Portugal is a great place to retire. Pensioners around the world choose Portugal as their second residence. There are many reasons for this. Portugal is a warm, sunny country with beautiful nature. The historically rich country is also safe. The politics and economics of the country are stable and secure. Also, Portugal has very advantageous tax schemes. Moreover, the Iberian country is more affordable than in most European countries.
All things considered; Portugal is a great choice for American retirees. But how can US citizens retire in Portugal? What visas are there for US citizens? Is it a good idea to relocate to Portugal? Is retiring in Portugal worth the effort? The answers to these questions and more are in this guide.
Visa Options for US Citizens Who Aim to Retire in Portugal
Portugal is a popular retirement location among US citizens. Pensioners from the colder regions of the US consider Portugal heaven, and rightfully so. Yet, there are some requirements for retiring in Portugal. The first one is a valid visa. Retirees who aim to become Portuguese residents must have a valid form of visa. There are two options for pensioners.
The Portugal Golden Visa Program for US Citizens
The Portugal Golden Visa Program is a residency by investment scheme. It also allows successful applicants to become tax residents. The program involves great tax advantages. Retirees with a pension or property income from the US may benefit from these tax advantages.
To get a Golden Visa, applicants must invest in Portugal. The most popular option is the EUR 500,000 real estate investment option. Yet, applicants may choose to buy a property needing renovation and in a designated low-density area. In this case, the minimum investment requirement decreases to EUR 280,000. Permit holders must reside in Portugal for at least seven days per year.
Portugal’s real estate market has a solid performance. So, it is likely to get good returns on property investments.
Another way to get the Portugal Golden Visa is through an investment fund option. You need to invest €350,000 in a Portuguese fund in order to qualify. The investment amount will increase to €500,000 at the end of 2021. If you are interested, you can read more about the Portuguese Golden Visa fund option here.
The program changes on January 1st, 2022. Where you can invest in real estate will change and the minimum investment requirements will increase.
The Portugal D7 Visa for US Citizens
Another option for US citizens is the Portugal D7 Visa. With this method, US citizens may become Portugal residents as pensioners or passive income earners.
The Portugal D7 Visa requires proof of stable income. Applicants who submit their documents showing they have a safe, regular, and legal income may receive a residence permit. This permit involves a 10-year tax exemption. The Portugal D7 Visa is highly in demand among US citizens.
Inheritance Laws Regarding US Citizens in Portugal
Inheritance is an important issue for retirees. When changing residence, the legal status of their inheritance may also change. Pensioners who consider retiring in Portugal must research the laws of inheritance. Portuguese residency does not transfer inheritance tax residency. Portugal law suggests that the inheritance of individuals is governed by the tax laws of their home nation. So, if US citizens who retire in Portugal want to have their inheritance taxed by Portugal, they need to state this in their will. If the will does not state otherwise, the US inheritance laws will apply.
What Awaits US Retirees in Portugal?
Retiring in Portugal is advantageous for several reasons.
- Low Costs of Living
Portugal is cheaper when compared to other European countries and the US. Even in the capital Lisbon, one can live comfortably for USD 2,000-2,500. In smaller regions, USD 1,500-1,700 would suffice.
- Perfect Climate and Nature
Portugal enjoys more than 300 days of sun per year. The beautiful climate is accompanied by pristine beaches. Many retirees choose seaside regions as their residence in Portugal. The Algarve region is particularly in demand.
- Safety and Security
Portugal is often in the top few ranks of safety surveys. The country has a very low crime rate. Portugal is perfect for people who want to enjoy peace and calm in their retirement.
- Exemplary Healthcare System
Portugal has a great healthcare system. It involves universal health coverage through the National Health Service, NHS (Serviço Nacional de Saude, SNS). Portuguese citizens do not pay for healthcare services. For residents, this coverage is not entirely free. Still, expenses are almost completely covered by the NHS.
Retirees may also choose to sign up for private insurance policies. There are many private healthcare options residents may choose.
- Tax Benefits
Portugal has an advantageous tax scheme called the NHR. It stands for the Non-Habitual Tax Regime. The program includes a ten-year exemption from local taxes. Some of the foreign income may also qualify as exempt from Portuguese taxes.
- Large Expat Community
Another important factor for foreign residents is the social environment. Portugal has a large expat community. The English-speaking population of the country is also extensive. Thus, US citizens who retire in Portugal have no difficulty blending in.
Best Regions for US Citizens to Retire in Portugal
Portugal has many beauties to offer. These beauties are scattered all over the country. Still, some options stand out.
The most popular city among expats is the capital of Portugal. Lisbon is a vibrant metropolis with every sort of entertainment. The capital also has calm neighborhoods. Involving options for every lifestyle, Lisbon is attractive to expats.
Porto is also in demand among expats. With its top-notch wines, Porto is a cuisine and art hub.
Yet, the most popular region among retirees is, without a doubt, the Algarve. The picturesque town is the perfect spot for retirees. The beaches, golf courses, marinas, and restaurants of the Algarve are very alluring to pensioners all over the world.