Do you want an affordable European lifestyle for your retirement? Make the choice that has worked for so many: Retire to Portugal. You get quality of life, a wonderful climate, a lower cost of living, and excellent infrastructure and support. Join us and explore how to retire in Portugal and the best places for a Portuguese retirement.
- How to Retire in Portugal: EU Citizens vs. Non-EU Citizens
- Pensions When Retiring In Portugal
- Retirees and Taxation
- Best Places to Retire in Portugal
- Should you retire in Portugal or Spain?
- The next step to Retire in Portugal?
How to Retire in Portugal: EU Citizens vs. Non-EU Citizens
The requirements for retiring in Portugal depend on your citizenship. If you have dual citizenship, you can use the nationality most beneficial for your application.
We have written a full guide on How to Move to Portugal. We’ll cover much more than just immigration permits. You’ll learn how to find a place to live, moving your things, health, and what you need to do when you arrive.
Retiring in Portugal is easy for many. Citizens of the European Union (EU), the European Economic Area (EEA), and Switzerland have easy access. You don’t need a visa, but you will need to register for residency in Portugal.
EU citizens can register in Portugal at any Immigration and Borders Service (SEF) office.
Remember that UK citizens no longer qualify as a result of BREXIT. If you are a UK passport holder, you’ll need to apply for a visa and residence permit (see the non-EU citizen section below).
If you are a non-EU citizen who wants to retire in Portugal, you must apply for a visa. This includes UK citizens since the ratification of BREXIT.
Two visa options are most commonly used for retirement in Portugal.
There are pros and cons for each, depending on your Portuguese retirement plans.
D7 Visa for Passive Income to Retire in Portugal
Portugal’s Retirement Visa (D7 passive income visa) is available to non-EU, non-EEA, or non-Swiss citizens who want to live in Portugal. To qualify, you must be able to meet a minimum annual income threshold. The official amount is €7,200, but our experienced partner recommends at least €12,000 for the primary applicant. Fo
An applicant’s source of income can be from pensions, trust fund distributions, share dividends, and other regular investment income. The income must be stable and continuous during the validity of the residence visa.
To apply for the D7 visa, you have to submit your application to the Portuguese embassy in your country. You will receive a four-month temporary residence permit along with an appointment date with the SEF.
At your SEF appointment, you will need:
- Proof of accommodation.
- Proof of health insurance.
- Permit a police check both in your home country and in Portugal.
The D7 visa is valid for two years, and you can then renew the visa every three years.
This visa is perfect if you:
- Have a steady income.
- Plan on being based in Portugal for at least six months per year.
- Want to rent a property to live in.
Golden Visa for Investment to Retire in Portugal
Another option available for Expats who want to retire in Portugal is the Portugal Golden Visa. It is an investment visa granted to individuals who invested in Portugal’s economy through either property investment, capital investment, or labor investment.
You can make investments in:
- Real estate (both residential and commercial property)
- Capital Investment
- Investment in a Portuguese company
The minimum investment is €250,000 (for specific arts and entertainment investments). However, the most popular real estate investment minimums range from €250,000 to €500,000, depending on the area and age of the property.
Proposed changes in Portugal’s investment visa scheme will come into effect starting January 1, 2022. These changes affect the minimum investment in real estate and capital transfers and will limit where investors can purchase qualifying residential property.
This immigration program is a good option if you:
- Plan on making a significant investment in Portugal (including buying a home.)
- Want the flexibility to come and go from Portugal as you please.
To find out if this is your best option for retiring in Portugal, please see our comprehensive guide to Portugal’s Golden Visa.
Route to Citizenship
Portugal allows dual citizenship, so there’s no need to relinquish your original nationality.
Find out more about how to get Portuguese citizenship and your EU passport in our guide. We cover the language test and other requirements.
Sephardi Jews and Portuguese Citizenship
In 2015, amendments to Portugal’s Law on Nationality allowed citizenship for Sephardi Jews. Applicants must prove their Portuguese Sephardic ancestry and must provide all necessary documentation. This program is popular with applicants from around the world, especially since Spain has suspended its program.
Pensions When Retiring In Portugal
The retirement age in Portugal is sixty-six for both men and women. To qualify for the old-age pension through the Portuguese state system, you must have made at least fifteen years of Social Security contributions.
Of course, when looking to retire in Portugal, your pension contributions were in the country you worked and not in Portugal. In this case, whether you can claim the state pension in Portugal depends on whether your contributions are valid in Portugal.
EU Citizens who wish to retire in Portugal can transfer their state pension contributions to Portugal from the country they worked in. These transferred contributions will count toward their Portuguese state pension.
Meanwhile, non-EU citizens must check their state pension service if the transfer of pension is possible. Many non-EU countries have tax and social security agreements with Portugal, and this makes the process easier.
Retirees and Taxation
Taxation is an important question when choosing where to retire. Different countries have different rules for taxation of Expats — and taxation of pensioners. It’s vital to have a grasp of how much of your money will stay in your pocket.
We always recommend speaking to an expert in cross-border taxation before deciding to retire abroad. While a move could mean much more money in your pocket, you’ll need to make sure you structure your tax effectively.
Click here for more details on how to emigrate to Portugal.
Tax for Non-Habitual Residents
Residents in Portugal are subject to tax on their worldwide income. This ruling means that your international pension could be subject to tax while you live in Portugal. However, you can reduce the tax by registering as a non-habitual resident (NHR).
As an Expat, you can apply for non-habitual resident (NHR) status. This makes your income from non-Portuguese sources tax-exempt. If you qualify for NHR status, only your professional income from Portuguese sources is subject to tax, at a flat rate of twenty percent. This scheme is valid for a period of ten years.
There is no inheritance tax in Portugal: the tax relates to the home country of the deceased person. This ruling means that your estate is exempt from tax in Portugal but may be payable in your home country. There is stamp duty with a flat rate of ten percent.
Best Places to Retire in Portugal
Retirees choose Portugal because of its pleasant climate, relatively low cost of living, and safety. While there are Expat retirees all over the country, some locations are very popular with international retirees.
Although renting is certainly popular, foreigners can legally buy and own property in Portugal. This path is a great route to getting residency through the Golden Visa. However, the program changes in 2022, and some of these areas will no longer be eligible.
Here we take a look at the best places to retire in Portugal.
We also have a comprehensive article for Expats Living in Portugal. What to expect, and what life is really like in the country. We also cover the best places to live in Portugal in some depth. While there are many similarities to this list, there are some differences.
Lisbon is the capital city of Portugal. It has a lot of Expat communities, making it an ideal place for settlement.
Popular tourist spots are plentiful, and traveling is easy with its metro system. You can find a lot of restaurants, bars, and leisure facilities. This city highlights the Portuguese lifestyle with its landmarks and food.
One thing to note when considering Lisbon is higher rental costs compared to other parts of the country. The difference in prices are due to the popularity and population of the capital.
Just outside Lisbon, this seaside region is popular with both local and Expat retirees. And, many living in Lisbon have a second home here. Because of this, property prices can be higher than in other areas, but the facilities are exceptional.
Considered Portugal’s second-largest city, Porto has a large Expat community and is rich in culture and entertainment. Because of this, it received UNESCO Heritage site status in 1996.
Property prices in Porto depend on the location, and they are lower outside the city center. The city has a wide variety of properties to choose from, from apartments to family homes.
Porto has an international airport with flights to the UK and other European capitals.
This southern coastal region in Portugal is the main attraction for Expats. It has splendid beaches, a warm sea, and a mild climate. The Algarve features an abundance of golf courses that attract retirees in particular. While the Algarve is definitely Portuguese, you’ll find more than one English and Irish pub here! There are also direct flights to the UK and European countries from Faro airport.
Rents in the Algarve region depend on the location, but generally, its prices are lower than those of Lisbon. Its cost of living is also lower compared to that of big cities.
The Alentejo region of Portugal is vast, a full 33% of the area of mainland Portugal. However, it is home to just 7% of the population. It also has some beautiful natural parks and wide-open spaces. There is less infrastructure, and the area is less popular with retirees looking for active Expat communities.
Located in the northern part of Portugal, Braga is the country’s oldest city and the third-largest after Lisbon and Porto. Here you can find hundreds of cafés showcasing Portuguese cuisine in city squares, as well as old churches such as the Braga Cathedral.
Braga offers a variety of properties, from modern to historic. Prices vary according to location and facilities. For instance, properties located in Braga’s outskirts have lower prices than those found in the center.
Also known as Portugal’s Venice, Aveiro sits at the center of Portugal. Modernization has changed the city, but it still keeps its traditional flair with its canals, architecture, and moliceiros.
Tourists don’t go to Aveiro that much, making the city an ideal place for Expat settlement. Rents in Aveiro vary according to the size and facilities, and you can find an apartment to rent for as low as €450.
The tranquil islands of Madeira appeal to many. It is a ninety-minute flight from mainland Portugal but has a strong cultural link. The weather is excellent (making it a popular winter destination), and living costs are affordable. There are also good facilities, including healthcare, especially in the capital, Funchal.
The Azores is a North Atlantic archipelago of islands. Dramatic landscapes and natural beauty are the big appeals here, as even the biggest city of Ponta Delgada is relatively quiet.
Should you retire in Portugal or Spain?
If you’re thinking of retiring to the Iberian Peninsula, you might find yourself choosing between retiring in Spain or Portugal. Here is our run-down of the main differences between the two.
Cost of Living
If you’re looking for more affordable living, Portugal is the choice for you. The country has a lower cost of living than other nearby countries, including Spain.
Spain plans to reduce tax competition between its Autonomous Regions through a minimum tax. This program will harmonize the inheritance, gift, and wealth taxes.
On the other hand, Portugal’s Golden Visa and D7 Visa programs allow Expats the right to become non-habitual residents (NHR). This status allows them to be tax-exempt on income from outside Portugal for ten years.
Both countries provide free or cheap public healthcare for qualifying residents. Both also have excellent healthcare services (as recognized in Euro Health Consumer Indices) and low prices for care.
Spain’s healthcare system comprises primary healthcare and specialized healthcare. Primary healthcare handles basic care for the population, while specialized care relates to hospitals and referral centers.
Portugal’s healthcare system has three co-existing systems: the SNS, the dedicated social programs of health insurance for certain professions, and private, voluntary health insurance. If you get residency in Portugal, you qualify for the SNS. This service gives access to basic healthcare at fixed standard fees or free of charge for anyone under 18 and over 65.
Overall, both countries are safe. In Spain, violent crime is rare, but petty crime and property crime have risen in recent times.
Many Portuguese people speak excellent English. As in many places, young people and tourist areas have the highest concentrations. However, you’ll be surprised at how often you will encounter excellent English in Portugal.
The EF English Proficiency report ranks Portugal 7th in the world and gives it a Very High rating. Interestingly, this high ranking is a result of a recent effort to build capability. In 2014 Portugal was ranked at 21st place with a Moderate rating – great progress in just seven years.
While we still recommend learning some Portuguese to anyone looking to live in Portugal, it isn’t as urgent as in Spain.
The next step to Retire in Portugal?
Portugal is an excellent choice for Expat Retirees who want to live the European lifestyle they’ve been dreaming of. Retiring in Portugal is a perfect mix of the good life at a reasonable cost.
However, the red-tape for visas and residency can be challenging. If you’d like help, our fantastic Portugal immigration lawyer provides excellent value and first-class service.