Portugal is one of the world’s top retirement destinations.
It has much going for it:
Now, more and more North Americans are looking to retire in Portugal.
You might be surprised to find out that you can live well in Portugal for less than your current budget.
The cost of living in Portugal is among the lowest in Western Europe. A retired couple could live here comfortably, but modestly, on a budget of about US$1,200 per month. With a budget of about US$1,800 per month or more, you could enjoy a fully appointed lifestyle in the heart of Old Europe.
Like in any other place in the world, your monthly budget will come down to your lifestyle choices. If you choose to live like a local, your budget will remain in the US$1,200 to US$1,500 vicinity. If you find yourself in need of imported goods, expect your monthly expenses to be a bit higher than the norm.
Buying and selling real estate in Portugal is a simple, transparent process, but it takes time.
The property market in Portugal is well-established and there are no restrictions on the purchase of real estate. Transaction costs are generally low. The country’s property registry system is centralized and very reliable. The law protects property, property rights, and the right to access and use one’s own property.
To start the purchase process, you’ll need a personal fiscal number from the local tax office—if you got a local bank account then you were automatically assigned one.
While many countries overseas do not require credentials for real estate agents, Portugal does. You’ll find agents in the city with licenses issued by the government.
The process itself is straightforward…
Upon finding a property you wish to buy you’ll sign a letter of intent in the presence of a local lawyer.
Once a price has been agreed to by both parties, the lawyer will write the promissory contract with the seller contrato de promessa de compra e venda. In order to complete the promissory note, you’ll need the following:
You’ll have to put down a deposit, usually 10% to 30% of the total purchase price (you may need a lawyer to negotiate a deposit in the lower end). The deposit is forfeited if the purchaser does not proceed; if the vendor withdraws from the transaction double the deposit is paid back to the purchaser.
The buyer pays the remaining balance of the purchase price, transfer tax (imposto de sisa), and any attorney or notary fees.
Once everything has been paid (usually within about four weeks of signing the promissory note) you’ll be able to complete and sign the deed (escritura de compra e venda).
Finally, you’ll have to register the deed at the public land registry and tax office. This should be done as soon as possible after signing the deed.
Moving to Portugal (or any country other than the one you are in) can be a complex and cumbersome process. There are countless things to consider before making such a leap—everything from health care to cost of living to culture shock—but often the effort pays off with a higher quality of life at a lower cost. And it’s always an adventure. Aside from the big picture issues, there are many practical things to consider.
For example, moving household goods to Portugal.
Many people who have made the move to retire in Portugal (or another country) offer one word of advice to anyone considering doing the same—slow down. Rather than throw all your worldly goods into a shipping container and immediately decamp halfway across the globe, consider spending at least a few months in Portugal before you go to the trouble of moving an entire household. The advice from those who have done it before is to travel as light as possible at first, perhaps only with a couple extra suitcases, until you are sure the expat life is for you.
Once the decision has been made to take the plunge, people relocating to Portugal have 12 months to transfer their belongings duty-free to the country (furnishings, linen, kitchen equipment, clothing and other personal items, electronics, and computers).
Those shipping the items should acquire what is called a Baggage Certificate (Certificado de Bagagem) from a Portuguese consulate before departing. Having that document will make clearing customs much easier on the other end.
Domestic pets may be imported by their owners into Portugal under the European Union’s pet passport system. Animals coming from another EU country require only a rabies certificate and a valid pet passport, which is available from many veterinarians on the continent.
Animals coming from non-EU countries also need a pet passport and must be microchipped and certified rabies-free before departure. In addition, Portuguese authorities require a health certificate from your vet issued within one week of arrival in the country. If the animal is traveling from the United States or Canada, the vet must be accredited by the US Department of Agriculture and the form must be endorsed by the USDA in the States or the CFIA in Canada. Some airlines will also require a fitness-to-fly certificate from the vet.
Health care in Portugal is international standard. Medical tourism is a growing industry here due to all cities and large towns having excellent hospital and health care facilities. In contrast, some remote areas may be several hours from full-service care.
Anyone considering to retire in Portugal, must understand the health care system. Especially those coming from the United States.
Portugal has two separate health care systems. One is a publicly financed National Health Service (Serviço Nacional de Saúde, or SNS). It’savailable to all citizens and functions in the same manner as any other nationalized European health care system. The other is a private health care network available on a fee basis.
Portugal’s national health system tends to lean more toward the reactive than the proactive when it comes to dealing with illnesses or medical conditions. Meaning, they put more emphasis on curing something than preventing it.
Doctors are generally trained to North American or European standards. Some are even foreign-born themselves. Many speak English, especially in the tourist destinations (although that will not be the case in rural areas).
Most doctors divide their time between the SNS and private practices.
Infrastructure in Portugal is about what one would expect from a Western European nation—good and getting better all the time.
With the help of EU development funds, Portugal has invested heavily in its rail and road network and the investments have paid off. The OECD ranks Portugal’s highway network among the top ones in Europe, with the most extensive network per capita on the continent. It is one of Portugal’s strong points for infrastructure.
Portugal’s national rail network is administered by Comboios de Portugal and connects most of the country’s main cities. International service is via Spain.
For the most part, the network is fast and reliable, and fares are an extremely good value. The more scenic routes are in the north, particularly Douro line from Porto to Pocinho.
The four busiest international airports serving Portugal are in the cities of Lisbon, Porto, Faro, and Madeira. Transportes Aereos Portugueses (TAP), the national flag-carrier, provides domestic and international service along with most major U.S. and European airlines.
As for the internet and phone services, both are widely available in Portugal. More than 90% of Portuguese companies have broadband connection, 95% of the country enjoys DSL coverage, and 90% of public services are online.
If you spend more than 183 days in-country in any 12-month period (it doesn’t matter if these days are consecutive or not), and/or if you maintain a residence in Portugal at any point in the same time period, you become a tax resident in Portugal.
If you haven’t been tax resident in Portugal for the previous five years, you can apply for NHR status. This allows you to receive income at reduced tax rates. For employment and self-employment income, the tax rate is a flat 20%. For pension income, it’s a flat 10%. Some foreign-sourced income is exempt under the NHR program. NHR status lasts for 10 years.
Here’s a piece of good news… Portugal has double taxation treaties in place with Canada and the United States, so you’re at no risk of being taxed twice here.
Portugal was one of the richest countries up until the 19th and 20th centuries.
It joined the European Economic Community (the precursor to the European Union) in 1986 and adopted the euro as its currency on January 1, 2002, along with 11 other EU countries. At this time, Portugal’s economy was unique among its continental counterparts. It was heavily dependent on tourism receipts and remittances from foreign workers engaged primarily in temporary work in high-income countries such as France. It also harbored an anachronistic agricultural sector with small family farms in the north and large collective farms in the south where productivity, despite the country’s natural resources and climate, was a quarter of the European average. It’s public sector also substantially exceeded those seen in other Western European countries.
Beginning in the 1990s, Portuguese governments recognized the highly politicized public enterprise sector as a major obstacle to economic growth and began privatizing many state-controlled firms and liberalizing key areas of the economy.
Much like other western European countries, the Portuguese economy is now dominated by services. Large inflows of capital since Portugal’s entry into the EU have fostered and sustained development to the point that Portugal is now classified by the World Bank as an upper-middle-income economy.
|Real annual growth rate (2021)||4.88%|
|Per capita income (2021)||US$24,262|
|Inflation rate (2021)||1.3%|
|Natural resources||wine, oil products, wood and cork, wood pulp, and paper.|
|Primary sectors||Services (tourism, telecommunications, financial services)|
|Secondary sectors||Industry (textiles, chemicals, automobiles, and parts)|
|Tertiary sectors||Agriculture (paper and pulp, dairy products, wine)|
|Exports (2021)||US$47.6 billion: Vehicles, electrical machinery (equipment), mineral fuels, plastics, knit clothing, paper, articles of iron or steel, furniture, bedding, lighting.|
|Major trade markets||Spain, France, Germany|
|Major suppliers||Spain, Germany, France|
|Labor force (2020)||5,189,015|
Portugal has taken great strides in recent years to boost growth by increasing its competitiveness and simplifying the process of investing and doing business in the country. It has now become much easier to invest in Portugal, thanks to reforms in competition law, the labor market, and the tax system, all put in place to further drive an economic recovery.
The legal system in Portugal is based on non-discrimination regarding the national origin of investment, and foreigners are permitted to invest in all economic sectors open to private enterprise. There are, however, limitations regarding certain activities, among them defense, water management, public telecommunications, railway, maritime transportation, and air transport (mainly those industries centered around heavy infrastructure in Portugal).
The government of Portugal has gone great lengths to attract foreign investment with tax incentives for investments in certain sectors under certain circumstances. Corporate tax rates have been reduced and tax credits are offered for incoming investments depending on the location, the number of jobs created, and the degree of technological innovation involved.
Local government authorities also sometimes offer additional incentives for job-creating initiatives.
As for investing in real estate in Portugal, there are no restrictions on foreign property ownership in Portugal and transaction costs are generally low. The high-end of the property market has benefitted especially from the country’s Golden Visa program, which grants non-European Union citizens who buy at least half a million euros worth of property immediate residency.
The fastest gains in real estate are being seen in the Lisbon metropolitan area, followed by Amadora, Barcelos, Villa Franca de Xira, and Porto.
Acquiring permission to remain in Portugal for an extended period, in the form of a Portugal visa and subsequent residence permit, is a rather straightforward process. However, it requires significantly more bureaucratic hoops depending on whether you are a citizen of the European Union or not.
Portugal’s Golden Visa Program is a residence by investment program, and it’s aimed at non-EU citizens, including Americans and Canadians. It enables investors and their family members to enter and live in Portugal and to freely travel within the whole Schengen area.
This visa is expensive, though, and the rules of the program recently changed.
There are several ways to qualify, from making large bank transfers to Portugal to investing in artistic or cultural activities…
Most people opt to invest in real estate to qualify for a Golden Visa.
These are the rules in 2022:
Not all properties qualify for a Golden Visa-eligible investment. Eligibility is restricted to certain inland districts of Portugal and the Azores and Madeira Autonomous Regions.
The D7 visa has become the most popular type of visa among expats in Portugal.
As the name suggests, this is an option for people who have income or capital that allows them to support themselves in Portugal. To qualify for the D7, you must meet a minimum income requirement. Officially, this is tied to the minimum wage, which is 705 euros per month in 2022. Ideally, though, you’ll be earning more (the immigration officer that processes your application has discretionary power). About 1,200 euros per month should do it. For a couple, you should be able to show one-and-a-half times this amount.
Residence permits are valid for one year and can be renewed for periods of two years. After five years with a residence permit, you can apply for a permanent residence permit.
One downside of the D7 visa is that it’s designed to make you tax-resident in Portugal. It requires you to spend at least 16 months in the country during the first two-year period. By doing so, you will trigger tax residency. You will have to file taxes in Portugal, though this doesn’t necessarily mean that you’ll have a huge tax bill. In some cases, you may not owe any tax at all.
We strongly suggest you brush up on at least some basic Portuguese. Many people speak English in Portugal, especially if you’re visiting touristic destinations, but knowing the basis will aid in avoiding confusion.
Yes. However, petty theft is present (just like in most countries in the world). Make sure to always keep an eye on all your personal items and you’ll be fine.
Yes. The water here is safe to drink. However, the taste isn’t great. You may even see locals buying bottled water for this same reason.
You can use two plug types in Portugal, type C and F. Portugal operates on 230V supply voltage and 50Hz.
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