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

• On 1 January 2024, Portugal’s Non-Habitual Resident (NHR) tax regime ended, and the 31 March 2025 deadline for eligible transitional applicants has also passed. This program was replaced with the IFICI (Tax Incentive for Scientific Research and Innovation), also called the NHR 2.0, which, instead of offering tax advantages to most new foreign residents and retirees, it now targets highly skilled professionals, researchers, and workers in innovation-related fields.
• In 2025, the House Price Index (HPI) rose by 17.6 percent, according to Statistics Portugal (INE), boosting property values in many popular retirement destinations, such as the Algarve, Lisbon, and Cascais.
• Since October 2025, most foreign residents in Portugal need to hold a valid residence permit for at least two years before they apply for family reunification. There are exemptions to this two-year rule for minor or incapacitated children and for residents with a Golden Visa, an EU Blue Card, or a Highly Qualified Visa. There are some examples in which partners who lived together for at least 18 months before arriving to Portugal can apply for family reunification after 15 months of legal residency.
• On 3 May 2026, the Portuguese Nationality Law officially increased the citizenship timeline from 5 to 10 years for most foreigners (or 7 years for EU/CPLP nationals).

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 fact, in our Global Intelligence Unit’s Global Retirement Report, Portugal ranks as the no.1 country to retire in the world, thanks to its high quality of life, affordable cost of living, and favorable immigration policies for foreign retirees.

The Global Citizen Solutions (GCS) report explains that Portugal has a lot to offer with its safety, tax optimization, and economic opportunities, reaching an overall score of 92.61. Portugal outranks many top retirement destinations, such as Mauritius (89.24), Spain (88.52), Uruguay (88.05), and Austria (87.92).

After you decide to retire in Portugal, there are a couple of 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 number  

The Portugal NIF (Número de Identificação Fiscal) 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 must provide a valid passport, proof of address in Portugal, and a document that shows your Portuguese residency status. 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 10 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.

Fiscal representation in Portugal is legally required for remote applications if you are a non-EU/EEA/Swiss citizen and not a resident in Portugal. 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 the transactional 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 reliable, overseen by the Banco de Portugal (Bank of Portugal). Some of the best banks that cater to American retirees in Portugal include Detailed Profiles, Millennium BCP, Novo Banco, and ActivoBank, to name a few.

According to Statista, there are about 13,664 ATMs in Portugal, most of which are operated by Multibanco (Portugal’s interbank network). To open a Portuguese bank account, you must provide your Portuguese tax number (NIF), personal ID, proof of address, and proof of income.

When retiring in Portugal as an American, one of the first questions that many of our clients ask is whether they should rent or buy property in Portugal.

Buying

As of May 2026, the average asking prices in Portugal are €3,142 per square meter, according to Idealista data. However, each location has a different property price, with areas such as Lisbon, Algarve, and Porto often exceeding the national average.

Buying property in Portugal is a long-term commitment and a solid investment. Owning property gives you stability and strong potential for capital appreciation. But that also means you are responsible for property maintenance.

Keep in mind that additional expenses, such as Notary and registration fees, property taxes, and legal fees, add about 6 to 10 percent to the final purchase price. So, factor in the Property Transfer Tax (IMT), Stamp Duty, and Annual Municipal Property Tax (IMI) before you decide to make a purchase.

Renting

Rental prices in Portugal vary from €730 to €920, while in major cities, the rents are more expensive.

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

It is more affordable, and the landlord is responsible for taking care of any major repairs or property maintenance.

All in all, 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.

The cost of living in Portugal is more affordable than in much of Western Europe and the United States.

A single retiree needs a monthly budget of around €650–€850 in smaller towns and roughly €750–€1,000+ without including rental prices. A retired couple often spends about €1,100–€1,500 outside major cities in Portugal.

As of June 2026, Portugal’s living expenses for retirees are 29.8 percent lower than in the USA, 28 percent more affordable than the UK, and 27.2 percent cheaper than in France (excluding rent).

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

Source: Numbeo, June 2026

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

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

Taxes in Portugal for US retirees can be difficult to understand for those who retire to Portugal for the first time. 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.

Fortunately, the US–Portugal tax treaty can reduce the risk of double taxation through foreign tax credits and other relief measures.

The order in which each country taxes your pension income depends on your account type, income level, and individual tax situation.

Portugal’s personal income tax

In Portugal, residents pay taxes on all their worldwide income under progressive IRS tax rates from 12.5 percent to 48 percent (as of 2026), with the highest rates for those who earn more than €86,634.

If you are earning more than the average Portuguese salary, you should consider the Portuguese tax rates in your financial plan before you relocate.

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.

Because of this advantage, many retirees consider Social Security separately when planning their retirement in Portugal. However, since every case is different, we suggest you consult with a cross-border tax advisor before moving to Portugal.

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.

Portugal’s personal capital gains tax rate is often 28 percent, though gains from real estate and other assets may be taxed under different rules or progressive rates.

On the other hand, pension income in Portugal is treated as regular income, which means you are subject to progressive tax rates (i.e., 12.5 to 48 percent). There are also some potential surtaxes based on how much you earn. The US–Portugal Double Taxation Treaty offers foreign tax credits to prevent double taxation, but the final outcome depends on:

• How each country classifies the income
• The type of investment
• The source of the income
• Where you hold the asset

NHR vs IFICI: What changed for retirees?

On 31 December 2023, Portugal closed the Non-Habitual Resident (NHR) regime for new applicants. The program offered a 20 percent tax rate on certain Portuguese-sourced income and a 10 percent 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, to name a few. The NHR 2.0 is more value-driven, seeking to attract a talented workforce to the country.

Under NHR 2.0, income derived by qualified professionals – either from employment (Category A) or self-employment (Category B) – is taxed at a flat rate of 20 percent, rather than the standard progressive income tax rates. All other Portuguese-sourced income is taxed at the standard tax rates.

Most retirees do not qualify for IFICI. If your Portugal retirement strategy previously relied on the NHR program, we suggest consulting with a tax advisor who is familiar with both the 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: This lets you exclude some foreign-earned income from US tax (like salary or self-employment income). It does not apply to pensions or investment income.
• 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 reports foreign bank and financial accounts if the total value is more than $10,000 (€8,700) at any point during the year. It is filed separately from your tax return.

The forms you need depend on your income sources, assets, and account types. Because pension, investment, and foreign account reporting rules vary, there is no “one-size-fits-all” approach.

When retiring in Portugal, you need to know the difference between Portuguese tax residency and your residence permit or visa. Many foreigners believe that by obtaining a temporary residency permit, they automatically become tax residents in Portugal. But that’s not the case.

To become a Portuguese tax resident, you need to spend more than 183 days in Portugal during any 12-month period or have a permanent residence in Portugal.

As a Portuguese tax resident, you often submit your worldwide income to the Autoridade Tributária e Aduaneira (AT), Portuguese tax authorities. This can include taxes on foreign pensions, investment income, and Social Security benefits, among others.

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.

Portuguese inheritance law follows a forced heirship system, meaning that certain close family members are entitled to a protected share of your estate regardless of the terms of your will.

Spouses, children, and, in some specific cases, parents are entitled to this reserved portion, which can limit how freely you distribute your assets. Portugal does not have a standard inheritance tax, such as in the UK, Spain, or Germany. Instead, in Portugal, there is often a 10 percent Stamp Duty tax (Imposto de Selo) on inheritances and gifts.

Spouses, civil partners, children, grandchildren, parents, and grandparents are exempt from this tax, while more distant relatives or unrelated beneficiaries are generally subject to it.

If you do not have a valid will, Portuguese succession law determines how your estate is distributed. Under the EU Succession Regulation, you may elect the law of your nationality to govern your estate. However, Portuguese tax registration and property-transfer rules will still apply to assets located in Portugal.

To retire in Portugal from the USA, UK, or any other country, you need to take the right steps and in the correct order. Moving to Portugal requires careful planning, budgeting, and research.

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 you settle in a particular location or research 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), Portugal Golden Visa (for investors), D8 Visa (for digital nomads and remote workers), to name a few.

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

We suggest you get your Portuguese tax number (NIF) three to six months before you move to Portugal, but you can also apply for it immediately after arriving.

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 the visa and find long-term housing after they move to Portugal.

Step 5: Apply for residence at the Portuguese consulate

Migration specialists like Global Citizen Solutions can collect all the necessary documents for your visa application: Proof of accommodation, proof of income, private medical insurance, a clean criminal record, and a valid passport.

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.

Step 7: Apply for public healthcare

Go to your local health center (Centro de Saúde) with your Portuguese tax number (NIF), proof of address, and residence card to register for public healthcare and receive your patient card (Cartão de Utente).

Step 8: Set up your Portuguese tax residency status

Talk to a tax advisor to get professional advice on your tax obligation 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.