Essential Tips for Successfully Living in Portugal

Portugal continues to be one of the most famous holiday destinations in Europe. It is a beautiful country with vibrant cities, a long and breathtaking coastline, and an amazing history. But what about those who choose to make Portugal their new home? When moving abroad to live, there’s a lot to consider. You may already have a good idea of what you’re looking for, or you might just be testing the waters. Regardless of where you are in your journey, in this article we will provide everything you need to know about what life is like in Portugal as an Expat!

Table of Contents

• Portugal, Expats Happy Place: A Summary
• Cost of Living
• Healthcare Options for Expats
• Transportation
• Taxes
• Best Places to Live in Portugal
• So, What Next? 

Portugal, Expats Happy Place: A Summary

Portugal is continuously one of the most popular Expat destinations in the whole world and surveys show that Expat satisfaction is always very high. The reality is that it’s not hard to see why!

Location

Portugal is on the South-Western tip of Europe and is a relatively small country – about the same size as the state of Indiana in the USA. In addition to mainland Portugal, there are two archipelagos that are part of the nation. The Azores is to the West of Portugal in the Atlantic Ocean, and Madeira is off the coast of Morocco. Its location and size make it the perfect gateway into the rest of the continent. Portugal has frequent and fairly well-priced flights from the USA and the UK and extensive links into the rest of the countries in Europe! 

Climate

Portugal is also Europe’s sunniest country! Expect mild winters and balmy summers as standard throughout the country. The Mediterranean to the south provides the perfect summer getaway with some of the best beaches in the world along the jagged Algarve coastline. Beautiful beach towns include Cascais, Tavira, Albufeira, and Moledo. The Atlantic coast on the West of the country is also a very famous surf area with Nazaré home to some of the biggest waves on the planet! For beginners, there are many surfing schools to get you started on something a little more manageable. You can also find some beautiful high mountain ranges in the North of the country. The famous peaks of the Pyrenees form the border of Portugal and Spain and get some brilliant snowfall in the winters if you are looking for some cooler adventuring. Skiing, hiking, mountain biking and climbing are all popular options in this part of the world!

Sport 

Despite the huge variety in sports available, the most popular sport in Portugal by a long way is football – or soccer for those in the States! Football is a part of daily life and everywhere you go you will see pitches, stadiums and children kicking a ball down the cobblestones. Another popular sport in Portugal is golf. Its golf courses are considered some of the best in the world. Between 2014 and 2018, the World Golf Awards ranked Portugal the Best Golf Destination in the World every year. The most popular courses are located in Algarve, Cascais, and around Lisbon.

Culture

Portugal is also one of Europe’s cultural centers, and it is not just the large cities; you’ll find treasures in even the smallest towns. The people also celebrate colorful festivals and traditional celebrations throughout the year. Sometimes it feels like every weekend is a party that includes Expats and locals alike. There is a real passion for keeping history and culture alive for future generations, so whether it’s music festivals in Disney looking castles or food markets in a spray-painted outdoor gallery, Portugal really does have all of your cultural needs covered!

The predominant religion in Portugal is Catholicism, with over 80% of the population registered as Catholic on the census. However, all faiths are represented, particularly in the larger cities and towns. And while religion does play a part in many people’s lives, there is a formal separation of church and state. Freedom of religion is firmly held in Portugal. Portugal also has a relatively low crime rate. Non-violent street crime, such as petty theft and pick-pocketing, can occur in certain areas, such as tourist locations, beaches, and transport hubs.

Food

One of the highlights of living in Portugal is the food. Portuguese cuisine combines Mediterranean, Atlantic, African, Asian, and Brazilian cuisine. 

Portuguese cuisine is famous around the world. Seafood, peri-peri chicken and BBQ meat are all celebrated staples. The bakeries and desserts are also some of the finest in the world. Keep an eye out for any local delicacies as these are different in every region and are often unique and delicious! Restaurants range from top-end Michelin star extravaganzas to family-run tavernas. But, the welcome and the food will be consistently good. Portuguese supermarkets do also stock a surprising amount of favorites from the USA and UK and there are specialist Expat stores for when you crave a taste of home!

Overall, Portugal really is a country that has everything! It has a beautiful and diverse climate, an incredible culinary tradition, easy access to activities and recreations and to top it all off, the Portuguese are known as being some of the friendliest people in the world! 

Now that you understand the bigger picture – let’s get down to some of the nuts and bolts of life in this jewel of a country!

Cost of Living

Cost Comparison

Immigrating to Portugal allows you to have a lower cost of living relative to your quality of life than you would elsewhere. This is true even in the cities of Lisbon and Porto – Portugal’s two largest cities. In general, living costs for Expats in Portugal are much cheaper than the equivalent life in the USA, Australia, and Scandinavia. Portugal’s cost-of-living also compares favorably to EU countries like Germany, France, and the Netherlands in Western Europe.

The per diem rate that the US State department pays its staff to cover daily living expenses highlights this. Portugal’s per diem is less than a third of the rate in Bermuda and half of that of countries like France and Switzerland.

Portugal’s cost of living will vary depending on how you live and where you live. But, you can guarantee a cheaper like-for-like lifestyle than most developed countries. And many who retire to Portugal find that modest savings and pension payments cover an excellent quality of life in Portugal.

Rent and Utilities

Rental costs are also cheaper than in many other European countries. Lisbon is much cheaper relative to London, Copenhagen, or even Madrid.

Rental cost depends on the location, the size, and the facilities of the property. Rent is relatively higher in densely populated areas like Lisbon or Expat’s favorite Cascais. A fancy apartment with sea views will always be more expensive than a small rural cottage. You will pay less inland or in less-populated areas like Braga.

Utilities, including electricity and water, are relatively high in Portugal compared to the cost of your rent. You can expect to spend at least €100 a month on these bills. Utilities aren’t usually included in the rental price, but you can negotiate this point with the landlord.

Healthcare Options for Expats

There are three aspects to the healthcare system in Portugal:

• Serviço Nacional de Saùde (SNS).
• Special social programs of health insurance for certain professions.
• Private, voluntary health insurance.

General practitioners and family doctors in primary healthcare centers are the principal carriers of primary health services. As a resident of Portugal, you have access to the SNS. This system works on fixed fees for services (taxas moderadoras), which means you pay for each doctor’s appointment and prescription. These fees are waived for anyone under 18 or over 65. The SNS does not cover dental.Your general practitioner (GP) also serves as the gatekeeper to secondary health services since there is no direct access to specialists. Hospitals carry out secondary and tertiary care and offer specialist ambulatory care. The SNS has a 24-hour contact service, which allows citizens convenient and simple access to health information and services.

Care is cheap, accessible, and world-class. Both the healthcare professionals and facilities in Portugal are of a high standard. But, there are some clear advantages to having private health coverage. You have flexibility in choosing care providers, and you can avoid wait times in many cases.

You can get very reasonable healthcare insurance to cover access to the private system if you prefer that model. See our guide to choosing the right expat health insurance for more information, or get two quotes for comparison here.

READ ALSO: Retire in Portugal >> The Pros, Cons, and Everything in Between

Transportation

Transport in Portugal is easy, accessible, and often very affordable. 

Air

Portugal has excellent international air travel routes. The Humberto Delgado Airport is just 7 km from the center of Lisbon and has direct flights to the USA, mainland Europe, Asia, and beyond. The national carrier, TAP covers many destinations around the world, and Lisbon is also a regular stop for many low-cost airlines in Europe and the United Kingdom.

Flight times from Lisbon to New York are between seven and eight hours and a flight to London is around three hours. There are also international airports in Faro (Algarve) and Porto (Maia) that serve mainland Europe and beyond. 

Airports on Madeira and the Azores mainly handle traffic from the Portuguese mainland. There are also numerous smaller airports including, Cascais, Beja, and Avereio, among others.

Trains

Portugal’s railway system, or the Comboios de Portugal, has wide coverage both within the country and further afield. Its routes connect Lisbon and Porto, and coastal and inland towns in the North and South. The price of tickets is also affordable, and discounts are available.

There are six main types of trains in Portugal. Each has different routes and features. There are also trains that connect to other train systems.

• Regional (R).
• InterRegional (IR).
• InterCity or InterCidades (IC).
• Alfa Pendular (AP).
• Fertagus (FERT).
• Celta (CEL).

Buses

Buses can also be an easy way to travel around Portugal. Different buses have routes towards the Northern regions and the Southern regions.

Here are Portugal’s major bus companies that can help you travel to different destinations, from Vila Real to the Algarve.

• Rede Expressos, including Citiexpress.
• Rodonorte.
• EVA Transportes.
• Renex.
• Frota Azul.

Metro

Portugal has two metro systems, in Lisbon and in Porto.

The Metro Lisboa has fifty-six stations and four lines. It opens at 6 a.m. and closes at 1:00 a.m the following day. A single ticket costs €1.50 while a whole-day ticket costs €6.40. You can also purchase a monthly support card, so you don’t have to buy a ticket every time you ride the metro.

The Metro do Porto is Porto’s metro system. It has eighty-one stations and six lines. The metro’s operating time is from 6:00 a.m. to 1:00 a.m. . You can purchase a single journey ticket for as low as €1.20 and a one-day ticket for €4.15. You can also buy a monthly pass for either €30 or €40, depending on the line you choose.

Private Cars

For Expats in Portugal, owning or hiring a car is another solution to your transport needs, particularly if you live in rural areas.

Portugal has upgraded its roads over the years, resulting in a better motorway network and greater access throughout the country.

Some driving violations, together with the penalties, are as follows.

• Undertaking or Overtaking on the right – €1000.
• Driving Under the Influence (DUI) – €1250 plus confiscation of driving license for up to one year. If you have high blood alcohol content, you are subject to a doubled fine and a prolonged ban on driving or imprisonment.
• Speeding – ranges from €300 to €2,500.

The speed limit in Portugal depends on the area.

• Built-up areas: 50 km/h.
• Rural roads: 90 km/h.
• Motorways: 50-120 km/h.

Driving License Rules

When you first move to Portugal, you can drive on your existing driving license. By the time you have been resident for six months, you must exchange your driving license for a local one. This grace period is extended to two years if you hold an EU driving license. When exchanging your license, you will need to provide a summary of your driving record from your home state. You also need a doctor’s certificate stating that you are fit to drive.

When your driving license expires, you will need to take a driving test in Portugal. This is not as straightforward as signing up for a test. You need to complete a driving course at a registered training center before taking the test. The test itself comprises theoretical, technical, and practical components, and you can have the help of a translator if you need it.

Taxes 

Being an Expat in Portugal means you also have to comply with the finance and tax regulations in the country. However, Portugal has tax treaties with many countries, so you won’t have to pay tax twice (this includes the USA and UK.)

Non-habitual resident (NHR) tax rate

Important Update on the NHR:

António Costa, Portugal’s Prime Minister, unexpectedly revealed during a television interview on October 2, 2023, that the Non-Habitual Resident (NHR) tax program will cease to accept new participants in 2024.

Key things to know:

1. Existing participants will keep their NHR status for the entire ten years.
2. We believe that all qualifying residence permits granted before December 31, 2023, may qualify for the program.
3. People already living in Portugal who apply for NHR before December 31, 2023, should still be accepted if they are eligible for the program.

NHR Details:

Expats can register as a non-habitual resident (NHR) for taxation. You can have all non-Portuguese 100% tax-free for ten years. So, anything you earn from outside Portugal, you get to keep. Freelancers, remote workers, crypto traders, and many more benefit from the effective NHR scheme. The lower tax burden under the NHR scheme changes the financial viability for many people living in Portugal.

And, there is a flat rate of 20% in respect of employment income and self-employment income.

Standard Income Tax

Standard income tax rates vary from 13.25% to 48%. The rate applied to a resident’s worldwide income depends on the amount they earned in the taxable period.

Filing and Payment of Income Tax Returns

Portugal’s tax year is from 1 January to 31 December (like most EU countries). Income tax returns (ITRs) are due the following spring. You can complete these online or in paper form. The penalties for late returns range from €200 to €2,500.

If you’re unsure of the amount of income tax you are liable to pay, you can use the Portuguese government’s income tax calculator.

Other Taxes

Value-Added Tax

Portugal has three VAT rates for its goods and services.

• 23% standard rate (22% in the Autonomous Region of Madeira and 16% in the Autonomous Region of the Azores).
• 13% intermediate rate (12% in Madeira and 9% in the Azores).
• 6% reduced rate (5% in Madeira and 4% in the Azores).

Capital Gains Tax

Portugal’s general rule on capital gains tax states that capital gains are taxable at a flat rate of 28%.

Pension and Social Security

There is a state pension in Portugal for those who have paid social security contributions in Portugal.

EU citizens can elect to transfer their state pension to the Portuguese system when they are living in Portugal. You’ll need to decide on the best and most tax-efficient way to manage your pension.

For non-EU citizens, you’ll need to find out how to get your pension or social security paid to you in Portugal. You can have UK state pension or and USA social security payments made directly to you in Portugal.

READ ALSO: Moving to Portugal: Your Complete Relocation Guide

Best Place To Live in Portugal

When it comes to the best place to live in Portugal, there are a lot of contenders! Whether you’re after the busy city life or access to the beautiful coastline, here are our top picks.

Best Cities in Portugal

Lisbon: The Portuguese capital has a beautiful historic center with cobblestone streets, hilly landscapes, and ancient ruins, all a stone’s throw from the beach! As well as being a hub for business, the city has some of the best schools. It’s no surprise that so many Expats living in Portugal choose the capital as a new home.

Porto: Located 300 km North of Lisbon, Porto is Portugal’s second-largest city. It is the home of port wine and boasts colorful streets and incredible views. Porto is a cheaper option to Lisbon but that doesn’t mean you get less. You will find a range of beautiful restaurants, cafés, and attractions in this city. Aside from being affordable, healthcare is excellent, and its people’s hospitality is remarkable.

Portimao: Golden beaches, a dramatic coastline, and splendid scenery are some perks that Portimao promises its people. This beautiful city is on the south coast, in the Algarve region. It has a large Expat community and is a popular retirement choice. It also has an airport that flies to different cities within Portugal.

Best Picks Outside The Big Cities

Braga: This diverse town in the north of Portugal is famous for its lively nightlife. It is also the site of one of the country’s oldest cathedrals. Located on the Spanish border, you are minutes away from the mountains and minutes away from the beach!

Ericeira: Just north of Lisbon, this small seaside town is ideal for surfing enthusiasts. Fresh seafood is always on the menu, and the beaches are perfect for sunbathing and swimming.

Alentejo: If breaking away from the crowd is what you want, the province of Alentejo is a popular choice. This rural region is set in the south of Portugal and is rich in historical sites.

Ponta Delgada: If you’re prepared to forego mainland Portugal to get away from the tourists, Ponta Delgada could be for you. As the capital of the Azores archipelago, you have all the facilities while enjoying a lower cost of living than in Lisbon.

Madeira: Portugal’s other island offering is the perfect haven for nature lovers, where vegetation and blue ocean scenic views meet. Madeira offers a richness of flora and fauna without chaotic traffic!

So, what next?

The first step is understanding the best visa route for you and your family. Our moving to Portugal guide outlines all of the visas available to you. Have a read of the article, and if you are still unsure of the visa route and process, we recommend you book a consultation with our preferred Immigration Lawyers in Lisbon. Where Can I Live clients can book a 30-minute conversation (€57) where they will clarify:

• The easiest visa route for you and your family, depending on your situation.
• The requirements, steps, and timeline for the visa.
• A quote for helping you to get the visa.

Portugal’s bureaucracy and immigration system can be complicated to navigate. And, your English won’t always help you as much of the application process requires Portuguese. Book your 30-minute consultation below and start your new life in Portugal!