Are you thinking of retiring in the Algarve?
The Algarve is one of the most popular holiday and expat living destinations in Portugal. It is located at the southern end of the country and touched by the Atlantic Ocean, right on the edge of the Iberian Peninsula. A strategically significant location throughout its long and impressive history, the Algarve is now a hotspot of tourist activity for locals and international visitors – primarily Brits.
When it comes to the setting, the Algarve paints an idyllic picture. The coastline and wild beaches, authentic local cuisine, excellent shopping and places of worship are just a few of the highlights. Whether you are looking for a luxurious extended holiday destination, a place to call home during retirement or a flexible remote working spot for work and life balance, this is a place that offers it all!
The main city, Faro, is well connected by air, land and sea. It is also regarded as one of the sunniest cities in Europe. This is a vibrant and lively urban centre, that carries traces of a glorious past. Then Romans, Byzantines, Visigoths and ultimately the Moors, counted Faro under their rule through the years. Another option is Portimão, a quaint fishing village with a lively atmosphere and plenty to offer when it comes to tourist attractions and cultural activities. Only 15 km to the west, we find the stunning beach of Benagil, with impressive rock formations and the famous sea cave. Lagos is where you will find some of the most majestic beaches in the country. Ponta da Piedade Lighthouse is also worth a visit.
Living in the Algarve Overview
Most popular cities for expats:
Faro, Portimão, Lagos, Tavira
Spain, Italy, Greece
- Crowded in the summer
- High unemployment compared to other EU countries
- The cost of living can get high in certain areas
- Mild climate and long summer
- Laid back culture
- Mediterranean cuisine
Keep in mind:
- Locals speak good English
- People are very friendly and open towards foreigners
- Portuguese is hard to learn
The mild climate and sunny weather are some of the major attraction points for those wishing to live and retire in the Algarve. It offers long hot summers and temperatures that hover between 9°C and 16°C during the winter months. Outside of the summer months, the population barely reaches half a million. But that can double with the arrival of eager and excited holiday goers.
As the largest city, Faro attracts both families and digital nomads but might be less attractive to retirees that prefer a quieter spot. It has lush gardens, lots of greenery, and is close both to the southern coastline and other well-known attractions and small villages. There are also options for those interested in ecotourism with a plethora of nature and hiking activities available. From birdwatching migratory birds to kayaking trips and biking tours, this is a varied and treasured landscape visitors will love.
When it comes to work opportunities in the Algarve region of Portugal, there are a few things to keep in mind. Digital nomads and location independent contractors or freelancers will love the laid back and relaxed vibe of the area. Coworking spaces and incubator hubs have been rising in popularity and can be found in the main cities, as well as smaller ones like Loulé and Sagres. If you are an EU national, able to work freely in the country without securing a job offer or visa before arrival, then keep in mind that the job market can be slow. Tourism is the main industry that employs locals and foreigners. Overall, unemployment in Portugal is higher than most European countries, with the 2019 figures showing a slight decrease from 12.4% in 2016 to 6.33% in 2019.
Taxes in the Algarve:
Portugal went through a major economic crisis in the early 2010s and has managed to recover slowly but steadily. Tax breaks and incentives have been introduced to entice international visitors to use Portugal as their base. The NHR scheme offers a fixed income tax rate of 20 per cent for the first ten years of residency under certain circumstances. After that period is over, you just return to the standard personal income tax bracket. Retiring in the Algarve as a EU national is pretty straightforward when it comes to taxes and receiving the pension from another EU country. All non-EU nationals will have to obtain a residence permit and provide all necessary documents including proof of income.
Cost of Living
Overall, the Algarve is considered an affordable destination to work and live in. Of course, that depends on your monthly income. The average monthly wage in Portugal as of 2019 is €1188 a month. For those considering retiring in Portugal, investing in residential property, like an apartment or a Portuguese villa could be an ideal set up for leisurely and relaxing days. Entertainment options and dining out are relatively affordable and considered a big part of the lifestyle of most residents.
Portugal is known for having an efficient healthcare system that outperforms that of neighbouring Spain. The latest Euro Health Consumer Index available for 2018 has ranked Portugal on the 13th spot. Short term visitors that hold a European Health Insurance Card (EHIC) have access to free public healthcare for up to 90 days. All legal residents have access to basic public healthcare.
Real Estate and Housing
Just like most popular destinations, securing a house rental or property to buy can take some planning. Some people prefer to base themselves in the countryside away from the coast, where the prices are lower. Those seeking a short term rental, so they have time to decide on a location or property, can find semi-furnished, or fully furnished apartments or complexes. Often, these feature extra amenities and communal spaces like a pool. Both modest and luxurious properties are available that will suit all preferences. If you feel intimidated by the process of signing a lease or navigating the rental system in Portugal it is best to seek the help of a professional real estate agent. House prices and demand for properties has been steadily rising in the last ten years in the Algarve with no sign of stopping so investing in property here makes sense.
Browse: All properties in Portugal
One of the most straightforward and preferred methods for those wishing to retire in Portugal is the residency by investment program, known as Golden Visa. It offers non-EU nationals the opportunity to secure residency and ultimately even citizenship if certain criteria are met. The program has recently undergone some changes in regard to rates. The minimum investment value has moved from €400,000 to €500,000. Other areas of Portugal have also been affected by the changes. The government also considered banning the option of investing in certain very popular areas, including Lisbon and the Algarve. As of now, the deadline has been extended until January 2022.
Read more: Why is it Good to Invest in the Algarve