Retiring as an ex-pat in Portugal – your how-to guide

Portugal is one the best, if not easiest, countries to retire in. If you are a citizen of Portugal working in another country, all you need is return home for retirement. As a foreign citizen, you can apply for permanent residency.

Portugal is one the best, if not easiest, countries to retire in. If you are a citizen of Portugal working in another country, all you need is return home for retirement. As a foreign citizen, you can apply for permanent residency.

For a successful application for permanent residency, you should have a passport, and convince the Portuguese authorities that you have sustainable income and can afford accommodation in Portugal. However, before deciding to retire in Portugal, you may have the following questions:

Why should you choose Portugal as a retirement destination over other European nations? What is the cost of living in Portugal? How about health, inheritance, and taxation in Portugal?

After finding answers to these questions, you can now concentrate on getting a visa and other investment requirements. What’s more? Let’s jump into the main content.

Why You Should Retire in Portugal

Portugal magnetizes expats through its inviting climate, awesome coastlines, culture, and pocket-friendly properties for sale. You can reside at the fishing villages, the coastal Algarve region, or cities on the riverside. 

Portugal attracts a myriad of expats because a majority of Portuguese speak English. Consequently, it is not a surprise that most US, UK, and citizens of other regions of the world dominate Portugal.

As a citizen of the European Union, the settling process is easy and convenient since you can fast acquire permanent residency and enjoy health and tax benefits like the locals.

Although most jobs are reserved for Portuguese, you can work as an IT or software expat, especially in Lisbon. As a new expat, you need a four-month residence visa to work in Portugal. Also, you can use the Schengen National visa, for a longer work duration.

Portugal has better infrastructure, security, and tourist attractions than most European countries. These attractions are rolling vineyards, volcanic islands, beaches, bouldered villages, and natural springs. Many tourists visit the medieval Portuguese royal palace, sip wine at Rio Douro Valley and hike at Parque Natural da Serra da Estrela. 

Cost of Living in Portugal 

The cost of living is lower in Portugal than in most European countries. To make this explanation vivid, let us compare life in Lisbon and that of London.

The cost of real estate in Lisbon is 25% lower than in most places in London. For example, the Lisbon real estate provides a 27% cheaper rent than in London. If you want to own one of the Lisbon apartments, you can find many homes for sale in Lisbon, Portugal.

Arm yourself with about 300k euros for a townhouse or a villa. Although the rates at Algarve are almost similar to those of the United Kingdom, expect to get better services in exchange for your money.

The cost of consumables is comparatively lower. This can be as cheap as 40% compared to London.

One of the less expensive cities to reside in in the world is Lisbon, according to Numbeo. It promises 52% cheaper rent than the United Kingdom and 30% lower than most cities in the United States. The reduced rates do not compromise on the quality of the restaurant or rental services. 

You can spend less in Portugal than in the United Kingdom when you live further from the city. Besides, you can comfortably survive on a fixed income when you reside in the rural areas and the coastal regions. 

On average a couple lives on 2000 USD per month. This includes an average rent of 750 USD for a one-bedroom in Lisbon. Apart from rent, the expenditure caters to grocery, water and electricity, internet, and car expenses.

Although fast food is uncommon, expect organic and fresh food in most restaurants in Portugal. Dishes include cod, shrimps, and cod. You can get desserts and egg as well.


As a citizen of Portugal, you are entitled to free healthcare. Expats from European nations can start enjoying free healthcare as soon as they acquire a residency.

However, if you are non-EU, for example, the US citizens, you will get free healthcare after staying in Portugal for at least 5 years upon attaining permanent residency. What does this imply?

When migrating to Portugal, get ready to pay for the health services that you use. Better yet, you need health insurance before residing in Portugal. Please note that applying for retiree residence demands proof of ownership of a health insurance policy.

To enjoy more economical healthcare, change your health insurance policy to a private health insurance plan within Portugal. This is most vital for the citizens of the United States.

Payment for the insurance service depends on your age. For instance, you can pay 4 euros less if you are less than 55 years. In most cases, the upper class and the middle class buy the private healthcare policy. 

However, you should jot this down. The private healthcare policy does not accommodate emergencies and accidents.

Additionally, to register for healthcare services you need a valid passport, proof of residence, ID of tax from the local authorities, and a social security number. Due to over demand for private healthcare services, many EU citizens, who are not Portuguese, opt to subscribe to healthcare from native countries. 


If you have not been leaving in or paying tax to the Portuguese government, here is a piece of cake for you. As an expat, you are exempted from tax for 10 years, since your first day of residing in the country.

However, this used not to be this case. And even now, the locals have to pay tax on almost all types of income. The income is pension as well as income from international activities. 

To make the country inviting to foreigners, the Portuguese introduced a Non-habitual residence (NHR) status. This is a tax condition that exempts those who have not been paying tax from doing so for the 10 subsequent years. 

To enjoy the NHR benefits, you must meet particular criteria. First, you have never been a tax resident in Portugal for the past 5 years, before applying for NHR. Second, you occupy a residential home in Portugal. Lastly, you have a residence in Portugal and plan to keep it.

Freelancers, business owners, pensioners, and other professionals can apply for NHR status. To apply, arm yourself with documents to prove your residency and a tax number from Portuguese authorities.

Initially, you can apply for tax residency then later seek for the NHR status. The status exempts your foreign incomes from taxation. 

After the expiry of the NHR status, you will need to pay tax like any other Portuguese resident. For example, if you live in gated real estate in Lisbon Portugal, you will pay tax and ongoing annual service charges.

This may be 3000 euros on a golf complex or 1500 euros in a townhouse. Generally, source or self-employment income generated from high value-added activities like artistic, scientific, and technical undertakings are taxed at a 20% rate. To avoid double taxation, Portugal exempts dividends and interests from taxation.

In 2020, the Portuguese government enacted a law to introduce a 10% tax for pensions. However, this does not affect the Non-habitual residents since they will continue enjoying 0% taxation on pensions. Here’s the more exciting part: 

Portugal does not have a wealth tax and it allows for tax-free remittance of funds. Besides, the country lacks a gift tax on donations submitted to family members. Finally, Portugal is one the best countries to invest in if you long for an increase in the value of the real estate—something that would otherwise be difficult with numerous tax leakage avenues.


Portugal does not tax inheritance on inherited property. Instead, it imposes a flat rate of 10% stamp duty on the property. This duty exempts spouses, ascendants, and descendants. Besides, the inheritance process attracts some administrative fees. 

Before the inheritance process, the Portuguese authorities must consult the Portuguese Civil Code. The code states that the country of the deceased should govern the inheritance process.

In cases where it is the country of permanent residence of the deceased, Portugal will undertake the inheritance process. Portuguese laws demand that a portion of the real estate be shared amongst the defined heirs.

For instance, amongst the spouse plus biological and adopted family tree of the deceased. During inheritance, the authorities have to adhere to the will of the deceased. 

Now that you have an overview of what to expect in retiring in Portugal, as an expat, let’s have a look at the Visa process and related investments. 

Visa Requirements

As I said earlier, Portugal is one of the easiest countries to retire in. This is because the country seeks to loosen rules to enable investors to comfortably retire there. The process of retiring in Portugal starts with obtaining a permanent residency.

A permanent residency is a guarantee to enjoy the citizenship of Portugal. The ease of obtaining a permanent residency depends on your native background. This brings us to the question,

“Who can retire in Portugal?” The short is Anyone. However, European residents enjoy more benefits than non-EU such as the United States citizens. Here’s all you need to know about retiring in Portugal from various regions:

Retire in Portugal as an EU Citizen

To retire in Portugal as a citizen of the European Union, all you need is to apply for residency in Portugal. After this, you are entitled to all the benefits any Portuguese enjoys. To apply for permanent residency, consult SEF (Servico de Estrangeiros e Fronteras) via their website.

SEF is the official immigration department of the Portuguese government. Through their website, you will find access to their numerous offices countrywide. 

Retire in Portugal as a non-EU citizen

If you want to retire in Portugal but you are not from Europe, you need to apply for a residence permit. The Portuguese consular office needs a valid passport, proof of health insurance, and income.

Next, the authority checks your criminal record. Once you meet the requirements you get a residence permit. The residence permit allows you to stay in Portugal for 5 years. After the expiry of the permit, you need to apply for permanent residency. 

Many non-EU seek a Portugal golden visa. A golden visa for Portugal is a scheme to magnetize investors to Portugal. This investment visa allows you to live and work in Portugal, travel visa-free within the Schengen Area, and include your parents, children, or spouse to the program.

Lastly, the golden visa to Portugal lets you apply for citizenship, at the end of 5 years since starting to reside in Portugal. Then, you can apply for permanent residence. 

To obtain the investor visa should meet one of the following requirements:

  • Invest above 500k Euros on real estate in Portugal,
  • Conduct a capital transfer above 1000k Euros,
  • Create above 10 full-time jobs for Portuguese,
  • Invest 350k and above in a Portugal qualifying investment fund,
  • Donate a minimum of 250k Euros to national heritage, arts, or culture.

Retire in Portugal as United States citizen

If you are a non-EU who originates from the US, the Portuguese authorities grant you a 120-day stay visa. To get the visa, you must provide proof of income. This should indicate at least 1070 USD monthly income for the 120 days.

You can extend the 120-days stay by acquiring a one-year residence permit. You are at liberty to apply for a permanent residence after 5 years of your stay in Portugal.

Portugal also gives you citizenship provided you can prove Sephardic Jewish ancestry. Lastly, Portugal can grant your citizenship opportunity as long as your native country tolerates dual citizenship.


As an expat, retirement in Portugal is one of the simplest tasks. All you need is to apply for permanent residency. Before applying for the service, ensure you understand the Portugal lifestyle. Most importantly, read and familiarize the above guidelines. This article should enable you to prepare psychologically, financially, and socially as you plan to retire in Portugal. Once settled, you have the freedom to undertake various investments.



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