Portugal Retirement Visa: Retiring in Portugal 101 [2024] 

Considering retirement in Portugal? You’re not alone. Many American expats are drawn to Portugal for its mild climate, affordable living costs, and friendly communities. 

This guide will cover everything you need to know about Portugal retirement visas to help you make an informed decision. We’ll also go over some tips for retiring in Portugal—and how it will impact your taxes. 

Portugal Retirement Visa Options 

The two primary options for Portuguese retirement visas are the D7 Visa and the Golden Visa. 

• The D7 Visa is designed for individuals with a stable passive income. 
• The Golden Visa is for wealthy individuals who want to become residents by making a substantial investment in Portugal. 

Both offer unique benefits and opportunities for US citizens hoping to retire abroad. The right choice will depend on your financial situation and long-term goals. 

Let’s take a closer look at both. 

1. D7 Visa 

The D7 Visa, often referred to as the Passive Income Visa, is tailored for retirees and other individuals who receive regular income from pensions, real estate returns, investments, or intellectual property. To qualify for this visa, you must have a steady income that meets the minimum financial requirements set by the Portuguese government. 

Benefits of Retiring with the D7 Visa 

• Cost of living: Portugal offers a significantly lower cost of living compared to the US and many European countries, allowing your pension to stretch further. 
• Access to healthcare: Retirees can access high-quality public healthcare services at reduced the expat cost of living. 
• Travel within Europe: Holders of the D7 Visa can travel freely within the Schengen Area, making it easy to explore other European countries. 

D7 Visa Eligibility 

• Stable passive income: Applicants must demonstrate a reliable passive income of at least €7,200 per annum for a single applicant, with additional requirements for dependents. 
• Residency requirement: Applicants must spend a minimum of 183 days per year in Portugal or show intent to maintain a residence in Portugal. 
• Proof of income: You will need documentation showing regular passive income. 
• Health insurance: You will need valid health insurance that covers your stay in Portugal. 
• Background check: You must provide a criminal record certificate from your current country of residence. 

2. Golden Visa 

Portugal’s Golden Visa program offers a fast track to residency for those able to invest in the country’s economy. This program is particularly attractive to non-EU citizens who wish to gain residency status through investments or job creation. 

Benefits of Retiring with the Golden Visa 

• Reduced stay requirement: Unlike traditional visas, the Golden Visa requires you to stay in Portugal for only seven days per year during the first five years. 
• Family reunification: Immediate family members can also obtain residency, providing access to education and professional opportunities across Europe. 
• Long-term benefits: After five years, you may apply for permanent residency or citizenship, subject to meeting certain conditions like language proficiency and ties to the country. 

Portugal Golden Visa Eligibility 

• Investment: You must make an investment that meets certain thresholds. All investments must be maintained for a minimum of five years from the time the residence permit is granted. 
• Proof of investment: Documentation such as deeds of purchase or proof of capital transfer. 
• Legal paperwork: Portuguese tax number (NIF) and proof of no outstanding tax obligations. 

Investment Options for the Portuguese Golden Visa 

Options for an investment include: 

• Investing €500,000 in qualifying Portuguese ventures (excluding all direct or indirect real estate investments) 
• Donating €500,000 to scientific research and development 
• Donating €250,000 to support the reconstruction of Portuguese heritage or arts 
• Creating 10 new jobs for Portuguese citizens 
• Investing €500,000 into forming a company in Portugal that creates at least five permanent jobs 

If you invest in low-density areas, these thresholds may be reduced. For example, in a low-density region, you would qualify by creating only eight new jobs for Portuguese citizens rather than the usual 10. 

October 2023 Golden Visa Update 

In the past, investing in Portuguese real estate or transferring a certain sum of money to a Portuguese bank account would qualify you for a Golden Visa. However, this changed in October 2023. Since then, only the investments listed above are eligible. 

Getting an NIF and Bank Account in Portugal 

To retire to your new life in Portugal, you will need a Número de Identificação Fiscal (NIF) and a local Portuguese bank account. 

Getting a Número de Identificação Fiscal (NIF) 

The NIF is a tax identification number used for almost all transactions that require official identification. It acts as a fiscal number for the tax authorities and is necessary for: 

• Leasing or buying property 
• Setting up utility services 
• Accessing healthcare and social services 
• Opening a bank account 

You can apply for an NIF through local finance offices, some Portuguese consulates, or by using a legal representative in Portugal. 

Opening a Portuguese Bank Account 

To manage your finances in Portugal, including receiving pension payments from abroad, paying bills, or buying property, you’ll need a local bank account. Steps to open a bank account typically include: 

• Providing identification, such as a passport 
• Submitting proof of address 
• Showing your NIF number 
• In some cases, making a minimum deposit (this varies between banks) 

Portuguese Residency Requirements 

Establishing residency in Portugal is done in two stages: temporary residency and permanent residency. 

• Temporary residency: Initially, retirees apply for temporary residency, which is valid for one or two years and can be renewed for successive periods. This is the first step toward long-term residence in Portugal. 
• Permanent residency: After five years of legal residence, you may apply for permanent residency. This status provides the right to live, work, and study in Portugal indefinitely and comes with added benefits such as access to social services. To receive permanent residency, you will have to demonstrate strong ties to Portugal, including language proficiency and continued economic activity or income. 

Regardless of whether you apply for the D7 Visa or Golden Visa, you will need to establish temporary residency before applying for permanent residency status. After six years in Portugal, you can apply for Portuguese citizenship. This will grant you an EU passport, giving you the right to live and work anywhere in the European Union. 

Benefits of Retiring in Portugal 

• Affordable cost of living: One of the most appealing aspects of retiring in Portugal is its relatively low cost of living compared to other Western European countries and the United States.  
• Quality healthcare: Portugal boasts a high standard of public and private healthcare. Healthcare standards must align with EU guidelines, ensuring quality medical care. Better still, the cost of healthcare is relatively low, with options for additional private insurance to complement the public services. 
• Safety: Portugal is consistently ranked as one of the safest countries in the world by the Global Peace Index. Its low crime rate makes it an ideal place for retirees who prioritize peace and security. 
• Pleasant climate: The climate in Portugal is one of its most enticing features. Winters are mild and pleasant, while the summers are warm but not excessively hot—with coastal breezes moderating the temperature. 
• Vibrant culture: Portugal offers a rich cultural tapestry. From ancient castles and Roman ruins to monasteries and museums, the country is steeped in history. The local culture is also warm and inviting, with numerous festivals, music, and art exhibitions throughout the year. 
• Widespread English: While Portuguese is the official language, English is widely spoken in major cities and tourist areas. This helps American retirees to ease into the culture. 
• Relaxed lifestyle: Portugal is known for its laid-back lifestyle, which can be particularly appealing for retirees looking to slow down and enjoy their later years. Daily life in Portugal encourages taking time to enjoy meals, nature, and social interactions without the rush often found in other countries. 
• Expat community: American retirees can find numerous expat communities throughout Portugal. These communities often organize regular meet-ups, cultural outings, and other social events. 
• Tax benefits: Portugal offers some attractive tax benefits for expats, including the Non-Habitual Resident (NHR) program, which can significantly reduce the tax burden for the first ten years of residency. 

Best Places to Retire in Portugal 

Portugal boasts a wide variety of cities and rural regions for retirees to call home. Some of the best options include: 

• Lisbon: Portugal’s capital city offers vibrant cultural experiences and extensive amenities. 
• Algarve: Known for its beautiful beaches, golf courses, and expat communities. 
• Porto: Famous for its wine and riverside charm, Porto provides a mix of traditional and modern living. 
• Coimbra: A quieter option with a historic university town feel. 
• Madeira and the Azores: For those looking for island living, these regions offer unique landscapes and a slower pace of life. 

How Much Money Do You Need to Retire in Portugal? 

The amount of money you need to retire comfortably in Portugal will vary depending on your lifestyle and location. The good news is that Portugal’s cost of living is notably lower than most of Europe. 

• In a smaller town, a couple may need a monthly income of only €1,400 to €1,800 (~$1,500 to $2,000). 
• In bigger cities, a couple will likely need a monthly income of €1,800 to €3,200 (~$2,000 to $3,500). 

For some, Social Security alone is enough to cover the cost of living in Portugal. If you can add additional income or savings, you could expect to live quite comfortably in Portugal. 

Do Americans Pay Taxes in Portugal? 

American citizens living in Portugal are subject to both US and Portuguese taxes. 

US Tax Obligations 

All US citizens are required to file a US federal tax return. Regardless of where you live, you will have to report your worldwide income every year. Fortunately, there are several tax breaks available for Americans overseas, including: 

• Foreign Earned Income Exclusion 
• Foreign Tax Credit 
• Foreign Housing Deduction 

By using these benefits, many expats are able to erase their US tax bill. (Though you will still have to file a return.) 

Portuguese Tax Residency 

If you spend more than 183 days in Portugal during any calendar year or have a habitual residence in Portugal, you are considered a tax resident. Tax residents in Portugal are taxed on their worldwide income, while non-residents are only taxed on income that came from a Portuguese source. 

Non-Habitual Resident (NHR) Program 

Portugal offers a special tax regime for new residents called the Non-Habitual Resident (NHR) program. This program is especially beneficial for retirees. 

Under the NHR, certain types of income, including pensions, dividends, royalties, and interest from non-Portuguese sources, may be taxed at a favorable flat rate of 10% for ten years. Additionally, some types of foreign income might be exempt from Portuguese tax. 

Healthcare in Portugal for US Expats 

Portugal offers a high standard of healthcare that is both modern and more affordable than the US. In worldwide rankings, Portugal is rated well in all health metrics, including healthcare outcomes and patient satisfaction. 

Public Healthcare System 

Portugal’s National Health Service (Serviço Nacional de Saúde, SNS) provides comprehensive healthcare services to residents, including expats who are legal residents. Once you have your residency card and are registered with the SNS, you are entitled to access healthcare services at a low cost. This includes: 

• Consultations 
• Surgeries 
• Some medications 

Emergency services in Portugal are highly efficient and accessible to anyone in need, regardless of their residency status. 

Private Healthcare 

Many expats choose to supplement public healthcare with private insurance. Private healthcare in Portugal offers shorter waiting times and broader access to English-speaking doctors and specialists. 

Private health insurance is quite affordable and can be tailored to include services beyond those covered by the public system, offering more comfort and convenience. Monthly premiums can vary, typically ranging from €40 to €100 per person, depending on the extent of coverage. 

Do I Need to Speak Portuguese to Retire in Portugal? 

While speaking Portuguese is not a requirement to settle in Portugal, knowing the language can make your life abroad much easier. A language barrier can make it harder to shop, eat out, use public transportation, and mingle with the locals. However, many Portuguese natives speak at least basic English, so you may not need to be fluent right away. 

Inheritance Laws in Portugal 

Portugal has strict forced heirship rules, which means that a portion of your estate must be allocated to certain family members, primarily your spouse and children. This can limit your ability to distribute your assets freely according to your wishes. Typically, spouses, descendants, and ascendants are entitled to two-thirds of the estate, regardless of what a will says. 

However, EU residents can choose to let the law of their nationality govern their estate. This means US expats can opt for US inheritance law instead of Portuguese law. Making such a choice must be explicitly stated in a will to ensure it is recognized. 

Portuguese inheritance taxes are better than in many other countries. There is no tax on inheritances or gifts between spouses, descendants, and ascendants. Other beneficiaries are subject to a flat 10% tax rate. 

How Long Can US Citizens Stay in Portugal without a Visa? 

US citizens can stay in Portugal for up to 90 days within any 180-day period without a visa. This rule applies to the entire Schengen Zone, which means that the total time spent in any Schengen countries combined cannot exceed 90 days within any 180-day period. 

There are online calculators and mobile apps available that can help you track your days and ensure compliance with the 90/180 rule. 

Let Greenback Help You with Your Portugal Retirement Visa 

Once you’ve found the right Portugal retirement visa and you’re ready to settle down abroad, you’ll probably want some help with your expat taxes. When living overseas, your tax obligations can get complicated fast. It’s no wonder that one in five US expats don’t feel confident about filing their taxes. 

At Greenback Expat Tax Services, we give Americans around the world the support they need to file their taxes accurately and on time. Contact us, and we’ll be happy to help you in any way we can.