Retire in Portugal

In 2009, Portugal’s retirement laws went through a significant change, in order to make the country more appealing to foreigners. The government implemented the non-habitual tax resident regime (NHR), which allows residents to benefit from a discounted flat income tax rate, instead of the regular rates that climb up to 48%. This includes pensioners. 

The NHR status is available to anyone who was not a tax resident in Portugal in the last five years. All you need to qualify is an international income, which includes pensions, salary, business earnings, investment yields, rental income and capital gains. It is exempt from taxation in Portugal for ten years. You are also exempt from tax on your overall wealth during this period. Any income generated in Portugal will be taxed at a flat rate of 20% instead of the bracketed income tax rates that can go as high as 48%.

All tax residents in Portugal are required to pay taxes on their worldwide income. You are treated as a tax resident in if you reside in the country for more than 183 days in a tax year or if you have a property that confirms your long-term residence in the country. If you register as a resident in Portugal for tax purposes, you can either apply right away or until March 31 of the following year. Accordingly, all residents need to fill out an annual tax return, declaring their income.

Portugal has double tax treaties with all EU countries and most non-EU countries, preventing double taxation. With the acquisition of this special tax status, the Portuguese state levies a lump sum of 10% on your international pension.

Another way to successfully retire here with special benefits is through the Golden Visa program. 

Can I receive my pension in Portugal?

By European law, all European countries agree on consistent social security regulations. If you have worked in different European countries during your professional career, these pension periods from all countries are added up. You will then receive pensions from the countries in which you worked. Please note, however, that different conditions apply when it comes to receiving your pension from different states.

The insurance institution of the country in which you worked will check whether you meet the requirements. It is, therefore, possible to receive several partial pensions from different countries, even if you want to settle in Portugal. The amount of the pension depends solely on the regulations of the respective country.

Pension payment abroad

As a pensioner, you can easily receive your pension in other EU member states. You no longer have to have an account in your home country, as it can be transferred to your Portuguese account. If you receive partial pensions from other countries, you do not have to keep domestic accounts for all of them. These amounts can also be transferred to a Portuguese account. For the transfer, you will only need an international IBAN and BIC.

How do I set up a Portuguese bank account?

Setting up a Portuguese bank account can make your life much easier when moving here. There are many banks in the country but only one is public – Caixa Geral de Depósitos (CGD). It’s a very solid bank but its fees have gotten higher over the years, driving some people away from it. However, if you plan on relying on a bank for a lot of services, this is a good option. The favoured private banks below all offer a large array of options – your decision should be made based on the priority of your needs.

• Millennium BCP – the largest private financial group in Portugal and the second biggest in terms of market share
• Santander –  the better option if you’re looking to get housing credit
• Montepio – a large social economy group, comprising a bank and a number of companies with services ranging from insurance to management of residential centers
• BPI – considered one of the most solid, but its range of services falls a little short of what would be desired

If you don’t plan on doing anything much with your account, then a bank without maintenance costs would be your best choice. The most trustworthy option is ActivoBank – a low cost bank under Millennium BCP. Besides not paying fees, you can also set everything up from the comfort of your home.

What you need to set up an account varies from bank to bank but three documents are essential:

• Valid Identification (ID, Passport)
• Residence Certificate (something like a rental contract or utility bill)
• Portuguese Tax Identification Number (NIF)

How does the Portuguese health care system work and can I find English-speaking doctors in Portugal?

When you retire in Portugal, a new life starts and you should not think about the worst to happen. However, healthcare is a very important aspect of where to settle. 

The Portuguese healthcare system is one of the best in the world, ranking 12th worldwide, according to the WHO (World Health Organization). Primary medical care in Portugal is free in all public health facilities, and the additional payments for treatments are quite cheap. A significant disadvantage, however, is the sometimes long waiting times when making appointments. It is generally recommended for immigrants to take out private health insurance. Although this can be a little more expensive, it not only offers you quicker services but also access to private hospitals, where international doctors who may speak other languages work. You will find English-speaking doctors mainly in the regions of the Algarve and in and around Lisbon and Porto. 

English-speaking doctors/facilities 

Insurances you need in Portugal

As explained in the previous point, it is worth taking out private health insurance in Portugal. The doctors listed above often work in private hospitals, which are not accessible only to the public health system. All private providers have certain insurance offers, which are linked to a monthly price and, joined with this, determine the benefits covered.

Most insurance policies do not cover dentist appointments so it is advisable to choose additional insurance for it. Some popular health insurance companies are Médis, Medicare, Allianz, Advancecare and Mgen Seguros. 

Cost of living in Portugal

In comparison to other European countries, the cost of living in Portugal is around 20% lower. However, it should be noted that the actual costs depend on the respective region and personal living conditions.

Rent

In tourist areas, for example, rental prices are much higher during the summer months, since many people rent houses and apartments for several weeks for the holidays. You can often observe an increase of around 20%, which only regulates itself after the summer months. So if you plan to move to Portugal, it is advisable to look for a suitable apartment in autumn or winter to avoid increased rental prices. On average, for a one or a two-room apartment, depending on the location and equipment, you should expect to pay between €600 and €1200. Rents in the city centers of Porto and Lisbon can be higher, so it is also worth considering looking for apartments on the outskirts.

Transport

These areas often have good train or ferry connections, so it is easy to commute to the center. Both Lisbon and Porto have economical monthly city passes that allow you to use public transport all over their metropolitan areas – usually with a discount for elders. Lisbon’s is called VIVA and Porto’s Andante. You can also look into renting a car or bringing yours to the country – which you can find all information on here.

Utilities

It is important to mention that many houses and apartments in Portugal do not have a central heating system. Therefore, many use electric heating, which is why electricity bills can often be higher in winter. Also, a lot of houses, especially older ones, use gas instead of electricity for things such as the cooking stove and hot water storage tank. In this case you can either get the gas supplied to you by your electricity company, like EDP, or you can buy the gas cylinder yourself. Prices on gas have gone up immensely in 2022, so electricity-only contracts are recommended – also because gas is much more dangerous.

Water bills tend to be cheaper everywhere, usually not surpassing 20€ in a two-bedroom apartment, for example.

Phone card/ cable TV/ Internet usually work as a package and depend entirely on your preference. Popular providers are NOS, MEO and Vodafone – all with different packages and benefits. Your choice will mainly depend on how fast you want your Wi-fi to be; how much monthly data you want on your phone; how many channels on your TV and if it’s for more than one person. You can get more information and compare plans here.

Groceries

There are many supermarkets in Portugal, not generally varying in price much. What’s recommended is for you to get a card/affiliation (like using a mobile app) of your closest grocery stores. Popular supermarkets such as Continente, Pingo Doce and Minipreço work on a client card system; Lidl and Aldi, for example, have mobile apps – both provide you with special discounts and quick information on deals and the weekly “folheto” (a pamphlet with the discounted products of the week/weekend).

Food