How to Retire in Portugal: Retirement Visa, Costs, and Best Places  

Four changes since 2024 affect how you plan a retirement in Portugal: 

• On 1 January 2024, Portugal’s Non-Habitual Resident (NHR) tax regime closed to new applicants, and the 31 March 2025 deadline for eligible transitional applicants has also passed. The IFICI (Tax Incentive for Scientific Research and Innovation), also called NHR 2.0, replaced it. Instead of offering tax advantages to most new foreign residents and retirees, it targets highly skilled professionals, researchers, and workers in innovation-related fields. 

• In 2025, house prices in Portugal rose by 17.6%, the largest annual increase in official statistics records, boosting property values in many popular retirement destinations, such as the Algarve, Lisbon, and Cascais. 

• Since October 2025, most foreign residents in Portugal have needed to hold a valid residence permit for at least 2 years before applying for family reunification, including D7 holders. Minor or incapacitated children are exempt, as are holders of a Golden Visa, an EU Blue Card, or a highly qualified or cultural activity permit. If your spouse or partner lived with you for at least 18 months before you moved to Portugal, you can apply after 15 months of legal residence. 

• Since 19 May 2026, the Portuguese Nationality Law requires ten years of legal residence for most foreigners before they can apply for citizenship, up from five (seven years for EU and CPLP nationals). Applications submitted up to 18 May 2026 are assessed under the previous rules. 

Portugal is one of the most well-known retirement destinations in Europe because of its coastal living, sunny climate, and laid-back lifestyle.  

Many expats retire in Portugal, especially from the United States, the United Kingdom, Brazil, and various European countries, mainly Germany, France, and the Netherlands. 

In Global Citizen Solutions’ Global Intelligence Unit’s 2026 Global Retirement Report, Portugal ranks as fifth to retire in the world, thanks to its high quality of life, affordable cost of living, and favorable immigration policies for foreign retirees.  

It reaches an overall score of 99.3, ahead of Andorra (97.8), Italy (97.2), and Greece (95.9). 

There are many advantages to retiring in Portugal, from the beautiful coastal landscapes to the traditional Portuguese culture. But with every country, there are also some drawbacks.

Advantages 

Here are some of the main reasons Americans retire in Portugal: 

• Sunny weather: Portugal’s Mediterranean climate offers mild winters and long, sunny summers. 

• Safety: Portugal is one of the safest countries, ranking 7th on the 2026 Global Peace Index. 

• Healthcare: The public healthcare system (SNS) is accessible and low-cost, with most services free for registered residents and subsidized medication. 

• Lifestyle: Life in Portugal flows at a slower, more relaxed pace, which suits many retirees. 

• Warm and welcoming people: The Portuguese are known for their hospitality, and the country has a well-established expat community, especially in Lisbon, Porto, and the Algarve. 

• Lower cost of living: The overall cost of living in Portugal (including rent) is 31.7% lower than in the USA, 26.2% lower than in the UK, 20.1% lower than in Canada, and 18.7% lower than in France, as of June 2026. 

Disadvantages 

To decide whether Portugal is the right retirement destination for you, it is important to consider the downsides of retiring in Portugal, such as: 

• Complicated bureaucracy: The staff usually doesn’t speak English, and routine administrative tasks, visa processing, and appointments with Portugal’s immigration authorities (AIMA) can take longer than most foreigners expect. 

• Language barriers: Although many people speak English in major cities such as Lisbon, Porto, and Braga, that is not the case in many rural areas and smaller towns. 

• Increasing housing costs: Property prices in Portugal have risen sharply in recent years, especially in major cities and popular tourist destinations. 

• Cold homes in winter: Many older homes have no central heating or insulation, so winters indoors can feel colder than you’d expect. 

The income thresholds for the D7 Passive Income Visa are based on Portugal’s national minimum wage, which for 2026 is €920 per month (€11,040 annually) for the primary applicant. 

For each dependent adult, the income threshold increases to €460 per month (€5,520 annually), and for dependent minor children it reaches €276 per month (€3,312 annually). 

Documents you’ll need 

Whether it’s the D7 Visa, the Golden Visa or another residency visa, the primary documents that you’ll need for your application include: 

• Your passport 
• A criminal records certificate showing that you haven’t been convicted of serious crimes that carry a jail sentence of three or more years. 
• Proof that you have accommodation in Portugal for at least 12 months through a rental agreement, a property deed or a letter from a host. 
• Proof of where your income is from and that it was legally gained. For the D7 Visa, this can be rental income, royalties, pensions, or dividends.  
• Proof that you have health insurance that will cover you until you can apply for Portugal’s public healthcare. 
• Evidence that you have a Portuguese tax identification number and a Portuguese bank account.  
• The completed visa application form 

In most countries, you apply through VFS Global. However, if there isn’t a branch in your country, you must apply at the nearest Portuguese Consulate or Embassy. 

After the authorities approve your visa, you can travel to Portugal and finish the residence permit appointment with the AIMA (Agência para a Integração, Migrações e Asilo). 

Portugal Golden Visa requirements 

Since October 2023, real estate purchases no longer qualify for the Portuguese Golden Visa. Instead, you can choose between other investment routes, such as: 

• Venture capital or acquisition of investment funds: €500,000 

• Scientific activities of private or public entities: €500,000 (or €400,000 in low-density areas) 

• Cultural heritage or artistic production: €250,000 (or €200,000 in low-density areas) 

• Business creation or capital investment: €500,000 with a minimum of five full-time jobs, or creating at least 10 permanent jobs without the minimum investment amount 

To retire in Portugal from the USA, UK, or any other country, you need to take the right steps in the correct order. 

Step 1: Choose your location 

Decide where you want to retire based on your budget, climate preference, lifestyle, and healthcare access. We suggest you visit Portugal before settling in a particular location or researching the area online. 

Step 2: Choose your visa option 

Non-EU foreigners can retire to Portugal by applying for the D7 Visa (for passive income earners), the Portugal Golden Visa (for investors), and the D8 Visa (for digital nomads and remote workers), to name a few. 

Step 3: Obtain a NIF and open a local bank account 

You’ll need your Portuguese tax number (NIF) before you apply for the visa, so we suggest you get it three to six months before you plan to move. Most retirees open their Portuguese bank account at the same stage. 

Step 4: Provide proof of accommodation 

Your visa application requires a property deed or a lease contract to prove where you live. Many retirees sign a short-term rental contract to obtain a visa and find long-term housing after moving to Portugal. 

Step 5: Apply for your visa at the Portuguese Consulate 

Submit your application at the Portuguese Consulate or its visa center in your country of residence, with the documents listed in the visa options section of this article. Migration specialists like Global Citizen Solutions can collect and prepare these documents for you. 

Step 6: Arrive in Portugal and get your residence permit 

Your initial residency visa is usually valid for four months. At this stage, you attend a residence permit appointment with the AIMA, and your first residence permit is then issued for two years. 

Step 7: Apply for public healthcare 

Go to your local health center (Centro de Saúde) with your residence permit, passport, NIF, and proof of address to register with the SNS and receive your user number (Número de Utente). 

Step 8: Set up your Portuguese tax residency status 

Once you live in Portugal, update your address with the Portuguese Tax Authority so your NIF shows you as a tax resident. Talk to a tax advisor to get professional advice on your tax obligations with the Portuguese tax authorities and your home country. For example, the IRS for US citizens, HMRC for UK citizens, and Agencia Tributaria for Spanish nationals. 

After you decide to retire in Portugal, there are a few practical steps you need to prepare for. The first one is to apply for a Portuguese tax number (NIF), which you will need for all fiscal activities in the country, including opening a local bank account. 

Getting a Portuguese NIF 

The NIF is one of the main administrative requirements for retirement in Portugal.  

It works in a very similar way to a Social Security Number (SSN) in the United States, such as for paying taxes, signing rental agreements, buying property, or setting up utilities. 

To obtain a NIF in Portugal, you need a valid passport and proof of address, either in Portugal or abroad. You can apply for a NIF at the Serviço de Finanças (local tax office), Loja do Cidadão (citizen’s shop), or online, often with the help of a fiscal representative. 

Processing can take five to ten business days when you apply for a NIF online, while with in-person applications, you can get your NIF the same day. The application itself is free. 

If you’re a non-EU/EEA/Swiss citizen and not yet resident in Portugal, you need to appoint a fiscal representative, unless you sign up to receive tax notifications electronically.  

Our team of migration consultants at Global Citizen Solutions can apply for a NIF on your behalf and coordinate with government services. 

Opening a Portuguese bank account 

If you are retiring in Portugal from the USA, we suggest you open a Portuguese bank account to reduce transaction costs.  

You can use it to pay the bills, apply for a mortgage, transfer money, receive private pensions, and manage daily transactions. 

Portugal’s banking system is overseen by the Banco de Portugal (Bank of Portugal). Banks that serve international clients include Millennium BCP, Novo Banco, and ActivoBank, to name a few.  

Portuguese banks ask US citizens for additional documents, such as a Form W-9, because of FATCA reporting requirements, 

Most ATMs in Portugal run on Multibanco, the national interbank network, which you can also use to pay bills and make transfers. To open a Portuguese bank account, you must provide your Portuguese tax number (NIF), personal ID, proof of address, and proof of income. 

Healthcare for retirees 

The public healthcare system in Portugal is called Serviço Nacional de Saúde (SNS) and is available to registered residents and citizens.  

Once retirees have a free SNS utente number, they can access reliable medical care with no fees attached to health center consultations or diagnostic tests. While there are small fees for emergency care, these fees are often waived when SNS referred the patient beforehand or if the patient requires hospital care. 

Most medications are heavily subsidized or free, and co-payments for prescription medication are often no more than 10%. Portugal also has a special medication co-payment scheme (RECM) for low-income retirees, where medication is discounted up to 95%.  

Private healthcare is also available for residents, and many retirees choose it over SNS. There is greater access to specialized doctors, waiting times are often much shorter, and coverage extends beyond what public healthcare can provide.  

While it differs by provider, private medical aid is usually between €25–€60 per month for basic coverage and €80–€150 per month for comprehensive plans. For additional fees, retirees can get oncology, dental and optometrist coverage. 

If you receive a UK State Pension, you may be entitled to an S1 form, which lets you register for healthcare in Portugal with the UK covering the cost. 

Medicare does not cover medical costs in Portugal, which means expats need to purchase private health insurance when they retire abroad. 

The cost of living in Portugal is more affordable than in much of Western Europe and the United States. A single retiree in a small town can budget around €350 to €550 per month for expenses, and rent is about €600 to €900, depending on the region. 

The table below covers the costs of popular food and drinks in Portugal. 

Source: Numbeo, September 2026

Here is a comfortable monthly budget for single retirees living in Portugal (2026), including housing:

Source: Numbeo, Idealista

This monthly budget is a general estimate for a comfortable standard of living in Portugal. It takes into account decent housing options, dining out a couple of times a week, private medical insurance, and occasional travel. 

When retiring in Portugal, one of the first questions many of our clients ask is whether to rent or buy property. 

Buying 

According to Numbeo, the average asking price for homes in Portugal is €3,142 per square meter. However, property prices vary by location, with areas such as Lisbon, the Algarve, and Porto often exceeding the national average. 

Buying property in Portugal is a long-term commitment. Owning property gives you stability, and prices have risen strongly in recent years, but you are also responsible for property maintenance. 

Keep in mind that additional expenses, such as notary and registration fees, Stamp Duty, and legal fees, add about 6% to 10% to the final purchase price.  

So, factor in the Property Transfer Tax (IMT), Stamp Duty, and the annual Municipal Property Tax (IMI) before you decide to make a purchase. 

Renting 

Typical monthly rents outside the main cities range from €730 to €920, and rents in Lisbon, Porto, and the Algarve are higher. 

Renting can be a better choice for retiring in Portugal if you are not sure where you want to live. You can rent properties to explore different areas, cities, or towns. 

It needs less money upfront, and the landlord is responsible for taking care of any major repairs or property maintenance. 

Whether you choose to rent or buy property in Portugal depends on your long-term plans and whether you want to settle in a particular area. 

Your Portuguese residence permit and your tax residency are two separate things. Getting a temporary residence permit doesn’t automatically make you a tax resident in Portugal. 

To become a Portuguese tax resident, you need to spend more than 183 days in Portugal during any 12-month period, or have a home in Portugal that you intend to keep as your habitual residence.  

In the year you move, you’re generally taxed as a resident only from the date you arrive. 

As a Portuguese tax resident, you’re taxed in Portugal on your worldwide income, which can include foreign pensions and investment income. You declare it to the Portuguese Tax Authority (Autoridade Tributária e Aduaneira, AT). 

The exact tax rates vary based on the Portuguese tax rules and whether your home country has a double taxation agreement with Portugal. 

Portugal’s inheritance law and wills 

An important part of planning your retirement in Portugal, especially if you hold assets across multiple countries, is understanding how inheritance works. 

In Portugal, inheritance follows a forced heirship model, where the closest living family members are legally entitled to a share of the estate. This is regardless of what the terms in the will dictate, and applies to any spouse and children, and in specific cases, even parents.   

Portugal does not have a standard inheritance tax, such as in the UK, Spain, or Germany. Instead, in Portugal, there is often a 10% Stamp Duty tax (Imposto do Selo) on inheritances and gifts. 

Close family members such as spouses or children are exempt from the Stamp Duty, while it must be paid by more distant relatives. However, anyone who inherits Portuguese property must still declare the inheritance to the Tax Authority, and other costs such as registration fees may apply.  

In cases where a will wasn’t drawn up, Portuguese succession law dictates how your assets will be divided.  

Take a look at our Taxes in Portugal Ultimate Guide

Click Here

Even though the United States and Portugal have a Double Taxation Treaty (DTT), Portugal doesn’t treat every type of income the same way. 

Here are the different tax considerations for US retirees living in Portugal. 

Private pensions 

If you receive income from a 401(k), IRA withdrawals, or another private pension while living in Portugal, you need to report that income in both the United States and Portugal.  

Portugal taxes pension income at progressive rates, while there is an additional surcharge on higher-band income. Portugal’s double taxation treaty with the US can lower the risk of being taxed twice, based on several factors. 

Portugal’s personal income tax 

In Portugal, residents pay taxes on all their worldwide income under progressive IRS tax rates from 12.5% to 48% (as of 2026), with the highest rate applying to taxable income above €86,634. 

Social Security 

If you receive US Social Security benefits while living in Portugal, you often pay tax only to the United States. Portugal usually does not tax your Social Security income. 

Government-service pensions 

If you receive a pension from US federal employment, military service, or certain state and local government positions, the DTT allows only the United States to tax that income. In most cases, Portugal does not tax these government-service pensions. 

Investment income 

You may pay taxes on dividends, rental income, and capital gains in both countries, depending on the source of the US retirement income and how each country classifies it. 

While profit from real estate and other assets are taxed under progressive rates or different rules, Portugal’s personal capital gains tax rate is usually 28%. However, Portugal does have a double taxation treaty with the US, offering tax credits based on: 

• Investment type 
• Source of income 
• Income classification in each country 
• Where the asset is held 

NHR vs IFICI: What changed for retirees? 

Portugal’s Non-Habitual Resident (NHR) regime closed for new applications in December 2023.  

The program offered a flat 20% rate on Portuguese-sourced income from high-value activities and 10% on foreign pension income, with some exceptions. 

Portugal replaced NHR with IFICI (Incentivo Fiscal à Investigação Científica e Inovação), also known as the NHR 2.0.  

This new incentive is for highly skilled professionals who can contribute to the Portuguese economy, such as researchers, start-up founders, and university professors. 

Under IFICI, qualifying employment (Category A) or self-employment (Category B) income from eligible activities is taxed at a flat 20%. Most foreign-source income is exempt, but foreign pensions are not, and they’re taxed at the standard progressive rates. 

Most retirees do not qualify for IFICI. If your Portugal retirement strategy previously relied on the NHR program, we suggest consulting a tax advisor familiar with both US and Portuguese tax laws. 

IRS reporting requirements 

Moving to Portugal does not end your US tax obligations. As a US citizen, you must continue to file your annual taxes with the IRS regardless of how long you live abroad. 

The most common forms US citizens use to file taxes include: 

• Form 1040: This is your main US tax return. It reports all your worldwide income (pensions, investments, wages, etc.), even if you live in Portugal. 
• Form 2555: If you earn an income from a foreign country, this form lets you exclude a portion of your income, excluding pensions and investments. 
• Form 1116: This is a form you can use to claim a Foreign Tax Credit so you don’t get taxed twice on the same income. 
• Form 8938: This reports your foreign financial assets (like foreign bank accounts, pensions, or investments) if they go over certain IRS thresholds. It is part of the FATCA requirements. 
• FBAR (FinCEN Form 114): This form reports foreign bank and financial accounts if the total value exceeds $10,000 at any point during the year. It is filed separately from your tax return.