Retirement in Portugal: Advantages and Disadvantages

Portugal has become increasingly popular among foreign retirees looking for a softer, sunnier, and more affordable lifestyle. The country offers numerous attractive advantages, making it an ideal option for starting a new life:

• Increased Purchasing Power: The cost of living is generally lower than in northern European countries, allowing retirees to enjoy a higher purchasing power, enabling them to make the most of their pension and maintain a comfortable standard of living without breaking the bank. Restaurants, beauty services (hairdressers, beauticians), and domestic help services are, for example, much more affordable than in other European countries.
• Exceptional Climate: Winters rarely drop below 10°C and summers are hot and sunny.
• Easy Integration: The Portuguese are known for their hospitality and friendliness, making it easy for foreign retirees to integrate. Additionally, there are many expat associations to help with the integration process.
• Gastronomy: Rich and generous, Portuguese cuisine features seafood, fresh vegetables, fruits, and world-renowned pastries.
• Varied Real Estate: From typical whitewashed houses with red tile roofs to modern villas with gardens and sea views!
• High Quality of Life: Whether by the water in the Algarve, in the dynamic Lisbon suburbs, or in the pleasant inland areas.

However, living in Portugal also presents a few challenges, such as the language barrier for some, the distance from loved ones, or the administrative procedures that may seem complex for newcomers. These minor inconveniences are small compared to the quality of life on offer!

Steps to Moving to Portugal

Conditions for Moving to Portugal

There are certain conditions to meet to retire in Portugal:

• Have a minimum stable monthly income (an essential condition for obtaining residency).
• Have private health insurance (for non-EU citizens).
• Prove that you have accommodation.
• Provide a clean criminal record from your home country.

Administrative Steps

The steps to moving to Portugal differ depending on your nationality and whether you are an EU citizen or not! Regardless, if you plan to settle in the country for an extended period, you will need to apply for a Número de Identificação Fiscal (NIF), necessary for any visa application and financial transactions, such as opening a bank account or buying property, as well as a residence card.

For more information, check out our article on how to get visa, residence, and nationality here!

Receiving Your Pension Abroad

To receive your pension abroad, it is very important to:

• Communicate your change of address to the pension funds in your home country.
  • In France: Notify the Caisse nationale d’assurance vieillesse (CNAV).
  • In Germany: Inform the Deutsche Rentenversicherung.
  • In the Netherlands: Inform the Sociale Verzekeringsbank (SVB).
  • In the United Kingdom: Inform the Department for Work and Pensions (DWP).
• Provide your new Portuguese bank account details.
• Send an annual certificate of life, signed by a competent local authority.
• Declare your taxes in your home country or country of residence. Taxation can vary depending on your situation and tax treaties between your home country and your country of residence.

The Golden Visa

The Golden Visa, also known as the investor visa, is for people who invest in the Portuguese economy. The investment must meet certain criteria, such as creating or maintaining jobs, supporting scientific research, or protecting heritage through recognized and eligible organizations. Note that since 2023, the Golden Visa no longer includes real estate purchases.

If you want to know more about the Golden Visa, consult our article on the subject!

Taxes in Portugal for a Retired Foreigner

The RNH Status in 2024

The Non-Habitual Resident (RNH) status in Portugal has been officially abolished for new residents. This advantageous tax regime, which offered reduced tax rates and tax exemptions on foreign income for ten years, is no longer available for new applications since January 1, 2024.

What Taxes for a Foreign Retiree in Portugal?

Private pensions received from abroad by foreign retirees residing in Portugal are now taxed according to the progressive income tax scale, similar to that of Portuguese residents.

Additionally, foreign residents must declare all their worldwide income, which may result in additional tax obligations depending on bilateral agreements between Portugal and their home country to avoid double taxation. It is recommended to consult a specialized tax advisor to navigate this new tax framework and optimize personal tax situations.

There are also other taxes for property owners. Check out our article on taxation here!

Conclusion

Portugal, with its many facets and numerous attractions, is a true haven for European retirees. Whether you are seeking cultural adventures, seaside relaxation, or new culinary experiences, this country can fulfill all your desires. The tax benefits, security, and friendliness of its inhabitants add to the appeal of this destination. By choosing to retire in Portugal, you opt for an exceptional quality of life in an enchanting setting where every day can be a new discovery. So why not consider Portugal as your next great life adventure? Enjoy this precious stage in a country that knows how to warmly welcome its new residents.