Retiring abroad is an enticing option for many people, especially in countries that offer sunny weather, rich cultures, and appealing living conditions.
Spain and Portugal consistently rank among the top choices for retirement in Europe, each offering unique advantages for retirees looking for quality, affordability, and a fulfilling lifestyle. Retiring in Portugal may be better for those prioritizing lower costs, simpler residency, and a strong English-speaking expat community, particularly in the Algarve.
Retiring in Spain might appeal to retirees seeking cultural variety, larger cities, extensive modern infrastructure, diverse landscapes, and a more complex but globally-ranked healthcare system. The ultimate choice depends on individual priorities regarding budget, lifestyle, culture, and preferred living environment.
In this article, we’ll take a look at how each country compares in terms of retirement, so that you can make the best decision on where to spend your golden years.
You’ll also learn more about:
- Comparing Portugal to Spain for retirement
- Retirement visa options
- Benefits of Portugal’s D7 vs. Spain’s Non-Lucrative Visa
- Taxation implications for retirees
- Best places to retire in Portugal
- Best places to retire in Spain
Comparing Portugal to Spain for Retirement
In our Global Intelligence Unit’s latest Global Retirement Report, Portugal scored top marks to come in first place, while Spain came in third place.
The report notes that even though Europe has 14 programs across the continent, southern Europe (Portugal, Spain, Italy, and Greece) stands out for its exceptional quality of life, high acceptance of international residents, and offering clear paths to long-term residency or even citizenship.
Here’s how Portugal and Spain compare across the key categories that matter most to retirees, such as climate and safety, to the cost of living and healthcare quality.
Language
Portugal
English is widely understood in urban centers and tourist-heavy areas such as Lisbon, Porto, and the Algarve, which makes the transition easier for retirees who don’t speak Portuguese.
However, in smaller towns and rural areas, Portuguese is the primary language and essential for day-to-day life. Spanish is taught in schools but not widely spoken, so retirees planning to integrate fully will benefit from learning at least conversational Portuguese.
Spain
In Spain, English proficiency varies more by region and age group. Popular coastal areas such as the Costa del Sol, Costa Blanca, and Balearic Islands have large expat communities where English is common, particularly in services catering to foreigners.
In inland regions, however, Spanish is the norm, and some knowledge of the language becomes more important for navigating bureaucracy, healthcare, and local culture.
Real Estate and Housing
Portugal
Portugal’s property market offers good value compared to many Western European countries, though prices have risen sharply in Lisbon, Porto, and the Algarve due to foreign demand.
Coastal towns outside the main tourist hotspots still offer affordable options, with small apartments starting from around €150,000 and rural homes often costing less. The buying process is straightforward, with strong legal protections for foreign buyers, and property taxes are relatively low.
Spain
Popular retirement areas like the Costa del Sol and Costa Blanca have a high supply of apartments and villas geared toward foreign buyers, sometimes at lower prices than equivalent homes in Portugal’s Algarve.
Inland Spain offers some of the lowest property prices in Western Europe, particularly in small towns. Transaction costs can be slightly higher than in Portugal, but the market is well-regulated and transparent, and the availability of English-speaking estate agents in expat regions can make the process smoother for foreign retirees.
Weather
Both countries offer plenty of sunshine and comfortable winters compared to northern Europe, but there are key differences in seasonal temperatures and rainfall.
Southern Spain generally runs hotter in summer, while Portugal’s Atlantic influence keeps coastal areas slightly cooler and breezier.
Winter temperatures on Spain’s Mediterranean coast tend to be a degree or two warmer than in Portugal, but both enjoy far milder conditions than much of Europe.
Below is a direct, side-by-side comparison so you can see exactly what to expect throughout the year.
| Season | Portugal Coastal South (Algarve) | Portugal Lisbon Area | Spain Costa del Sol (Málaga) | Spain Valencia Area |
|---|---|---|---|---|
| Summer (Jun–Aug) | Day: 26–33°C Night: 18–22°C | Day: 25–34°C Night: 17–20°C | Day: 28–35°C Night: 20–24°C | Day: 28–34°C Night: 20–23°C |
| Winter (Dec–Feb) | Day: 15–18°C Night: 7–10°C | Day: 14–17°C Night: 6–9°C | Day: 16–19°C Night: 8–11°C | Day: 15–18°C Night: 6–9°C |
| Annual Sunshine Hours | ~3,000 | ~2,800 | ~2,900 | ~2,800 |
| Annual Rainfall | ~500 mm | ~775 mm | ~500 mm | ~450 mm |
Cost of living
Portugal and Spain both offer relatively affordable costs of living compared to other Western European countries, but the cost of living in Portugal generally has a slight edge in terms of affordability.
Portugal
Cities such as Lisbon and Porto, while increasingly popular and experiencing rising prices in recent years, still offer comparatively lower costs for rentals, dining, and entertainment than similar-sized cities in Spain.
Rural and smaller coastal towns in Portugal, especially in regions like the Alentejo or the northern Minho, provide even more cost-effective living options, often significantly cheaper than their Spanish counterparts.
Spain
Spain also presents a reasonable cost of living, though prices tend to be slightly higher, especially in major cities such as Madrid, Barcelona, and Bilbao.
While housing costs in these urban centers are notably higher compared to Lisbon and Porto, expenses such as groceries, transportation, and leisure activities remain relatively affordable.
Spain’s regions vary significantly in terms of costs; southern regions like Andalusia can offer living expenses similar to Portugal, while northern regions or major urban hubs may stretch budgets further. Overall, while both countries provide good value, Portugal consistently stands out as the more budget-friendly option for most aspects of daily living.
According to Numbeo, the average monthly living costs in Portugal for a single person hover around €700 excluding rent. With the average rental price of €922 for a one-bedroom apartment in a city center, retirees can expect to spend around €1,700 per month.
Spain’s cost of living is slightly higher at approximately €1,822, which includes rent in a city center for a one-bedroom apartment at an average monthly rate of between €700 and €900.
| Category | Portugal (Avg. €) | Spain (Avg. €) | Difference |
|---|---|---|---|
| Meal, inexpensive restaurant | €11.00 | €14.00 | Spain +27% |
| Monthly public transport pass | €40.00 | €30.00 | Spain -25% |
| Basic utilities (85m² apartment) | €114.84 | €130.71 | Spain +14% |
| Internet (60 Mbps+, unlimited) | €36.78 | €29.24 | Spain -21% |
| 1-bedroom apartment (city center) | €922.18 | €891.39 | Spain -3% |
| Price/m² to buy in city centre | €3,471.22 | €3,726.83 | Spain +7% |
| Average monthly net salary (after tax) | €1,040.26 | €1,730.62 | Spain +66% |
| Mortgage interest rate (20-year fixed) | 4.78% | 3.49% | Spain -27% |
Safety
Portugal
Portugal consistently appears at the top of global safety indexes, known for its peaceful environment, low crime rates, and stable social climate, particularly in cities like Lisbon, Porto, and Faro. According to the living costs in Portugal, Portugal is ranked 7th.
The main safety concern is petty theft, such as pickpocketing, especially in tourist-heavy areas. However, violent crime rates are extremely low, making Portugal highly appealing to expatriates, tourists, and digital nomads.
Spain
Spain also maintains a high standard of safety but experiences more frequent reports of petty crime, particularly in crowded urban centers like Madrid, Barcelona, and popular coastal towns. Spain ranks 25th on the Global Peace Index.
Although serious crimes are relatively rare across Spain, incidents of pickpocketing or theft occur more commonly, especially in tourist-dense locations like Las Ramblas in Barcelona and Puerta del Sol in Madrid.
Despite these issues, both countries provide environments where vigilance, rather than anxiety, is the key approach to safety, reflecting their overall peaceful and welcoming atmospheres.
Healthcare
Portugal
Portugal’s healthcare system, provided by the Serviço Nacional de Saúde (SNS), is widely praised for its affordability, accessibility, and the competence of its medical professionals.
Residents and expatriates often have access to low-cost or even free treatments; however, waiting times for some non-emergency procedures can be lengthy.
Many choose affordable private healthcare plans to supplement public healthcare. These plans allow for quicker access to specialists and procedures, as well as increased comfort and convenience. Basic plans start under €120 per month, with average annual premiums around €400, while comprehensive coverage can be approximately €1,000 per year.
Spain
It features excellent facilities, advanced medical technologies, and highly trained professionals, particularly in urban centers like Madrid, Barcelona, and Valencia. Public hospitals in Spain generally offer shorter waiting times for specialist consultations than those in Portugal, especially in larger cities.
Private healthcare is also popular in Spain, providing faster access to specialized care and comfortable hospital environments, though the public system is highly reliable and widely used by both locals and expatriates. Private health insurance typically costs between €50 and €100 per month.
Leisure and entertainment
Portugal
Portugal is known for offering diverse and lively experiences. In Lisbon, neighborhoods like Bairro Alto and Cais do Sodré are famous for their bars and cafes, while Porto boasts a flourishing art scene and enjoyable riverfront activities.
Live music: Some of the largest festivals in Portugal include NOS Alive, MEO Kalorama, Rock in Rio
Wine country: The Douro Valley, Alentejo, and Dão regions offer more than wine tastings — they’re a gateway to rural traditions, slow travel, and seasonal festivals. Retirees often take day trips or join wine clubs for regular events.
Thermal spas: Portugal has several historic spa towns like Caldas da Rainha, Chaves, and Luso, known for mineral-rich waters and therapeutic treatments. Many retirees plan seasonal visits for wellness and relaxation.
Spain
Similarly, Spain’s leisure and entertainment options are expansive, vibrant, and varied, mirroring its larger size and diverse regional cultures. Madrid and Barcelona serve as international hubs for nightlife, cultural events, and festivals.
Madrid’s energetic Malasaña and Barcelona’s bustling Gothic Quarter provide an almost endless array of bars, clubs, and live music venues.
Live music: Some of the largest festivals in Spain include Primavera Barcelona, Bilbao Live, Sonar and BBK Live.
IMSERSO travel program: Spain’s government offers heavily subsidized off-season holiday packages for pensioners, including transport, hotels, and excursions. It’s a favorite for exploring the country without breaking the bank.
Allotment gardening (Huertos Urbanos): Many municipalities rent out small urban garden plots where residents can grow vegetables. These become social hubs for retirees with a love of gardening.
Public transport
Portugal
The national rail service, Comboios de Portugal (CP), connects most regions, with high-speed Alfa Pendular trains linking Lisbon, Porto, and the Algarve, while regional trains serve smaller towns at low cost. Intercity buses reach areas the trains don’t, often more frequently.
Urban taxis and ride-hailing apps like Bolt and Uber are widely available and inexpensive compared to northern Europe. While rural areas have less frequent service, many retirees combine occasional car use with public transport for trips to cities and regional hubs.
Spain
Spain’s public transport system is extensive, modern, and generally affordable, making it easy for retirees to travel without relying on a car. Major cities such as Madrid, Barcelona, Valencia, and Seville have well-developed metro networks, buses, and trams, with senior discounts (often 30–50 percent off) available through travel cards.
Renfe, the national rail operator, runs high-speed AVE trains linking key cities like Madrid, Barcelona, Málaga, and Valencia in just a few hours, while regional and commuter lines connect smaller towns.
Long-distance buses offer comfortable and economical travel to areas not served by rail, often with more frequent departures. In coastal and tourist regions, local bus networks are reliable and inexpensive, and many municipalities offer special pensioner passes.
Taxation Implications for Retirees
Portugal
Until 2024, Portugal’s Non-Habitual Resident (NHR) regime allowed many foreign retirees to pay a flat 10 percent tax on foreign pensions. With NHR now gone, foreign pension income is taxed under Portugal’s standard progressive rates, starting at 14.5 percent and reaching up to 48 percent for income above €81,199.
Social security pensions from abroad are generally treated the same as domestic pensions, although double taxation treaties can reduce withholding in the source country.
Portugal does not levy a general wealth tax, but it does apply an annual municipal property surcharge (AIMI) of 0.7 percent on the Portuguese portion of an individual’s real estate valued above €600,000 (higher for corporate ownership).
There is no inheritance tax for spouses or direct descendants, only a flat 10 percent stamp duty for other heirs.
Spain
Pension income from abroad is fully taxable unless exempt under a double taxation treaty, which usually still requires declaring the income in Spain. Capital gains and investment income are taxed separately at 19 percent to 28 percent, depending on the amount.
Spain also levies a wealth tax on worldwide assets for residents, with rates from 0.2 percent to 3.5 percent, although some regions — notably Madrid and Andalusia — offer 100 percent relief. Inheritance and gift tax also varies by region, with reductions for close relatives ranging from modest to near-total exemptions.
Spain does have a Special Expat Regime, but it does not apply to most retirees; it is designed for workers who become Spanish tax residents due to a job offer and allows taxation only on Spanish-source income for six years.
Retirement Visa Options
Portugal
Portugal’s D7 Visa is designed for non-EU citizens who wish to establish residency in Portugal based on stable passive income. It requires applicants to demonstrate a minimum monthly passive income of €870 through incomes such as pensions, rental income, dividends, or savings.
Portugal’s D7 Visa also allows retirees straightforward access to residency and eventual Portuguese citizenship after five years (for now) of continuous residency.
Another option is Portugal’s Golden Visa. It is a five-year residency by investment initiative for non-EU nationals, with a minimum required investment starting at €200,000 for a donation to the arts, while venture capital funds start at €500,000 – among others.
Spain
Spain’s Non-Lucrative Visa is a residency permit for non-EU nationals who want to live in Spain without engaging in any work or professional activities, including remote employment for non-Spanish entities.
It is tailored for individuals who can prove they have sufficient financial means to support themselves and any dependents indefinitely without needing income from Spanish sources.
Spain’s program explicitly prohibits any form of employment, including freelance or remote work for non-Spanish companies, making it less flexible for digital nomads but ideal for those fully retired or financially independent.
Benefits of Portugal’s D7 vs. Spain’s Non-Lucrative Visa
Since Portugal and Spain are both part of the Schengen Area, the benefits of the D7 Visa and the Non-Lucrative Visa are quite similar.
Visa-free travel: Holders of either the D7 Visa or the Non-Lucrative Visa can travel freely within the Schengen Area and the European Union without needing additional visas or travel permits.
Family reunification: Both Portugal and Spain permit the main applicant to bring family members, including spouses, children under 18, dependent parents, siblings, or children over 18, who will also enjoy similar benefits.
Applying for citizenship: After living legally in Portugal for five years (at the time of writing), you can apply for either permanent residence or citizenship. In contrast, in Spain, you can apply for citizenship only after residing there for 10 years.
Access to public services: As a legal resident holding the appropriate visas, you are entitled to access national health insurance services and the educational systems available in the country.
Permanent residence: After five years of holding either the D7 Visa or the Non-Lucrative Visa, individuals become eligible to apply for permanent residency.
Best Places to Retire in Portugal
2. Lisbon: The capital offers a more cosmopolitan retirement experience. While it’s pricier than other regions, retirees enjoy excellent infrastructure, cultural events, international cuisine, and top-tier hospitals. Public transport is also extensive and senior-friendly.
3. Cascais: Just outside Lisbon, Cascais combines beach town charm with urban convenience. It’s ideal for those who want proximity to the capital without the noise. The marina, golf courses, and coastal boardwalk make it a lifestyle destination.
4. Porto: Portugal’s second city is more affordable than Lisbon but equally rich in history, food, and architecture. With a slightly cooler climate and a growing expat presence, Porto is a great option for those looking for an authentic yet accessible Portuguese lifestyle.
5. Coimbra: Home to one of Europe’s oldest universities, Coimbra offers a blend of intellectual vibrancy and affordability. The city has a relaxed pace and a strong public healthcare system, making it appealing for retirees who prefer a smaller, quieter environment.
Best Places to Retire in Spain
2. Valencia: Spain’s third-largest city offers an ideal balance of culture, coastline, and cost-effectiveness. It’s less crowded and more affordable than Madrid or Barcelona, with excellent healthcare and a laid-back Mediterranean vibe.
3. Alicante: Located on the Costa Blanca, Alicante offers affordable property, scenic beaches, and a lively expat network. Its compact city center, good transport links, and mild climate make it especially easy to navigate for older residents.
4. Granada: For retirees drawn to history, mountains, and Moorish architecture, Granada delivers. While it’s inland, it’s just an hour from the Mediterranean. The cost of living is lower, and tapas culture thrives here, often with free small plates served with drinks.
5. Palma de Mallorca: If island life appeals to you, Palma combines natural beauty with solid healthcare, direct flights to mainland Europe, and a sophisticated culinary and cultural scene. It’s more expensive than mainland Spain but also more exclusive and serene.
Spain vs. Portugal: How to Choose
Choosing between Portugal and Spain for retirement ultimately comes down to your personal priorities and lifestyle preferences.
If affordability, a slower pace of life, and access to a relatively simple residency path are top of mind, Portugal may have the edge. On the other hand, Spain offers more diversity in urban environments, a larger expat population, and a vibrant cultural scene with broad regional variety.
| Category | Portugal | Spain |
|---|---|---|
| Language | High English proficiency in cities and tourist areas; Portuguese essential in rural regions | English common in major expat hubs; Spanish essential inland |
| Real Estate and Housing | Smaller market, good value; €150k+ for small apartments in less touristy areas; lower property taxes | Larger market, wider variety; inland areas among cheapest in Western Europe; slightly higher transaction costs |
| Weather | Coastal summer days: 26–33°C; winter days: 15–18°C; ~3,000 sunshine hours per year in Algarve | Coastal summer days: 28–35°C; winter days: 16–19°C; ~2,900 sunshine hours per year in Costa del Sol |
| Cost of Living examples | Meal out €11; 1-bed city apartment €922; utilities €114.84; internet €36.78 | Meal out €14; 1-bed city apartment €891; utilities €130.71; internet €29.24 |
| Global Peace Index | Ranked 7th; very low violent crime | Ranked 25th; low violent crime but more petty theft in tourist areas |
| Healthcare | Affordable public system; longer wait times; private plans from €120 per month | High-quality public system; shorter wait times; private insurance €50–€100 per month |
| Public Transport | Reliable in cities; national trains link major regions; less frequent rural service | Extensive, modern network; high-speed AVE trains; more senior discounts |
| Taxes for Retirees | Progressive rates 14.5–48 percent; no wealth tax; 0.7 percent property surcharge on less than €600,000 | Progressive rates up to 45–54 percent (regional); wealth tax 0.2–3.5 percent (varies by region) |
| Retirement Visa | D7 Visa: €870 per month passive income Golden Visa: Minimum investment of €200,000 | Non-Lucrative Visa: proof of sufficient funds; 10-year path to citizenship |
Why choose Global Citizen Solutions for your Immigration Visa?
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- GCS has offices located across Portugal.
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