The strong dollar, low tax rates and easy access to visas are helping Portugal become one of the world's most desirable retirement destinations, with an increasing number of Americans heading across the Atlantic to spend their golden years in coastal areas along the Algarve.
NEW YORK, Oct.14, 2022 /PRNewswire-PRWeb/ -- Expats and property-buyers from the US, whose source funds and income are in dollars, have seen their buying power in Portugal rocket in the past year, thanks purely to the exchange rate. As of the start of October 2022, the dollar is close to the strongest it has ever been against the euro, having hit parity with Europe's single currency in July and continuing to rally.
"The buying power of Americans in the Algarve and wider Portugal has strengthened significantly in the past year to 18 months," said Chris White, chairman of Ideal Homes Portugal, a leading estate agency in Portugal. "Based on today's [October 12th] rate of €1/$0.97, a Portuguese house with a price tag of €500,000 is around $90,000 cheaper than a year ago when the rate was €1/$1.15. A buyer could use this unexpected bonus to make upgrades to a property that is well within their original budget or use the extra buying power to purchase a more desirable home. Not forgetting this phenomenal saving also transfers to day-to-day living costs and we are seeing that with our resident American clients whose income is dollar-based."
Equally attractive to American retirees is the privilege of paying a reduced rate of tax in Portugal. This is thanks to the country's Non-Habitual Residence (NHR) regime, a tax relief scheme available exclusively to foreign nationals who haven't lived in Portugal within the previous five years. Key benefits include the exemption of most foreign-sourced income, including dividends, interest, and rental income, from Portuguese tax for 10 consecutive years, with foreign pensions taxed at a flat rate of just 10 percent.
Joe and Terri Eley are typical of the many Americans enjoying the unexpected drop in the cost of living there. The retired couple swapped Seattle for a new life in the Algarve in the summer of 2021 when they arrived in Portugal for the first time and moved into a new three-bedroom apartment in the coastal city of Lagos. They agreed to purchase the property for €450,000 a year before leaving Seattle, thanks to Ideal Homes Portugal collaborating with them remotely.
"The location ticks all the boxes," said Joe, "We're just a 12-15 minutes walk from the old town, five minutes from the marina and restaurants, and even less from the medical clinic. Lagos itself is not too big and is a perfect mix of old and new. It has every amenity you could need in a modern city. The climate is just right too, warm but not humid."
The couple is reveling in the famously relaxed Portuguese lifestyle and says they have met lots of fellow ex-pats, mainly American and British, adding that it has been years since they had such a busy social life. Equally, they say the locals are wonderful and the friendliest people they have met anywhere.
Representative of most retired foreigners from outside the European Union, the Eley's were able to enter and get residency in Portugal by obtaining a D7 visa. Often referred to as a retirement visa or passive income visa, holders of a D7 may not be employed in Portugal but instead must have a minimum foreign income of approximately €8,500 p.a., plus 50 percent of this amount for a spouse and 30 percent for each dependent. The application process usually begins at the Portuguese Consulate in your country of origin. Once in Portugal, holders should apply for a residency permit and after renewing this for five consecutive years can then apply for permanent residency status.
Another visa option geared towards high-net-worth and more transient foreign citizens is Portugal's much-publicized Golden Visa. A type of residency-by-investment visa, this grants residency to successful applicants who invest in qualifying property or other specified capital investments. Holders are required to spend just seven days in Portugal in their first year and not less than 14 days in subsequent years, and as such are not obliged to become tax residents in the country. The benefits of a Golden Visa are transferrable to family members and after five years of residency, the holders can apply for permanent residency or Portuguese citizenship.
In addition, younger economically active Americans might be better suited to Portugal's new digital nomad visa, which launches on 30th October 2022. To be eligible, applicants must be employed remotely and have an income of four times the Portuguese minimum wage.
"Not many countries can compete with Portugal's incredible lifestyle, with its friendly resorts, beautiful coastline, and world-class amenities," concluded Chris White at Ideal Homes Portugal. "Now add the financial bonuses of the exchange rate and low tax, as well as the availability of visas, and it's not difficult to understand why we are helping so many Americans realize their dream of buying and living in Portugal."
A leading property agency in the Algarve, Ideal Homes Portugal (http://www.idealhomesportugal.com) helps international clients find and purchase their dream home in Portugal, whether as a second home, investment or primary residence. Their multi-lingual team includes experienced American ex-pats who are ideally placed to help buyers from the US. Covering the whole of the Algarve and every type of property, Ideal Homes Portugal caters to all budgets. Complementing its sales and quality after-sales services, the company offers full property maintenance, comprehensive rental management, specialist currency transfer, and also can assist with visa applications.
Media Contact
Chris White, Ideal Homes Portugal, 351 918 055 119, [email protected]
SOURCE Ideal Homes Portugal
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