Over the past few years, Portugal has become the place for Americans to move to. Why is that?
There are a lot of things that Portugal has to offer, including beautiful beaches, a low cost of living, fantastic weather, and a relaxed pace of life. But these things can be found in many European countries, particularly other Southern European countries like Spain, Italy, and Greece? So why Portugal?
There are a number of reasons, but the first is attainable visas. Portugal is one of the easiest countries to move to thanks to residency visas like the D7 and golden visa. The D7, or retirement income visa as it’s sometimes called, only requires applicants to have an income that’s equivalent to the Portuguese monthly minimum wage. As of 2023, that’s just €760 per month. If you have a pension, social security, income from dividends, or income from a rental property, you could qualify for the D7 with an income of less than $1,000 per month.
Another popular visa is the golden visa. This typically requires you to invest into something (e.g. a Portuguese venture capital fund) but, in return, you get residency in Portugal. What’s more, you’re only required to spend an average of 7 days per year in Portugal to maintain your residency.
Both of these visas allow you to take advantage of benefits like the tax-funded Portuguese healthcare system while you live here and after five years you can apply for citizenship, allowing you to obtain an ‘EU passport.’ In comparison, Spain requires you to spend 10 years and normally doesn’t recognise dual citizenship.
Then there’s Portugal’s safety record (something you don’t get if you move to somewhere like Mexico), access to other European countries, and the relaxed slow pace of life.
Now are you seeing why so many Americans are moving to Portugal?
Did you know?
- Americans can spend up to 90 days in every 180 days as a tourist.
- Americans that want to stay longer, and don’t hold an EU/EEA/Swiss passport, need to apply for a residency visa (such as the D7 or golden visa) in order to move here.
Pros & Cons of Moving to Portugal as an American
Portugal has been capturing the hearts of Americans for several years now. But what are the pros and cons of moving here?
- Safety: Portugal boasts a safety record that stands out, especially when juxtaposed with the U.S. While no place is devoid of crime, Portugal’s safety landscape is notably different from the U.S. and even surpasses many sought-after retirement spots in Asia and Latin America.
- Affordability: Despite a rise in living costs, Portugal still offers value for money. Essentials like real estate, groceries, and health coverage are often more budget-friendly than in the U.S., especially when compared to high-cost states like California or New York.
- Culinary Delights: While you might miss certain international cuisines, Portuguese gastronomy is a treat. The quality of ingredients, backed by stringent EU standards, ensures both taste and health.
- Stable Governance: The political scene in Portugal is relatively calm, with ideological shifts being more moderate than the pronounced swings witnessed in the U.S.
- Healthcare: Portugal offers dual healthcare systems – public and private. As a resident, you gain access to both, with the private sector being notably more affordable than its U.S. counterpart.
- Emphasis on Family: Portugal cherishes family values. Both the young and the elderly receive better care and attention compared to the U.S.
- Tax Benefits: The NHR tax regime and dual tax treaties with the U.S. make Portugal’s tax landscape attractive for newcomers.
- Closer to Home: Portugal’s western European location is a plus. Lisbon is just an 8.5-hour flight from New York, and the Azorean island of São Miguel is even closer.
- Language Comfort: While mastering European Portuguese is important, many locals converse fluently in English, a proficiency not as common in neighboring Spain or France. Additionally, Spanish speakers will find many Portuguese are bilingual in Spanish.
- Path to Citizenship: After a mere 5-year residency, you can apply for Portuguese citizenship, granting you the privileges of an EU passport.
- Simplified Residency: Securing a Portuguese visa is relatively straightforward for Americans, especially given the modest income requirements, a contrast to many other European nations.
Of course, there are a few cons to consider too:
- Customer Service Dynamics: Unlike the U.S., Portugal, like much of Europe, doesn’t prioritize customer service in the same way. While cheerful interactions might not be everyone’s priority, the service gap becomes evident when resolving issues.
- Pace of life: One might be drawn to Portugal for its relaxed tempo, but this can sometimes translate to delays, especially when navigating governmental red tape or engaging with certain local businesses.
- Varied Cost: While some essentials like groceries and telecom plans are very budget-friendly in comparison to the US, others, such as vehicles, gadgets, and personal care items, can be more expensive. It can be a tad irksome knowing that the same product might be available at a lower cost back home.
- Property Considerations: While real estate in Portugal might be more wallet-friendly than in the U.S., properties often need enhancements to align with American preferences. Beyond aesthetic updates and adding amenities like fly screens, many might find the need to bolster insulation, introduce heating solutions, or install air conditioning.
- Popularity: Because so many people have moved to Portugal over the past few years, the cost of property, both rentals and to purchase, has increased considerably.
However, despite the downsides such as increased cost of living, pros like being able to apply for citizenship in 5 years, not having to give up your American passport, and ease of obtaining a residency visa mean that Portugal is still more favoured that other European countries. And when you consider other benefits like safety and a public healthcare system, it’s easy to see why Portugal is seen as a more desirable place to live than Latin American countries such as Costa Rica, Panama, or Mexico.
Residency Visas To Consider
Portugal offers a number of different residency visas for US passport holders to consider.
- The Contingency Planner: If you’re seeking a safety net considering potential uncertainties in the U.S., the golden visa offers a solution. It grants residency with a minimal stay requirement of just 7 days annually, making it perfect for those contemplating a future move.
- The Retiree or Passive Income Earner: Those with a steady income stream, be it from pensions, rental properties, or dividends, might find the D7 visa a fitting choice.
- The Remote Worker: Remote professionals, freelancers, and digital nomads with consistent earnings can consider Portugal’s dedicated digital nomad visa or D8 visa.
- The Savings Holder: If you’re without a regular income but possess cash savings exceeding €400,000, the golden visa could be your route. While its fees are steeper than the D7, it retains the advantage of a mere 7-day annual stay requirement.
- The Budding Entrepreneur: For those with entrepreneurial aspirations, whether for a startup or an established venture, the D2 or entrepreneur visa paves the way for a fresh start in Portugal.
- The EU Passport Holder: If you (or your partner) already hold a passport from an EU nation, such as Ireland or Italy, you can bypass the residency visa process altogether and make your move seamlessly as an EU/EEA/Swiss citizen.
Cost of Living
The cost of living can significantly influence one’s decision to relocate. When comparing the US and Portugal, there are stark contrasts that potential expats should consider. Here’s a breakdown of the primary expenses in both countries:
- US: Housing costs vary widely, with cities like San Francisco, New York, and Los Angeles being among the most expensive. Median rent for a one-bedroom apartment in these cities can easily exceed $2,500 per month.
- Portugal: Renting is generally more affordable. In Lisbon, the capital and most expensive city, a one-bedroom apartment in the city centre averages around €1,000 per month. In smaller towns, this can drop significantly.
- US: The average monthly grocery bill for a single person is around $400, depending on dietary habits and location.
- Portugal: Groceries tend to be cheaper, with fresh produce and local products being particularly cost-effective. A single person might spend around €200-€250 per month. Generally speaking,
- US: A meal at a mid-range restaurant can cost between $20-$50 per person, depending on the city.
- Portugal: Dining out is more affordable. A three-course meal at a decent restaurant might set you back €20-€30.
- US: Monthly public transportation passes in major cities average $70-$120. Gasoline prices fluctuate but can be around $3 per gallon.
- Portugal: Public transport is cheaper, with monthly passes averaging €40 in cities like Lisbon. Gasoline tends to be pricier than in the US.
- US: Healthcare can be expensive, with insurance premiums and out-of-pocket costs varying widely. An average health insurance premium might be $400-$600 per month for a single person.
- Portugal: Both public and private healthcare systems are available. While the public system is funded through taxes, private health insurance is much cheaper than in the US, with premiums often below €100 per month.
- US: Monthly utilities (electricity, heating, cooling, water, garbage) for an 85m^2 apartment average $150-$200.
- Portugal: Utilities for a similar-sized apartment are roughly €100-€150, though this can vary based on usage and location.
Taxes are a complex issue and there isn’t a one-size-fits-all answer to any question. For this reason, you should always speak to a financial professional to understand how Portuguese taxes will affect you.
That said, there are a few general things to be aware of.
- Tax residency: Individuals who spend more than 183 days in Portugal in a year or have a habitual residence there are considered tax residents and are taxed on their worldwide income. Most visa holders, with the exception of golden visa holders, will need to spend 6-8 months of the year in Portugal in order to meet the visa requirements.
- Tax treaties: Portugal has treaties with numerous countries, including the US, to prevent double taxation. These agreements ensure that individuals and businesses don’t pay taxes on the same income in both countries.
- Tax Benefits: Portugal offers a number of tax programs aimed at attracting newcomers to Portugal as well as to entice those who have already left. The most famous of these is the NHR tax regime, but it’s far from the only option.
- Other taxes: Income tax is just one consideration. Did you know that Portugal has no wealth tax? There also aren’t state taxes. Property taxes are also typically a fraction of what they are in the US, with most people paying just a few hundred euros per year.
Where Should Americans Consider Moving To?
There are Americans dotted all over Portugal, and you can move anywhere you like, but there are a few places that have quickly become hotspots from American expats.
- Lisbon – Portugal’s capital city is especially popular with digital nomads and younger expats due to the increasing cost of rent, but although rents have increased, it’s a small price to pay to get access to a capital city with great weather and a laid-back feel
- Cascais – Situated just outside of Lisbon, the seaside town of Cascais has a much more laid-back vibe than Central Lisbon, making it particularly popular with retirees that want access to the city but don’t want to live downtown.
- The Algarve – The southern coastal region of the Algarve has some of the best beaches in Portugal and the best weather. It has long been a popular destination for expats from Germany and the UK, and now many Americans are following suit. Many newspapers have referred to the Algarve as the California of Europe.
- Madeira – The island of Madeira is closer to Africa than it is to Portugal and this means that it has a completely different climate – one that’s mild and consistent for the majority of the year.
- Silver Coast – The coastal area between Lisbon and Porto (particularly around Coimbra and Caldas da Rainha) has rapidly grown in popularity as an affordable alternative to the Algarve. It doesn’t have quite as mild winters but what it lacks in winter warmth, it makes up in access to cities like Lisbon, Coimbra, and Porto and a more authentic Portuguese feel.
- Porto – Portugal’s second city has long been overshadowed by Lisbon, but more and more expats are starting to consider Porto. It offers all of the benefits of a small city, but it’s slightly less touristy and has a lower cost of living than Lisbon.
Whether you’re a resident, an expat, or a visitor, understanding the healthcare landscape in Portugal is essential. Here’s a comprehensive look:
Public Healthcare System (SNS – Serviço Nacional de Saúde):
- Accessibility: The SNS provides healthcare services to all Portuguese residents. It’s funded through taxation and ensures that everyone has access to essential medical services.
- Hospitals & Clinics: Public hospitals and health centers are spread across the country. While care quality is generally high, wait times for non-urgent procedures can be longer than in private facilities.
- Costs: Many services under the SNS are free or available for a nominal user fee. However, certain specialized treatments or medications might have associated costs.
- Facilities: Private hospitals and clinics often boast state-of-the-art equipment and shorter wait times. They are especially prevalent in urban areas.
- Insurance: While private healthcare is more expensive than public services, many residents and expats opt for private health insurance to cover potential costs. Several insurance providers offer varied plans tailored to individual needs.
While basic dental care is available under the SNS, many opt for private dental clinics for specialized treatments or cosmetic procedures. Dental insurance is also available through various providers.
Property: Renting Vs Buying
Whether you’re considering renting a quaint apartment in Lisbon or buying a villa along the Algarve coast, understanding the property market is crucial. Here’s what you need to know:
Renting in Portugal:
- Costs: Rental prices vary based on location, size, and amenities. Urban areas like Lisbon and Porto tend to be pricier than rural regions. Always factor in additional costs like utilities, service charges, and possibly a real estate agent’s fee.
- Lease Agreements: Standard lease agreements are for one year or longer but can be renewed. Ensure you read and understand all terms, especially regarding the notice period and any annual rent increases.
- Finding a Rental: While online portals (such as Idealista or Olx.pt) are a great starting point along with expat-focused Facebook groups, local newspapers and real estate agents can offer listings not found elsewhere.
Buying Property in Portugal:
- Property Types: From modern city apartments to traditional countryside homes and luxurious coastal villas, there’s a wide range of options to suit various preferences and budgets.
- Costs: Apart from the property price, buyers should account for taxes (like the Property Transfer Tax), notary fees, registration fees, and possibly a real estate agent’s commission.
- Legal Procedures: It’s advisable to hire a local lawyer when buying property. They’ll ensure the property is free of debts, handle contracts, and guide you through the legal intricacies.
- Financing: If you’re considering a mortgage, Portuguese banks offer loans to foreigners, though the terms and interest rates might differ from those for residents.
Education in Portugal
With a system that emphasises inclusivity and quality, Portugal offers a range of educational opportunities for both locals and expats. Here’s a deep dive into the Portuguese education landscape:
Structure of the Education System:
- Pre-primary Education (Educação Pré-Escolar): For children aged 3 to 6. While not mandatory, it’s widely available and often free in public institutions.
- Basic Education (Ensino Básico): Mandatory and lasts for nine years, divided into three cycles, covering ages 6 to 15.
- Secondary Education (Ensino Secundário): For students aged 15 to 18, this three-year phase prepares students for higher education or offers vocational training.
- Higher Education: Comprises universities and polytechnics, offering undergraduate, postgraduate, and doctoral programs.
Quality and Standards:
Portugal has made significant strides in improving its education system. The country participates in international assessments like PISA and has shown consistent progress over the years.
For expats or those seeking an international curriculum, Portugal boasts a range of international schools, primarily in major cities. These schools often offer the International Baccalaureate (IB) program or curricula from countries like the UK or the US.
Language of Instruction:
While Portuguese is the primary language of instruction, many higher education institutions offer courses in English, especially at the postgraduate level.
Tuition and Costs:
Public education is free up to the secondary level, though there might be some associated costs for materials. Higher education institutions charge tuition, but these fees are generally lower than in many other Western countries. Scholarships and financial aid are available for eligible students.
For those not pursuing traditional academic paths, Portugal offers robust vocational training programs, equipping students with skills for various industries.
Special Needs Education:
Portugal emphasizes inclusive education. Schools are equipped to accommodate students with special needs, ensuring they receive quality education tailored to their requirements.