Threats of bans or tax hikes, language difficulties and an uncertain fiscal regime have driven Britons to swap moving to Spain to neighbouring Portugal, relocation experts said.
Retirees, digital nomads and families are opting for Portugal because they are attracted by the relaxed lifestyle and the widespread use of English. They’re also worried about tax proposals made by the Spanish government.
A record number of foreign citizens moved to Portugal in 2023 – up 130 per cent from the year before – with the British the third most popular group after Brazilians and French, according to the AIMA, the migration agency.
Some 47,409 British arrived between 2023-24, a rise from 45,265 in 2022.
Property companies and relocation agents said some Britons had decided to swap Spain for Portugal because of tax proposals by Spanish Prime Minister Pedro Sánchez, who announced in January he might ban or double taxes for Brits or other non-EU non-residents.
Mr Sánchez may struggle to pass the measure in parliament as he presides over a minority government.
Lisbon is a top destination for tech startups in Europe (Photo: Getty)Dylan Herdholdt, sales manager of estate agent Portugal Realty on the Silver Coast in Portugal, said since a UK property conference last month, he had received five enquiries from people who wanted to swap Spain to Portugal.
Four of these were planning to move to Portugal, not just buy a holiday home.
“At a recent Place in the Sun conference in Manchester, I had a lot of people coming to the stand to talk about that. Lately, I found a lot more people are looking at Portugal instead of Spain, not just because of the tax but because it is cheaper,” he said.
“The reason was the language, the taxation issue not just at purchase point but if they were renting out the property and the possibility of foreigners not being about to buy something.”
Dave Williams, co-founder of NomadX, which helps digital nomads move abroad, said: “We have seen more Britons choosing Portugal instead of Spain in recent years especially as Spain signals higher taxes on non-EU residents.
“Portugal feels like a safer bet for longer-term residency. The tax regime has been more predictable, and the remote work digital nomad visa has added to the momentum.
“British expats are drawn to Portugal’s strong communities, lower cost of living, lifestyle, friendliness and the fact English is widely spoken – it just feels easier.”
Mr Williams added: “Spain’s regulatory uncertainty has created hesitation while Portugal has doubled down on attracting remote workers, entrepreneurs and startups and in addition to being popular with retirees.”
Brian McClafferty, 48, who is originally from Reading, moved to the Algarve almost two years ago as he found Portugal offered more help than Spain to support his start-up company Where is Kevin, which plans travel needs for clients.
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“I did a lot of stuff in Spain and the help you got in Portugal for my start up company seemed more than in Spain. Since I have been here, it has turned out to be perfect to have a start up. Lisbon was voted top tech city in Europe by the European Union. Lisbon was voted in the top ten tech hubs by the Financial Times,” he said.
Golden visas have been scrapped in Portugal but there are a series of other visa options.
The Type D long-stay visas and Type D7 passive income/retirement visas are the most popular route for Britons moving to Portugal, according to Global Citizen Solutions (GCS), a Lisbon migration consultancy.
But the D8 (digital nomad) has gained popularity with the D2 (entrepreneur) visa, according to Geoffrey Graham of Edge International Lawyers.
Mr Graham said: “People don’t just come because the Portuguese are nice people. Until 2023, Portugal had a very attractive tax regime for new residents. There is no inheritance tax for close family, no wealth tax, competitive rates on investment income and a comparatively low rate of corporate tax (20 per cent).”
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