains, national parks, lakes, olive groves and rivers – it is a geographically diverse and fabulous nation.

6. No stress lifestyle

The pace of life in Portugal is laid back, relaxed and unrushed.

It takes time to get used to it, but once you stop being annoyed at how long it takes for a simple task to be done, it is a dream come true.

Remember, there is nowhere to rush. Have a glass of port instead – it is such a healthier way to live.

7. Healthy food

Speaking about healthier living: nothing can be better for your health than Portuguese cuisine and eating habits.

Living in Portugal
Farmers’ markets are a joy for foodies – beautiful fresh produce at very affordable prices

The Portuguese are the biggest fish eaters per capita in Europe, and all kinds of fresh fish are available daily at the local markets. It explains the endless variety of seafood arriving in a traditional cataplana pan at your lunch table.

In addition, the abundance of sunshine in this part of the world means fruit and veg and other fresh produce is cheap and easily available.

8. Low crime

Portugal ranks as the 17th safest country in the world. Violent crime is rare, and petty crime is largely limited to street crime during the busy tourist season.

9. Low cost of living

The cost of living is among the lowest in Western Europe. In fact, it is on average 30 percent lower than any other country in the region.

Living in Portugal means you can easily afford the lifestyle you are used to for less money and squirrel away the rest to build up your family wealth. Or, if you fancy, you can afford a much fancier lifestyle for the same money you spend in the UK and indulge in luxuries you have always wanted to try.

10. A wealth of culture and heritage

Culturally, Portugal is a rich country.

There is everything there to satisfy the most demanding minds – music, theatre, opera, arts, architecture, numerous festivals and shows, museum exhibitions and cultural events all year round. It is simply impossible to get bored while living in Portugal.

The cons of living in Portugal

1. There is no rush to do anything

Remember the advantage of the slower pace of life that we mentioned earlier? Well, with this comes one of the biggest challenges every foreigner relocating to the Mediterranean has to face at some point.

Initially, for those coming from fast-paced and stressed out countries like the UK, it feels like a nightmare because it can take so long to do anything. 

Queues in banks can stretch for miles as the staff chat about anything and everything with their customers, and customers chat among themselves.

Two cars can stop on a narrow country road side by side, and the drivers will discuss their family affairs while other cars are waiting patiently behind them.

But there’s no point getting stressed out, just accept this is how your life is now. This is where the next point comes in: Fado Culture.

2. Portuguese fatalism or Fado culture

Those melancholic and mournful tunes of Fado music reflect the whole approach to life in Portugal – an attitude in music, literature and even the way the Portuguese speak.

Living in Portugal
Portugal traditional houses lining narrow village streets

It is characterized by melancholy, resignation and a belief in capricious fate. In short, don’t put up too much of a fight, as it’s probably wiser to go with the flow and submit to your fate.

The Portuguese say oxalá, meaning “hopefully/if only”, which is the very expression of Fado culture.

Living in Portugal means accepting Fado culture and enjoying what you have.

You can, of course, make plans and undertake some actions to implement them, but don’t overexert yourself or any local trades involved in your plans, and don’t worry too much – things will work out themselves, oxala!

3. The language is difficult to learn

The most difficult thing about Portugal is the language. It really is a very complicated and difficult language to learn and many people struggle to get much further than the basics and everyday pleasantries.

If you live in the more urban and populous areas where there are lots of expats, international citizens and professional Portuguese, you will find English is quite widely spoken. The Algarve, for example, is being anglicised rapidly thanks to international expats.

However, if you make an effort and do advance your language skills beyond a simple shopping routine, the reward will be immense – from great local respect and building local friendships to being accepted as a full member of the local community.

4. The red tape is maddening

The bureaucracy in Portugal is quite something else. There are reams of paperwork and hours of standing in queues just to achieve the most basic of tasks, and this can really grate. 

However, if you prepare yourself for this fact before you attempt to do anything – from taxing your car to getting a new bank account, for example – you will be fine.

5. Haphazard driving

The driving styles of the locals in Portugal will shock you at first. But as many expats will advise you wisely, “you will soon get used to it.” Watch out for your first month or so and don’t get stressed out, whatever happens.

Where do expats live in Portugal?

Expats’ most favourite locations in Portugal can be found in and around Lisbon. There are also a lot of expats living in Porto.

The Algarve is another favourite expat destination, of course, where there is a large community of British, Scandinavian, French, Brazilian and other expats. 

Living in Portugal
Traditional boats on the canal in Aveiro, Portugal.

If you want to take the road less travelled, you might want to consider living in the Azores or moving to Madeira.

Looking for a bit more character? You should definitely consider living in Coimbra then.

Cost of living in Portugal

Portugal is not the most expensive country in the world.

On average, life in Portugal is 34 percent cheaper than in the UK, including rent. That’s what makes it such a great retirement destination – you get all the perks for less money.

When it comes to buying a property in Portugal, the average cost across the country is cheaper than in the UK.

However, if you are looking at the favourite destinations for expats retiring to Portugal, which are mostly around Lisbon, Porto, and the Algarve, you will probably find that property prices are the highest there. 

For example, an average two-bedroom apartment on the Algarve coast costs at least two or three times as much as in central Porto. Still, for £300,000 you can buy a three-bed villa in a gated community, with access to a swimming pool and a five-minute walk to the beach. 

How much money do you need to live comfortably in Portugal?

If you are going to rent (which, initially, is a good idea) two people can live comfortably in Portugal starting from about £1,600 a month depending on the location.

The closer to Lisbon you want to live, the bigger your budget should be.

For example, a couple can live relatively comfortably in the Algarve for £1,700 a month including rent, occasional meals out, gym membership and other moderate luxuries. 

The same lifestyle in Cascais can cost closer to £3,000 including rent.

Housing takes, of course, the biggest part of the budget. That’s why, when you are confident of your chosen location, it’s wise to buy a property. Then your monthly cost of living in Portugal goes down drastically. 

Living in Portugal vs Spain

Is it the ‘Portugal or Spain’ dilemma you are facing? 

It may be a difficult choice if there are no prompts coming from your heart. Culturally and climate-wise the countries are almost equally rich and attractive. Infrastructure is on approximately the same level. 

Living in Portugal
Upriver from Porto, grapes harvested to make port wine are grown in terraced vineyards in the sun-drenched Douro Valley

So, Portugal or Spain? Here are the arguments that can help your head to decide:

  • Living in Portugal will cost less, as Portugal is more affordable than Spain. Be it accommodation, food, drinks or travelling, you will find Portugal remarkably affordable on the whole.
  • Spain is more accessible from other European destinations than Portugal. Also, it’s easier to travel from Spain all over Europe compared to Portugal.
  • However, due to its size, it’s much easier to travel all over Portugal, and the in-country connectivity there is more efficient.
  • Portugal is more homogeneous than Spain. Spain’s a mix and match of different nationalities and thus is more diverse and interesting.
  • State healthcare in Portugal comes with a moderate surcharge. In Spain, state healthcare is free at the point of use. 
  • In Portugal, movies and television programmes have English subtitles. In Spain, everything is dubbed. 
  • You might find it a bit easier to live in Portugal with little Portuguese than in Spain with little Spanish (excluding popular expat locations, of course).

Other than this, there is little difference between the two countries. If in doubt, it might be worth trying to live in both for some time and then decide on which one is your favourite. 

Retiring to Portugal from the UK

The benefits of retiring to Portugal can offer you, along with some essential points to consider when planning your retirement such as healthcare, your pension options, property and money matters. 

You should also consider one of the most attractive features of retiring to Portugal – namely how you can save a lot of money by living a low-tax life for the first ten years of your Portugal retirement. 

Is retiring to Portugal a good idea?

In recent years Portugal has moved into the top ten countries for retiring abroad, and it seems like it’ll stay there for some time to come.

Expatra isn’t the only publication to rank Portugal highly. From the 2017 Forbes’ list of the best countries for retiring abroad and the Live and Invest Overseas rating, to the International Living Index, all of these publications also acknowledge Portugal as one of the best places to retire overseas. 

It’s not only because of its climate and the fact that it’s a great value-for-money destination. It’s also because of the lifestyle Portugal can offer for retirees.

Portugal is a brilliant country for both an active or a more contemplative retirement.

Coastal locations are perfect for those who love all kinds of water sports; the country is full of wonderful walks; the scenery is amazing; and from the north to the south, the diversity of the landscape will reward a devoted explorer with the most stunning views.

It is the country that will make you want to try something new: take up photography, research wines in theory and in practice, try fishing or learn to play the guitar.

In short, it is a truly inspirational place where it is easy to keep your mind and body healthy and engaged.

How easy is it to retire to Portugal?

If you are an EU citizen, retiring to Portugal is very simple: you need to go through a residency application (which is more a formality), and that’s it.

If you are a non-EU citizen (including US and UK citizens), there’s more bureaucracy to go through. 

However, even in such a case establishing permanent residency is relatively easy, and even quicker with a Golden Visa, which requires an investment.

Is healthcare free in Portugal?

Portugal has a well-developed state healthcare system, however, the services are not totally free. The state covers the biggest part of all the healthcare expenses, and you as a patient will only need to contribute a small fee every time you go to see a doctor. These fees are known as ‘taxas moderadoras’.

Not all the people must pay ‘taxas moderadoras’, there is a long list of those who are exempt. And even if you do have to pay them, the fees are very affordable.

How much does it cost to see a doctor in Portugal?

All legal residents in Portugal are covered by the national health service, so all you will pay will be a small fee for appointments and procedures. Some residents qualify for discounted or completely free healthcare. 

The fees are really minimal. As an example, a consultation with an SNS (national healthcare) doctor will cost about €5. 

If you go privately, this can cost you from €40.

Can I work remotely in Portugal?

Working remotely from Portugal either as an employee of a non-Portuguese company or as a contractor/freelancer is not specified or clearly regulated in Portugal’s immigration laws. 

The major questions here are taxation issues and – if you are an employee – how your company looks at the matter.

In terms of legalities, if you’re a freelancer and you can work from anywhere and support yourself, the best way to move to Portugal will be through Portugal’s D7 Visa & Residence Permit.

The D7 is aimed at self-sufficient people with various incomes derived from investments, pensions, and/or businesses they run.

This is also the visa of choice for remote workers, freelancers, or entrepreneurs. As long as you can show that you will be bringing your income to Portugal and this income is enough for you to be eligible, you can apply for the D7. 

The minimum income you need to show is the equivalent of Portuguese minimum wage a month. However, depending on where in Portugal you want to live, you will need more than this. 

Living in Portugal
Wooden walkways along the Aveiro river let you enjoy the most stunning mountain views in the world

Personal banking and bank accounts in Portugal for expats

You might want to open a bank account in Portugal before you move there. It can help you save money on charges for transactions abroad from your bank.  

Opening a resident account in Portugal

Personal bank accounts in Portugal are not always free. Many current accounts have an admin charge of about €5 per month or so. You will also have to pay small fees for replacement of debit cards or counter withdrawals. 

For that, you will get an assigned manager and have a direct line and mobile number. Whenever something happens that requires help, you can talk to them on the phone or go into your local branch and talk to them in person. 

Documents needed to open a bank account in Portugal

To open a Portuguese bank account, you will need the following:

  • your passport;
  • your NIF (a Portuguese fiscal number which you can obtain at the local Financas);
  • proof of income;
  • proof of your Portuguese address;
  • a mobile phone number with activated SMS.

Can I open a bank account in Portugal if I am not a resident? 

  • Yes, for this you should apply for a non-resident bank account 

There might be circumstances when you need to have a Portuguese bank account before you apply for residency. This is what you can do to obtain a Portuguese bank account before you move to Portugal:

Some Portuguese banks offer this option. Banks such ActivoBank and Banco CTT offer excellent services, which include no monthly fees and being free to use in the eurozone. 

You have to be in the country to open a non-resident account, as it involves first obtaining a NIF (Número de Identificação Fiscal). You can get it from the nearest Finanças by providing your ID and proof of address (a recent bank statement that lists your non-Portuguese address will do perfectly well).

With your freshly obtained NIF, proof of address and proof of income that states your profession or job title, you can apply for a non-resident bank account.

If you already have your NIF, both ActivoBank and Banco CTT  (and a number of the Portuguese banks) offer an online application that involves a video chat with a bank representative to confirm your identity. 

How to open a bank account in Portugal online – a mobile-only bank account

You can opt for a mobile-only bank account. They are very easy to set up. The most popular mobile-only bank accounts are Borderless Account from TransferWise, DiPocket, Revolut, LeuPay, N26.

With most of them, you can set up a bank account with a Portuguese IBAN on your mobile phone in minutes. You will need a smartphone and some valid ID, which will allow you to verify your identity either through a quick video call or with photos.

Do I have to pay taxes in Portugal?

If you spend more than 183 days in Portugal, you become a tax resident and, legally, you should now file a tax return and pay your taxes in Portugal.

To register as a tax resident in Portugal, you first have to visit the town hall where you live and demonstrate that you have adequate financial means and social security to cover yourself. You then visit the local tax office and register as a tax resident.

How much tax do I pay in Portugal?

There is a progressive rate of income taxation in Portugal, starting at 14.5 percent for earnings up to EUR 7,035 and rising to 48 percent on earnings above EUR 80,000. 

There’s a special taxation regime NHR for expat retirees in Portugal, under which you can pay a flat rate of 10% for the first ten years of living in Portugal.

Apart from that, the scheme offers a lower income tax rate of 20% if you’re employed in Portugal in a ‘high value’ activity such as a software engineer, for example. 

Wealth tax in Portugal

Portugal’s wealth tax is essentially an extension of Portugal’s Imposto sobre Imóveis (IMI), or property tax.

You will normally pay 0.3% for your Portuguese property if it’s worth more than EUR 600,000. If you are married or in a civil partnership, you as a couple will be granted a combined threshold of €1.2m.

Property in Portugal: should you rent or buy?

It’s definitely worth renting first to make sure your chosen area in Portugal meets your expectations. Renting will also allow you time to learn more about the local property market and its peculiarities.

If you are planning to live in regions famous for seasonal tourism, such as the Algarve, it might be difficult to find a good property for long-term rent as landlords prefer to let their properties short-term to holiday-makers.

You might also find that short-term rentals in such regions are quite costly. Property owners can make a healthy profit during the tourist season and don’t mind leaving their properties empty during winter. 

In the main cities, such as Lisbon and Porto, long-term rentals are relatively easy to come by.

You can look for a rental property yourself or use a local agent. Good agents can help you by advising, negotiating with landowners, and will even providing a tenancy agreement in English.

To rent a property in Portugal you will need a Portuguese fiscal number.

You will usually be asked for the equivalent of two months’ rent as a security deposit before moving in.

When you decide you are ready to buy your own home in Portugal, make sure you enlist the help of a reputable estate agent and have proper legal representation.

Final thoughts on living in Portugal

Portugal seems to have found the right recipe for becoming an attractive expat destination. It offers exactly what all expats are looking for when deciding to move: good climate, great quality of life combined with a lower cost of living, and, a cherry on top of the cake, tax advantages. 

This is exactly what you can get living in Portugal as an expat. Even if you are not quite qualified for the tax advantages, all the rest combined is a powerful enough mix to make Portugal a great destination to live in. 

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