Once a darling among British expats, Portugal is starting to lose its allure for some UK buyers — and not necessarily because of taxes. Despite still offering beautiful coastlines, favorable residency options, and a lower cost of living, new political signals and policy shifts have made some Brits feel less than welcome. As a result, many are beginning to reconsider their European relocation plans.
Portugal’s Property Boom and a Shift in Sentiment
Portugal has been a magnet for digital nomads, retirees, and international investors for years. In 2023 alone, foreign residency in the country rose by 130 percent year-on-year, with British nationals making up the third-largest expat group after Brazilians and the French, according to AIMA, the country’s migration agency. Over 47,000 Britons now call Portugal home.
However, that number may not grow at the same pace in the future. While tax hikes in the UK are pushing many high earners to look abroad, some British buyers are starting to turn away from Portugal, citing a feeling of cultural exclusion — not just financial concern. According to real estate agents on the ground, there’s a growing perception that Brits are no longer as welcomed as they once were.
Spain’s Rising Taxes Push Buyers Toward Portugal
Recent comments from Spain’s prime minister Pedro Sánchez — including the suggestion of doubling taxes for non-EU property buyers or banning them altogether — have sent ripples through the British expat community. Many would-be buyers are now re-evaluating their Spanish property dreams and shifting their focus across the border to Portugal.
“People tell us they were initially looking at Spain but changed their minds after hearing what the government might do,” says Dylan Herdholdt of Portugal Realty on the Silver Coast. “It’s not just about taxes — it’s about feeling welcomed.”
Portugal’s Lifestyle Still a Major Draw
Despite the shift in sentiment, Portugal continues to attract global attention for its laid-back lifestyle, mild climate, and English-speaking communities — particularly in the Algarve. With new direct flights connecting Faro to New York and a continued push from American buyers, demand remains strong.
Visas, Taxes, and Affordability
Though Portugal’s Golden Visa no longer includes real estate investment as a qualifying route, demand from American and British citizens hasn’t slowed. Applications for long-stay “Type D” visas — particularly the D7 (passive income), D8 (digital nomad), and D2 (entrepreneur) — are rising, often paired with Portugal’s updated NHR (non-habitual resident) tax regime that offers flat tax rates for skilled professionals.
- Employment and business income: 20%
- Interest and dividends: 28%
- Rental income: 5–28%
- Capital gains on property: up to 48%
With no inheritance or wealth tax, Portugal still offers a compelling financial case for relocation — especially for early retirees or digital entrepreneurs.
Real Stories: Why These Couples Chose Portugal
Retirement Adventure on the Silver Coast
Dave and Ted Sedgewick left their jobs in environmental science and compliance to retire early and embrace a new lifestyle. After considering Spain and Greece, they landed on Portugal for its healthcare access and affordability.
With a budget of €500,000, they chose the more traditional Silver Coast over pricier Algarve hotspots, securing a new-build villa near Salgado Beach. Using the D7 visa route, they navigated the paperwork themselves and are now enjoying a relaxed lifestyle — complete with animal shelter volunteering and €10 meals with local wine.
Entrepreneurial Escape from the U.S.
For Amber Hill and her partner Charis, Portugal offered an exit from what they saw as cultural unrest in the U.S. The couple, who run multiple businesses, fell for Cascais after visiting Lisbon and Porto. They secured a D2 entrepreneur visa and moved to Estoril, where beachside living is slow-paced and serene.
Their move was helped by migration consultancy GCS, which assisted with everything from business plans to FBI checks. They now live just minutes from the beach and enjoy the calm contrast to American hustle culture.
A Long-Awaited Algarve Dream
Deb and Paul Leonard had been dreaming about Portugal for decades. After several scouting trips since 2019, they finally purchased a one-bedroom apartment in Lagos — just in time to beat another wave of rising property prices.
Though they plan to split time between the UK and Portugal, the D7 visa is on their radar. With four family members working in education, their new home doubles as a holiday base, too. Operating two households isn’t cheap, but their low annual council tax and manageable monthly expenses make the investment worthwhile.
Portugal Still Has an Edge — But the Message Matters
While Portugal’s fundamentals remain solid — from tax incentives to natural beauty — how welcome people feel plays a crucial role in where they decide to plant roots. As Brits reconsider their options, it’s clear that emotional connection and cultural openness are just as influential as financial considerations.
If Portugal wants to remain a top destination for British and international buyers alike, ensuring that new residents feel embraced — not just accommodated — may be the most powerful incentive of all.
