Sunshine, a relaxed lifestyle and affordability are all big drivers for retirees considering a move to Portugal.
In the past decade, Portugal’s population of foreign retirees has more than doubled, with British expats accounting for 19% of it, according to the Portuguese Statistics Department.
Portugal is also frequently ranked as one of the safest countries in the world according to the Global Peace Index – and often the highest in southern Europe – and, of course, we enjoy a "perpetual friendship" with the Portuguese dating back to 1373.
Established expat communities and good healthcare (which can be virtually free – read on to see how) are also key reasons why some people make the move. Could it be you? Here, we have looked at the numbers to help you decide.
How much does property cost in Portugal?
House prices in Portugal, away from the expensive coastal hotspots, are refreshingly low.
The popular Algarve is relatively expensive compared to the interior. The average property in Portugal is around €150,000, according to Idealista.com, but if you drive just 15 minutes away from the coast, prices can drop significantly.
Areas of central Portugal have appealed because of their affordability – for example, Tomar, Coimbra and Castelo Branco – whilst the Silver Coast offers options for those willing to spend more to be close to the sea.
You can find a cute village house to fix up around Coimbra for €50,000, or double that for one ready to move into.
The average cost of a home in the UK is just under £300,000, according to the ONS, so that buys an awful lot in Portugal. For that budget, you could also afford an apartment in the lovely eastern Algarve, which offers authentic Portuguese villages, a superb climate and beautiful beaches.
Don’t forget to factor in buying costs of around 8% on a resale property.
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How much does a Portugal retirement visa cost?
Unless you have an EU passport – or a spouse with one – you will need to apply for a visa. For retirees in Portugal, this is not a particularly difficult or expensive process.
The D7 is the obvious route for retirees and also those working remotely. You are required to show that you will not be a financial burden by proving passive sources of income of at least €11,040 per year for a single person, or €16,560 for a married couple (2026 figures). The income must be passive (e.g. savings interest, dividends, rental income or pension income).
The visa is applied for in the UK through the Portuguese consulates in London or Manchester and is processed via the VFS Global portal. The visa costs around €200 to obtain.
When arriving in Portugal, you must be covered by travel health insurance, but then you register with the SNS and access healthcare that way (see below).
A D7 residence permit is granted for an initial period of two years and can then be renewed for three years.
find out more about visas in portugal
How much does healthcare cost in Portugal?
You will need to factor in the cost of private healthcare cover initially if you are under UK state pension age – this is a condition of the visa application. Once you are established, you can register with the SNS and access the Portuguese healthcare system as a resident.
Those over UK state pension age can apply for an S1 Certificate from the NHS before they leave for Portugal. This means they can use it when they register with the SNS and access subsidised healthcare from the outset.
find out more about healthcare in portugal
What is the cost of living in Portugal?
Portugal is prized for its affordable cost of living – outside Lisbon and the five-star resorts of the Algarve.
The cost of living in Portugal is 37.5% lower than in the UK when food and everyday living expenses such as transport and utility bills are compared, according to Numbeo.com.
Rents are much lower, as are annual local taxes and car running costs, and there are OAP discounts. Over-65s receive half-price train and bus fares. A bottle of wine from the supermarket costs between €2 and €5.
Retirees in Portugal can live comfortably on €1,300 to €1,500 per month – or €15,600 to €18,000 per year – according to relocation advisory company Global Citizen Solutions.
find out more about the cost of living in portugal
What are the tax implications of retiring to Portugal?
You will need to consider how you will be taxed in Portugal. Once you become resident there, you will be subject to Portuguese tax rates. Unlike Cyprus and Greece, for example, Portugal no longer offers special tax breaks for foreign retirees, as it once did.
Retirees should start planning early for a move. Pensions are taxed at progressive income tax rates that start at 12.5% on the first €8,342 of income, then 15.7% on income between €8,342 and €12,587, rising through the scale rates to a top rate of 48% on income of €81,994 or more.
An additional solidarity tax is payable by individuals with higher incomes.
Investment income (interest, dividends, rental income and capital gains) is generally taxed at a flat rate of 28%, although it can instead be added to the taxpayer’s other income and taxed at the progressive rates.
Beware that if you sell your UK home after becoming tax resident in Portugal, you could be subject to capital gains tax there – so take advice.
Inheritance and gift taxes have been abolished in Portugal, but a Stamp Duty of 10% applies on the transfer of assets on death, although only on those located in Portugal, such as houses and cars.
find out more about taxes in portugal
Thinking about retiring to Portugal?
Whether you're drawn to the Silver Coast, central Portugal or the Algarve, taking time to understand the costs involved can help you plan your move with confidence.
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