The American Migration and Their Discovery of Portugal

 

 

The American Migration and Their Discovery of Portugal

 

We sat down to talk to US couple Steve and Jennifer who recently bought a property in the Algarve. They give us insight into their life here and how it compares to life in the States. They tell us how they found the process of buying a property in Portugal. It is an interesting and helpful watch for any American citizen contemplating purchasing a property in the Algarve or considering relocating. Watch the interview here.

In recent years, a notable trend has emerged: an increasing number of Americans are choosing to make the move and invest in property in Portugal. Drawn by the country's rich history, beautiful landscapes, and favourable living conditions, these new expats are finding a welcoming haven across the Atlantic. This article explores the reasons behind this movement, the current flight connectivity facilitating this shift, and predictions for the future of Americans in Portugal.

 

Why Portugal?

Portugal has long been an under-the-radar gem in Europe, but its charm is becoming widely recognized, especially among Americans. Several key factors contribute to Portugal's growing appeal:

The Quality of Life: Portugal offers a high quality of life at a relatively low cost compared to other Western European countries. The healthcare system is excellent, and public services are usually efficient. The pace of life is relaxed, and there's a strong sense of community, which contrasts with the often hectic lifestyle in the U.S.

Climate and Scenery: With over 300 days of sunshine per year, Portugal's climate is one of its biggest draws. The country boasts stunning beaches, rolling vineyards, and picturesque towns. Whether it's the vibrant city life of Lisbon, the historic charm of Porto, or the serene beauty of the Algarve, there's something for everyone.

Safety: Portugal consistently ranks as one of the safest countries in the world. This sense of security is a significant factor for families and retirees considering a move.

Friendly Locals: The Portuguese people are known for their hospitality and warmth. Language barriers are relatively low, as English is widely spoken, particularly in urban areas and popular tourist destinations.

Flight Connectivity: The increase in direct flight routes between the U.S. and Portugal has made it easier than ever for Americans to visit and eventually move to the country. Airlines such as TAP Air Portugal, United Airlines, and Delta offer direct flights from major U.S. cities like New York, Boston, and Miami to Lisbon and Porto. These flights typically take around 7-8 hours, making Portugal an accessible destination for both short visits and permanent relocation.

The ease of travel has played a crucial role in facilitating the flow of American tourists and prospective residents, contributing to the surge in property investments.

 

The Surge in Property Investments

Over the past few years, there has been a significant increase in the number of Americans purchasing property in Portugal. According to data from the Portuguese Real Estate Association, the number of American buyers has tripled since 2019. In 2022 alone, Americans accounted for approximately 10% of all foreign property purchases in Portugal, a substantial increase from previous years.

This surge is not just confined to traditional tourist hotspots like Lisbon and the Algarve. More Americans are exploring and investing in lesser-known regions such as the Alentejo and the Douro Valley, attracted by the potential for growth and the opportunity to experience authentic Portuguese culture.

 

Why They Like Portugal

Several factors explain why Americans are falling in love with Portugal:

Cultural Richness: Portugal's history is deeply woven into its architecture, cuisine, and traditions. Americans are drawn to the country's rich cultural heritage, which offers a stark contrast to the newer, more modern culture of the U.S.

Gastronomy and Wine: Portuguese cuisine, with its emphasis on fresh, locally sourced ingredients, is a highlight for many Americans. The country's wine regions, particularly the Douro Valley, are world-renowned, offering exquisite wines and beautiful landscapes.

Outdoor Activities: Portugal's diverse geography makes it a haven for outdoor enthusiasts. From surfing along the Atlantic coast to hiking in the Serra da Estrela mountains, there are endless opportunities for adventure and exploration.

Community and Lifestyle: The slower pace of life and the emphasis on family and community resonate deeply with many Americans seeking a change from the fast-paced, career-driven lifestyle in the U.S.

 

Our Predictions for the Future

The trend of Americans moving to Portugal shows no signs of slowing down. As remote work becomes more prevalent and people seek better work-life balance, Portugal's appeal is likely to grow. The country's continued investment in infrastructure and technology will also play a role in attracting more American expatriates.

Moreover, the Portuguese government is actively encouraging foreign investment through various residency and citizenship programs. The Golden Visa program, which offers residency in exchange for property investment, has been particularly popular among American investors. Although there have been recent changes to this program, its success so far indicates that similar initiatives will likely continue to attract foreign buyers.

The influx of Americans is expected to have several positive effects on the Portuguese economy. Increased demand for property will stimulate the real estate market even further, leading to more development projects and job creation. Additionally, the spending power of American expatriates will benefit local businesses, from restaurants and shops to service providers.

However, it will be essential to manage this growth sustainably to ensure that the benefits are widely shared and that the unique cultural and social fabric of Portugal is preserved. Balancing development with heritage conservation and community interests will be crucial.

 

Conclusion

The discovery of Portugal by Americans and their subsequent decision to invest in property and relocate to this European gem is a fascinating trend with profound implications. Driven by the country's high quality of life, favourable climate, safety, and cultural richness, more Americans are choosing to make Portugal their home. With improving flight connectivity and supportive government policies, this trend is poised to continue, bringing with it economic benefits and cultural exchange.

As we look to the future, the American presence in Portugal is likely to grow, shaping the country's demographic and economic landscape in new and exciting ways. Whether you're considering a move yourself or simply curious about this emerging trend, Portugal's allure is undeniable, promising a bright future for those who choose to call it home.

Contact us for more detailed information on the Portuguese property market. As leaders in the luxury sector, we have one of the most impressive portfolios in the country and a team of 35 very special agents to advise you well! On average we sell Euro 200m worth of property annually and attract some of the very best listings for our buyers.

 

Current Visa and Tax Benefits for Americans Moving to Portugal

 

Visa Options:

Golden Visa Program: The Golden Visa is one of the most popular residency programs for non-EU nationals, including Americans. It offers several pathways to residency, with property investment being the most common. To qualify, one can:

•    Purchase real estate worth at least €500,000 (reduced to €400,000 if in a low-density area).
•    Invest €350,000 in property that is over 30 years old or in an urban regeneration area (reduced to €280,000 in low-density areas).
•    Transfer capital of at least €1 million to Portugal.
•    Create at least ten jobs in Portugal.

D7 Visa (Passive Income Visa): This visa is suitable for retirees or those with sufficient passive income (such as pensions, rental income, or dividends). Applicants must demonstrate:

   - A minimum monthly income of around €705 (subject to change and depending on family size).

•    Accommodation in Portugal (owned or rented).
•    Health insurance coverage.

D2 Visa (Entrepreneur Visa): Aimed at entrepreneurs and freelancers who wish to establish a business in Portugal. Requirements include:

•    A solid business plan.
•    Evidence of sufficient financial means to support the business and personal living expenses.
•    Proof of accommodation in Portugal.

Temporary Stay Visa: This visa is for stays of up to one year and can be used for various purposes, including studying, working, or medical treatment. It is renewable and can be a stepping stone to more permanent residency options.

 

Tax Benefits

NHR (Non Habitual Residency): The current scheme has been stopped but a new version of the scheme is currently being negotiated.

Capital Gains: No wealth tax or inheritance tax on assets outside Portugal.

Tax Treaties: Portugal has double taxation agreements (DTAs) with the U.S. and many other countries to prevent double taxation on income. This means that taxes paid in one country can often be credited against taxes owed in another, reducing the overall tax burden.

Property Taxes:

• IMI (Municipal Property Tax): This is an annual tax levied by the local municipality, ranging from 0.3% to 0.45% of the property’s taxable value.
• IMT (Property Transfer Tax): This is a one-time tax paid upon purchasing property, with rates varying depending on the property's value and purpose (e.g., primary residence, secondary residence).
• Stamp Duty: A 0.8% tax on the purchase price of real estate.

Social Security Contributions: For those employed or self-employed in Portugal, social security contributions are mandatory. However, Americans may benefit from the U.S.-Portugal Totalization Agreement, which helps avoid double social security taxation and ensures benefits are not lost.

 

Summary

Portugal offers a range of visa and tax benefits that make it an attractive destination for Americans. The Golden Visa and D7 Visa provide clear pathways for residency, while the NHR regime offers substantial tax incentives, especially for retirees and high-value professionals. Additionally, tax treaties and social security agreements further enhance the financial appeal of moving to Portugal. As more Americans discover these benefits, the trend of investing in property and relocating to Portugal is likely to continue growing.

 

Stay tuned for the latest updates in our News & Events section!

 

Alison & Kerstin
Co-Owners, Directors...& Sisters
info@qp.pt | +351 289 396 073 | qp.pt