Portugal: the tax haven for foreign pensioners
Find out what are the tax benefits you will have if you retire in Portugal.
Portugal has many advantages, whether you're looking for a holiday home, or actually to move there; the cost of living is low, the lifestyle is relaxed, food and wine are good, and the weather is excellent, particularly in the south of the country. Besides, property remains relatively cheap - particularly inland - compared to most attractive European destinations.
But different cities in Portugal have very different atmospheres, property markets, and attractions. If your idea of a great time is a night at the opera, you'll probably not pick the same town as someone who spends all their time on the beach. Here's our run-down of the top places to live in Portugal, and how different they are.
Porto is a northern powerhouse, a city whose trade in port wine made it wealthy in the 19th century and which remains cosmopolitan in feeling. It's Portugal's second city, but it punches above its weight economically - many Portuguese companies have their headquarters here; it has a big-city lifestyle but also a sort of small-town intimacy.
Scenically Porto is delightful, set on the banks of the Douro river; cobbled streets, old warehouses and merchants' houses, and art nouveau architecture are mixed together on the steep slopes. Summers are usually above 30 degrees, but winter can be rainy, though always mild. And the coast is a short trip away at Foz do Douro.
Porto itself is popular with tourists, has stylish bars and a great cultural life. To live in the centre of Porto, expect to pay around EUR 2,400 per square metre - way below the going rate for Lisbon.
Bonfim is one area of Porto that's attractive for buyers who don't want to be right in the historic centre. To the east of the city, it's a residential area with plenty of greenery and two big parks, and many good cafés and restaurants, attracting both students and families.
To the north of the city of Porto is the up-and-coming district of Cedofeita. It's an arty area, with quirky street art and numerous galleries, and has a great café scene. While it's close to the city centre, it tends to be somewhat quieter, so it's good for families wanting a home that benefits from the cultural life of the city but without the hustle and bustle.
Gondomar is just to the east of Porto, on the right bank of the Douro, but it has a much more rural feeling than the big city. In the 18th and 19th centuries many of Porto's wealthy wine merchants built themselves fine houses here as a retreat from the city, and this is still an area of lush gardens and greenery. Gondomar even has beaches on the river, as well as access to countryside and forests, yet it's just 25 minutes by bus from Porto.
While Brits often head further south, the area around Porto and smaller towns Guimarães and Braga is very popular with the French.
Viseu keeps winning awards as the best place in Portugal to live. It's inland, in the middle of the wine growing Dão region, with hot summers but occasionally quite wet winters. The old town is attractive, but this isn't a ghost town - the city is thriving, with a university and a good deal of trade. Parks and gardens - and an ice rink! - make it a great place to live, and it's a short car ride into the mountains and hills if you want to go hiking.
Prices for city centre apartments run around EUR 1,200 a square metre, and significantly less in the suburbs. Country properties for renovation start as cheaply as EUR 20,000, though a decent villa will cost EUR 100,000 upwards.
So far we've looked at the north of the country, but sun-lovers and those fleeing northern winters may prefer to head further south.
Head west from Lisbon and you come to the Estoril coast, where the Tagus meets the sea. Cascais is a popular resort with 200,000 population, about 40 minutes from Lisbon (with a good railway connection); unlike many seaside towns it's lively all year round. It has a sizeable foreign expat community including South Americans and Asians as well as other European nationalities, who benefit from international schools in the vicinity as well as the closeness to the capital.
Cascais' old town is attractive; it was a historic fishing port but was adopted by the Portuguese nobility as a retreat in the 19th century, adding a layer of grand style to the older kernel. It's casual but stylish - as the property prices show; houses here sell for around EUR 3-4,000 per square metre.
Estoril is practically Cascais' twin town, just 2 km away - you can walk to it along the beach. It's not as old as Cascais, so if old-style Portuguese charm is important to you, Cascais is a better bet. On the other hand it has lively night-life, including the huge casino, which was apparently the inspiration for the first James Bond novel.
Head further south to the Algarve and you're in the Portugal of sun, sea, and sand. But there's a bit more to the Algarve than that - inland, the rolling hills hide groves of lemon and orange trees.
Faro is home to an international airport, making it the best means of access to the area, but it's also a university town with a medieval quarter, a busy bar and club scene, and a relaxed style. Unusually for the Algarve, it's not too touristy - perhaps because the town isn't on the coast, though there are some lovely (and less frequented) beaches nearby.
Apartments in Faro go for EUR 2,400 a square metre, but further inland better bargains can be found.
Faro is lively all year round, but some other destinations in the Algarve can be pretty dead in winter. That makes them less attractive for those looking for a full-time home, and it also means work is very difficult to find (unless either you're a digital nomad, or you have good Portuguese). It's also heavily dominated by Brits (except for Faro, popular with Germans as well) - good if you don't speak Portuguese but perhaps less so if you want to integrate into Portuguese life.
Albufeira is the liveliest of the resort towns, with a pretty historic centre, great night-life (in season), golf courses and a pleasure marina. It's a town of two halves - the Old Town for families, and the New Town for stag and hen parties!
Olhos, which only became part of Albufeira municipality in 2013, is more low-key, a former fishing town on a sandy cove. The beaches and sport are great but there's not much cultural life - and frequent travellers may be put off by poor transport links to the airport at Faro.
Portimão is very popular with expats, and it's quite a tourist-orientated enclave where Portuguese restaurants rub shoulders with Irish pubs. But there's more to it than that - there's sardine fishing, a fascinating historic centre, lots of museums and bars, and the Dakar Rally once a year.
All this, and we haven't yet mentioned the capital, Lisboa. Beautiful and lively, touristy and expensive - there's a lot to be said both for and against it, but it's always vibrant and exciting. English is widely spoken here (not true everywhere - only 20% of Portuguese speak English), and the city gets 3000 hours of sunshine a year. Culture vultures will love its heritage, museums, and opera house.
Choosing the right area is crucial both for price (which can run from EUR 3,400 a square metre all the way up to EUR 10,000 plus) and atmosphere. Alfama and Graça are the oldest neighbourhoods, touristy but full of character; Avenida Liberdade and Chiado have spacious apartments and great amenities, but some of the highest prices. Bairro Alto is popular with the young and has a great night-life (not for those who turn in at nine in the evening!) while Restelo has a more laid back lifestyle, further out of the centre, but more expensive properties. Families might also consider the quieter neighbourhoods of Santos and Lapa.
For those who want easy access to the capital but without the big-city vibe and high prices, Seixal, across the river Tagus from Lisbon, makes a good alternative. It was a big heavy industrial town, but now it's remade itself with a major business campus and tourist developments including a new beach on the river with a two-and-a-half-kilometre sandbank. It's a town with a thriving cultural life including the Seixal Jazz Festival and the Communist Party's Avante! festival, and for those working in the capital the big draw is the lower property prices. EUR 300,000 can get you a villa with a private pool in Seixal - you won't get much for that across the river.
It's a 20 minute drive into Lisbon (or three quarters of an hour on the bus), but the quickest way across the river is the roughly half-hourly ferry.
Or you could head a little way out of Lisbon to Sintra, with its royal palaces, forests, and humid micro climate. It's a short train ride from the capital and a short walk from the beach, and is a great place for hikers and mountain bikers. The downside? It's thronged with tourists in summer, and there's nowhere to park.
Wherever you decide to buy, you'll find Portuguese life engaging - from the wickedly sweet pasteis de nata to the national passion for football. Bem-vindo em Portugal!