Ultimate guide to retiring to Portugal: Sunny skies, cheap houses and so affordable… no wonder Brits are flocking there. Now experts and those who’ve done it reveal everything you need to know

Its authentic villages and well-preserved beaches lend a gentler appeal than next-door Spain,with the low cost of living an additional benefit for those looking for a restful retirement.

Indeed, Portugal was ranked the top global destination for retirees in the 2025 Global Retirement Report, with British expats accounting for a fifth of an estimated poplation of 1.5 to 1.6million foreign residents (14-15 per cent of the overall population).

Joined to England by the longest-running diplomatic alliance in the world, Portugal has always sought to welcome British visitors, especially after Brexit, and the retirement visa on offer is one of the most accessible in Europe.

It’s highly popular with UK and, increasingly, American retirees looking to take advantage of the Portuguese lifestyle.

But what are the key things to know if you are planning to move?

Lifestyle Cost of living

A big attraction of Portugal is that, outside of Lisbon and Porto, day-to-day living expenses are very affordable, from a traditional his menu (menu of the day) for €10-€15 (£8.70-£13.05) at a local restaurant, to low property taxes, travel costs and car and home insurance.

Those aged 65 and over who are Portuguese residents can get half-price train and bus fares, plus lower rates at swimming pools and leisure centres.

On average, the cost of living in Portugal is 28 per cent lower than the UK, with rental rates 24 per cent lower, according to numbeo.com.

Many retirees purchase a home in Portugal without a mortgage and, minus housing expenses, can live on €1,350 (£1,174) to €1,550 (£1,349) monthly, according to migration consultancy Global Citizen Solutions. This is an annual living cost of roughly £14,088 to £16,188.

In the UK, a sum of £43,900 is required for a pensioner to enjoy a ‘comfortable’ retirement, according to the Pensions and Lifetime Savings Association (PLSA), or £31,700 a year for a ‘moderate’ lifestyle.

Many UK pensioners assume they will need to budget for private healthcare post-Brexit, yet thanks to an S1 Certificate, those of UK state pension age can register for the Portuguese health service, or SNS (and so can their spouse, even if they are younger than 66).

Lifestyle Affordable housing?

Prices have been rising on the Algarve thanks to strong overseas demand, and while prices dip inland, it’s hard to find much by the coast for less than €200,000 (£173,980) now – though that’s still affordable by UK coastal town standards.

Popular areas for retirees include Praia da Luz, where you can find a two-bedroom house for less than €300,000 (£261,022), or Tavira in the east, which has decent options for €200,000 (£173,980).

Other expats look inland to locations such as Silves, a historic town with modern amenities, for a good lifestyle all year round. A renovated townhouse or a three-bedroom semi-detached home here costs less than €300,000 (£260,955). Boliqueime and Alcoutim are also good options.

On the Silver Coast, you’ll pay around €470,000 (£408,885) for a new, contemporary-style, three-bedroom villa with a pool, says Dylan Herholdt of Portugal Realty. The maximum annual tax you’ll pay on such a property is around €2,250 (£1,957).

For homes worth more than €600,000 (£521,982) there is an AIMI tax (at 0.7 to 1.5 per cent of the property’s value for private taxpayers), but a couple can ‘pool’ their allowance so the tax is only payable on properties worth €1.2million (£1,043,730) or more.

‘You’ll find cheaper properties in the interior locations, but there will be compromises on age, build quality and lack of access to amenities,’ Mr Herholdt says.

When purchasing, put aside around 8 per cent of the sale price for legal and notary fees, property transfer tax, stamp duty and registration costs.

Lifestyle Culture and lifestyle

The traditional image of retirement in Portugal typically involves golf courses on the Algarve.

However, the Algarve has changed a great deal over the past decade or so, adapting to an inflow of international families and retirees looking to live there year-round.

Indeed, these days many retirees skip coastal resorts altogether, heading inland instead.

‘The Algarve attracts active retirees who want to embrace a varied lifestyle and discover cultural highlights, from hiking trails to water sports to local arts events,’ says Joao Richard Costa, CCO at Ombria Algarve, a new wellness resort 25 minutes inland. It’s near Loule, a pretty market town renowned for pottery, cork and mosaics.

But for the increasing number of retirees who seek proximity to city life, areas around Lisbon such as Cascais, Setubal and the Silver Coast (see below) also appeal.

Cultural events, village parties, wine and street food festivals, concerts, theatre and art exhibitions are part of life on the Silver Coast, says Mr Herholdt. Relaxed beachside towns are just a cheap Uber ride away from the Portuguese capital.

It also helps that Portugal is one of the top ten safest countries in the world: it’s ranked seventh out of 163 countries, according to the 2025 Global Peace Index.

Lifestyle Applying for a visa

Post-Brexit rules mean that unless you (or your spouse) currently hold or can apply for an EU passport, you need to apply for a visa to move to Portugal.

While the D7 visa is popular and relatively easy to obtain, the process itself is often protracted; slow bureaucracy tends to be the main gripe of those wishing to relocate.

You need to show a passive source of income of €920 (£800) per month for the main applicant, plus another 50 per cent of that amount for a spouse (€460 or £400 per month). This is far less than the full UK state pension (£1,045 per month from April).

With this visa, you are eligible for full access to healthcare and a path to permanent residency or citizenship. Should you seek a retirement project, visa holders can also open companies in Portugal.

You can apply for the visa in the UK from the Portuguese consulates in London or Manchester, or via the VFS Global portal online.

Application costs for the visa are relatively low – around €200 (£174), plus legal/translation fees. If you enlist the help of professional services, though, these costs can be nearer €1,000 (£870).

Lifestyle Tax considerations

Any retirees considering a move to Portugal should begin planning early, as you maybe liable to pay tax on assets for UK investmentssuch as ISAs, pension lump-sum drawdowns or capital gains on a UK property.

As Federica Grazi of Mitos Relocation Solutions explains, if you are a Portuguese resident and sell a UK property, 50 per cent of the gain is added to your annual income.

However, if you are over 65 and sell your main residence in Portugal, you may be able to reduce or eliminate Portuguese capital gains tax altogether by reinvesting the proceeds into a new main Portuguese residence, eligible insurance product or pension-type fund.

If derived from UK government pensions, pension income will generally continue to be taxed in the UK. However, the UK-Portugal Double Taxation Treaty applies, so you will not be taxed twice.

Most state and private pensions will be taxed in Portugal for new arrivals: progressive income tax rates start at 13 per cent on the first €8,059 (£7,020) of income, rising to 48 per cent on income of €83,696 (£72,900) or above.

An additional solidarity tax is payable by individuals with higher income: 2.5 per cent on income between €80,000 (£69,703) and €250,000 (£217,823), and 5 per cent on income exceeding €250,000 (£217,824).

Investment income (interest, dividends, capital gains) is usually taxed at a flat rate of 28 per cent. Alternatively, as Ms Grazi explains, it can be added to the taxpayer’s other income and taxed at the scale rates.

Married couples who are Portuguese residents can be taxable on the aggregate income of husband, wife and dependent children, or can choose to be taxed individually.

There is no inheritance and gifts tax, but a stamp duty of 10 per cent applies on the transfer of assets in Portugal upon death, if gifted outside the family. But UK retirees remain subject to UK inheritance tax for ten years after leaving the UK.

Lifestyle 60p coffees and endless sandy beaches

David and Suzanne from Hertfordshire moved out to Portugal’s Silver Coast last year, having fallen in love with the slower pace and the Portuguese approach to life.

The young retirees, who went to the same school but did not get together until they were in their 50s, fancied a complete change of lifestyle (with more sun).

‘We liked the Silver Coast, an hour north of Lisbon, because it felt more authentically Portuguese than the Algarve, and our money would go further,’ says David, 57.

Twenty minutes from surfing town Nazare, their three-bedroom property in the village of Ataija de Baixo cost £234,000 – the cost of a small apartment on the Algarve.

The area is prized for its low-key fishing towns dotted around long, sandy beaches.

Helped by the same lawyer they used to buy their house, the couple obtained a D7 visa prior to their move.

‘Because we are not married, we did two separate applications, which are linked,’ says David, a former carpenter, who explains that income from their buy-to-let properties in the UK counts as passive income. The visas cost around €2,500 (£2,178) each.

The biggest challenges of the move have been the paperwork and the language barrier. As it’s not a tourist area like the Algarve – where everyone speaks English –  they’ve had to work hard to learn Portuguese. Thankfully, private lessons only cost €15 (£13) an hour.

The low cost of living has been a happy surprise, says David.

‘A coffee costs 70 cents (60p), a drink in a local bar €3 (£2.61) and a lunch in a local restaurant €15 (£13) per person.’

Their newly adopted puppies, brother and sister Gus and Dolly, are keeping them busy, too.

‘We love our new life,’ says David. ‘The locals have been welcoming.’