British buyers don't feel welcome in Spain so they're flocking here instead

Yahoo

24-03-2025

Portugal has been a popular relocation destination for a decade. A mix of lifestyle, tax and residency incentives have drawn retirees, digital nomads and families to Europe's south-west corner.
The most recent figures show a record number of foreign residents moved to Portugal in 2023 – up 130pc on year before – with British the third most popular national group after Brazilians and the French, according to AIMA, the migration agency.
It counted 47,409 British citizens in the country in 2023-24, up from 45,265 in 2022.
More recently, property portals and relocation agents are reporting an increase in interest, with one reason being attributed to wealthy taxpayers fleeing Labour's slew of tax hikes in Britain – especially with the threat of more to come.
Another is the recent pronouncements of Spanish prime minister, Pedro Sánchez, who announced he might double taxes for, or even ban, non-EU buyers.
'We are seeing a lot of buyers saying they were thinking of Spain but are now looking at Portugal,' says Dylan Herdholdt of agent Portugal Realty on the Silver Coast. 'It's the feeling they are not welcomed there, rather than tax increases.'
Stability, security and the fact that English is widely spoken in the Algarve have been key drivers for British families, and increased American interest is likely to continue with new direct flights from New York to Faro in May.
While 10pc of foreign buyers are already American, the Portuguese Property Association luxury marketplace, JamesEdition, reports that US buyers have now overtaken the British for property enquiries, with the Lisbon area accounting for nearly half of these, followed by the Algarve (32pc).
Although the real estate investment option of the golden visa scheme has ended, there's been a 185pc increase in American applications for the programme since Donald Trump won the election, according to migration consultancy Henley & Partners.
Most of these have been for the €500,000 (£420,000) fund investment route, rather than the cultural donation of €200,000-plus option.
But the 'Type D' long-stay visas have been popular too, with the D7 (passive income/retirement) the most popular route for Britons moving to Portugal, according to Global Citizen Solutions (GCS), a Lisbon migration consultancy.
But the D8 (digital nomad) is also 'gaining traction' along with the D2 (entrepreneur) visa, according to Geoffrey Graham of Edge International Lawyers.
'The D2 and the NHR 2.0 are a good combination,' he says, or the new version of the NHR (non-habitual resident) regime targeting highly-skilled entrepreneurs, with a 20pc flat tax rate for 10 years. In Portugal, there's no inheritance tax or wealth tax.
Here's how three couples are making the move to different parts of Portugal.
A couple for 32 years and living in Southport, north west England, Dave and Ted Sedgewick decided to retire early from their jobs in compliance and environmental science to 'have an adventure'.
'We considered Spain, Greece and Portugal,' says Dave, 54. 'We loved Greece, but were worried about island life being too quiet in winter. Portugal came out top for easier access to healthcare, but also lifestyle and accessibility.'
The couple rejected the Algarve and Comporta as too expensive – with €500,000, they could afford a new three-bedroom villa with a private pool on the Silver Coast, one hour north of Lisbon.
'We found it to be more authentically Portuguese, with amazing long sandy beaches like Salgado.'
Until their new home near Salgado is completed in June, they have been renting a two-bed apartment for €800 a month and practising their Portuguese at their nearby coffee shop.
'Everyone stops to say hello,' adds Dave, who's also been volunteering at an animal rescue sanctuary.
With neither of them wishing to work, the D7 visa was a no-brainer, so they started the process back in the UK through VFS Global, partner of the Portuguese Embassy.
You have to show financial resources – €10,440 per year, plus €5,220 for the partner, and €3,312 for any child dependent. Dave says it was a lot of paperwork, though they found it manageable to do themselves rather than paying an agency.
'We started in September, got an appointment in November, found out in January we'd been successful and got the stamps [temporary visas] in our passports,' says Dave, of the first stages held at the Manchester Consulate.
They needed a tax number (NIF), a NISS (social security number) and to take out private healthcare, so the total cost for their visas was €1,500.
'Once you get the stamp, you have three months to move to Portugal. Stage two means second appointments in June – in Portugal – but then we have a visa for a year, before we renew twice before becoming permanent residents after five years.'
Until then, they are exploring Portugal – Porto is two hours north, and nearby Nazare is a vibrant year-round surfing town.
'The cost of living is much lower, too. A three-course meal with vinho verde is €10 each.'
When Amber Hill and partner Charis, 32, felt America was heading in a direction that didn't align culturally with their values, they decided to move abroad.
The entrepreneurs – who together run Franway, a franchise consultancy, and a home-building business in Pittsburgh – drew up a list of possible places.
'We travelled around Europe and our shortlist was Spain, Italy, the Netherlands or Portugal,' says Amber, 35, originally from Dallas. 'We researched visas and liked the sound of the Portuguese D2 (Entrepreneur) so much that we applied even before setting foot in the country.'
The couple spent two days in Lisbon, two in Porto, and a day in the Algarve, but fell in love with Cascais, the upscale beach village west of Lisbon. They signed a lease on a rural property in nearby Estoril, which they moved into in January 2024.
'We are a 10-minute walk to the beautiful San Pedro beach, which is kept immaculately clean by volunteers. We love the gentle, slow life compared to the hustle and grind of the US.'
They used GCS to assist them with the D2 application, which included producing American business accounts, a business plan, and at least $30,000 in their Portuguese bank account, plus an FBI check (British visa applicants similarly need an ACRO), and private healthcare cover.
'The whole process took about a year,' says Amber, who was able to take advantage of the NHR tax regime just before it ended (offering a flat tax rate of 20pc on income and exemptions on global income).
The visa lasts two years, which they will then renew and hope to get dual citizenship after five years.
'We will stay here as long as it never becomes like the place we left,' she adds.
Deb and Paul Leonard from Sheffield have dreamt of living in Portugal for 30 years. Last summer, they finally realised their plan to buy a home in the Algarve, after watching prices rise since 2019.
'Since our first road trip to look at properties we've seen prices nearly double,' says Deb, 60, a former police officer like Paul, 67.
In August, they bought a one-bedroom apartment in Encosta de Marina, a popular complex in Lagos on the western Algarve, priced at €320,000 (through Algarve Retreats).
'We always preferred the Eastern Algarve – Tavira was our go-to, but it's not busy all year round, like Lagos,' says Deb. 'In March-May last year, we met so many like-minded expats.'
But the couple, who have three children between them, and a new grandchild, do not want to move fully to Lagos – just half the year. They are going to apply for D7 visa.
'It's too hot for us June to August – so we intend doing 2.5 months in the spring and then two months in September. Four of the family are teachers so they can use it during school holidays.'
They'll be running two properties, but Deb says the large apartment is not too expensive: €300 a year council tax, €59 a month pool/condo fees plus bills of €30 a month. Buying costs came to 4.5pc of the purchase price.
'But we look at the sunshine, not our bank account.'
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