NHR closed to most new applicants in early 2025, and the agency now handling your visa and residency, AIMA, is still working through a backlog that can push processing to 18 months. If you’re planning a move to Portugal in 2026, those two facts change your numbers more than anything else you’ll read about the country.
You’ll still find the things that made Portugal popular: high safety, high English proficiency, a slower pace of life. But rent in Lisbon’s city center has risen enough that “cheap European retirement” no longer applies to the capital, and the tax break that used to make retirement math easy has been replaced by something far narrower.
This guide walks through what IFICI actually covers, what D7 and D8 visas require in 2026, and where your money goes further if Lisbon doesn’t fit your budget.
Why people still move here
Portugal ranks 6th globally for English proficiency, ahead of most of Western Europe. You can open a bank account, see a doctor, or argue with a landlord without needing fluent Portuguese, at least in Lisbon, Porto, and the Algarve.
The country also ranks 7th on the Global Peace Index, one of the highest scores in the world. Violent crime is rare. Petty theft in tourist areas is the main concern most residents actually deal with.
Beyond the numbers, people who move here consistently point to the same thing: life moves slower, and nobody asks what you do for a living before they ask about your family. That’s not a sales pitch. It’s the actual reason retention among expats here tends to be high. You can read more about what daily life actually looks like in our guide to living in Portugal.
The tax reality: NHR is gone, here’s what replaced it
The NHR tax regime that made Portugal famous for retirees closed to new applicants in 2025. If you move here now, you will not get the 10% flat rate on foreign pensions that NHR offered.
What replaced it is called IFICI. It took effect January 1, 2024, and it is much narrower than NHR ever was. IFICI offers a 20% flat tax, but only to qualifying professionals in specific fields: scientific research, technology, engineering, and similar high-skill sectors. It does not cover pensions or general investment income. If you’re retiring on a pension or investment portfolio, IFICI will not apply to you.
For most people moving to Portugal in 2026, that means standard progressive tax rates. Portugal has nine brackets ranging from about 13% to 48%. The top rate of 48% applies to income above €81,199. On top of that, a solidarity surcharge adds 2.5% on income between €80,000 and €250,000, and 5% above that.
Run your own numbers before you move. A retiree with significant pension income who assumed a 10% tax rate under the old NHR system will find a very different number under standard rates. This isn’t a reason to cancel your plans. It’s a reason to get an actual tax projection from someone who knows Portuguese tax law before you commit to a lease.
Visas and AIMA: what it actually takes to get in
Portugal’s immigration agency, AIMA, replaced the old SEF system in 2023 and inherited a large backlog. Processing times vary sharply by visa type.
For the D7 visa, built for people with passive income like pensions, dividends, or rental income, you need to show at least €920 per month, or €11,040 per year, plus proof of comparable savings. That threshold rises for family members: about 50% more for a spouse, 30% more per child.
For the D8 visa, aimed at remote workers and freelancers, the income requirement is higher: €3,680 per month, tied to four times the Portuguese minimum wage.
Realistic AIMA timelines for D7 and D8 applications run 3 to 6 months from a complete application to a residence permit. Golden Visa applicants face a longer wait, typically 12 to 18 months, because AIMA has prioritized other visa categories ahead of them.
One practical snag catches a lot of people off guard: you need a NIF (Portuguese tax number) to sign a lease, but many landlords won’t sign a lease with someone who doesn’t have a NIF yet. Get your NIF sorted before you start seriously looking at properties, and expect to need a fiscal representative if you’re applying from outside the EU.
If you’re also weighing Portugal against other countries with similar passive-income visas, our comparison of passive income visa countries breaks down how Portugal’s thresholds stack up.
Cost of living: where the money actually goes
Housing is the expense most likely to surprise you. In Lisbon’s city center, a three-bedroom apartment now averages around €2,600 per month. Outside the center, that drops to roughly €1,700. Porto runs cheaper across the board, and rural areas and smaller cities cheaper still.
Groceries, transport, and eating out remain genuinely lower than US or UK prices, especially outside Lisbon. That part of Portugal’s reputation still holds up. Electronics, cars, and imported goods do not: high VAT and import taxes make these more expensive than you’d expect.
Most residents rely on the public healthcare system, the SNS, for emergencies, and pay separately for private insurance to get faster access to specialists and English-speaking doctors. Annual private insurance premiums typically run €400 to €1,000, depending on age and coverage.
If Lisbon’s rent doesn’t fit your budget, that doesn’t mean Portugal is off the table. It means Lisbon specifically might be, and Porto or a smaller coastal town might not be. If you’re still deciding between Portugal and nearby alternatives, see how it compares in our breakdown of the easiest European countries to move to from the USA.
Daily life: climate, housing, and getting around
Portugal is not one climate. The south, including the Algarve, stays dry and mild through winter, with average daytime temperatures around 16°C (61°F). The north, including Porto, gets real rain in winter, which is also why it’s greener.
Housing construction across the country generally skips central heating. Most homes rely on air conditioning units for both cooling and heating, and older stone buildings can hold humidity, which makes dehumidifiers worth budgeting for. If you’re renting, prioritize double-glazed windows. They matter more for winter comfort than most listings make clear.
Public transport in Lisbon and Porto is efficient enough that owning a car becomes optional, sometimes a liability given parking and tolls. Outside the two big cities, particularly in the Algarve interior or Alentejo, a car stops being optional. Importing a car from abroad is bureaucratic and expensive enough that most people find it simpler to buy used, locally, once they arrive.
Who this move actually fits
Ask yourself these questions before you commit:
Can you afford Lisbon rent at current prices, or does your budget point you toward Porto or a smaller city instead?
Does your income come from a pension or investments, meaning IFICI won’t apply to you, and have you modeled what standard tax rates actually do to that income?
Can you realistically wait 3 to 6 months for a D7 or D8 permit, or 12 to 18 months if you’re going the Golden Visa route?
Are you prepared to handle government offices, bank appointments, and paperwork at a pace slower than what you’re used to?
If your answers hold up, the next concrete steps are getting your NIF, opening a Portuguese bank account, and confirming which visa category actually fits your income type. If citizenship down the line is part of your plan, it’s worth reviewing our guide to Portuguese citizenship, since the residency requirement recently changed.
Need Immigration Assistance for Portugal?
Get clear advice on the best visa, residency, or citizenship route from Anna Clara in a 30 minute consultation. She will also give you quote for further services should you want them. This could be the full end-to-end visa service, residency cards, or help to settle in.
FAQ
Do I need NHR to make Portugal work financially? No, but you need an accurate picture of what you’ll pay without it. Most new residents fall under standard progressive tax rates now, not a preferential regime. Get a real projection from a Portuguese tax advisor before you move, not after.
How long will AIMA actually take to process my application? It depends heavily on visa type. D7 and D8 applications currently run 3 to 6 months. Golden Visa applications run longer, 12 to 18 months, because AIMA has processed other categories first.
Can I get by with only English? In Lisbon, Porto, and the Algarve, yes, for daily life. Government offices and utility companies are a different story: expect to need Portuguese, a translator, or patience there.
Is Lisbon still the best place to move? That depends on your budget. Lisbon rent has risen enough that many people who’d have chosen it a few years ago now look at Porto or smaller coastal towns instead, where the cost of living gap is still real.
