Investing in Portugal

The Portuguese government has developed a number of incentives for EU and non-EU residents that make both investing in and residing in Portugal incredibly attractive. This, alongside the wonderful year-round climate and excellent healthcare, makes the Algarve the ideal place to buy your new home.

Living in the Algarve is not only a fine financial investment, but more importantly a wise investment for your wellbeing.

Portuguese Golden Residency Permits

Residency permits are granted to non-EU nationals who make qualifying investments into Portugal either directly or through a Portuguese registered company, thus granting the holder the ability to work in Portugal and travel within the Schengen area. The permit is renewed on three occasions over a five-year period, after which the applicant is eligible to apply for permanent residency.

The investment can take place in a variety of forms, the simplest of which is a minimum €500,000 investment into Portuguese real estate. The investment can be financed, the property may be charged and it may also be leased for tourism purposes.

Moving to Portugal: tax incentives on pension and foreign income

The non-habitual tax regime makes it possible for UK residents to withdraw their entire pension and pay no additional tax on it in Portugal. To qualify, participants must register as a non-habitual resident with the Portuguese tax authorities, and enjoy all foreign sources of income (such as pensions tax) tax free for the first ten years.

Comparatively, regular pension income is usually taxed at 5% in Cyprus and in some circumstances at local marginal rates, which are higher. In France, regular or annual pension payments are taxable at the normal marginal rates locally, minus an annual deduction of approximately €3,500 per household. Lump sump payments from pension funds are subject to a 7.5% income tax.

Finally, in Spain, the grey areas in Spanish tax law make financial planning for investment and retirement with any certainty a difficult task. In the best case scenario, your annuity income could be taxed at 5%, but as a worst case, this could also be taxed as savings income at a rate of up to 27%. Other pension income is considered general income and taxed as such, between 24.75% and 52%. As of April 2015, UK residents can receive 25% of their pensions as a tax free lump sum, but this is taxable if taken as a Spanish tax resident.

Climate

The Algarve’s summer weather is well known, with daytime temperatures often in the 30’s and rain exceptionally rare. However, it is the autumn and winter climate which really sets the area apart with temperatures between October and March often reaching 19 degrees during the daytime.

Security and Healthcare

The World Health Organisation (WHO) has ranked the Portuguese health system 12th place in it’s most recent report. In Portugal, the official service for providing healthcare to the population is organized through a National Health Service. There is also a wide network of private health institutions, and the hospital network has long-standing links with major insurance companies.

Portuguese hospitals have begun to implement personalised patient care and monitoring services, designed entirely to make overseas patients more comfortable by using English as the language of communication. Lagos itself has a national and private hospital, all of which have English-speaking staff.

The Algarve, and in particular, Lagos enjoys relatively low levels of crime. A strong police presence, particularly in the summer months, ensures that the city and surrounding areas are kept safe at all hours, for individuals and groups of all ages.