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The 9 Best Places to Live in Portugal

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Portugal is a top tourist destination thanks to a winning combination of beautiful beaches, a warm climate and a relaxed pace of life. It is also regarded as one of the most welcoming European countries, with large numbers of expats relocating to Portugal’s cities and regions and finding it easy to adapt.   

Still, if you’re considering moving to this fascinating country situated on Europe’s southwestern tip, you need to know the best destinations and compare the pros and cons of each. On top of that, you need to consider the extent of the investment opportunities and tax incentives available. 

Wherever you hanker to live and invest, let Nomad Capitalist look after all your residence needs in Europe and beyond. We can help you determine whether mainland Portugal or an island like Madeira is best depending on factors such as the cost of living, real estate and the availability of health and education facilities. 

So, whether you’re an investor, business owner, digital nomad or retiree, here are the nine best places to live in Portugal. 

Best Places to Live in Portugal

9. The Azores

The Azores, Best Places to Live in Portugal
The Azores are beautiful islands.

The Azores is a North Atlantic Ocean archipelago located around 1,000 miles (1,600 km) west of the Portuguese mainland. There are nine major islands, with the most significant island being São Miguel, where the capital, Ponta Delgada, is located. English is widely spoken on the larger islands, but you will need Portuguese to get by on the smaller isles of the Azores. 

Residents of the Azores enjoy a maritime subtropical climate with moderate temperatures all year round. While real estate prices in the Azores can vary based on location and size, property is relatively affordable compared with mainland Portugal and the capital, Lisbon. For example, a recent search uncovered a three-bedroom apartment in Ponta Delgada, near the University of the Azores, for €159,950. 

While the non-habitual resident (NHR) scheme, which allowed expats to benefit from reduced tax rates on Portuguese-source income, has been cancelled, the country remains an attractive prospect for its lifestyle and affordability. 

8. Alentejo

Alentejo, Best Places to Live in Portugal
Alentejo is a charming choice in Portugal for expats.

Situated in southern Portugal near the Algarve, Alentejo is Portugal’s agricultural heartland and largest region. It, too, has stunning beaches and coves along its coastal edge, but it’s better known for its rolling countryside with all manner of crops, cork forests, vineyards and olive groves. 

In fact, this rural area produces two-thirds of the world’s output of cork.

With an average population age of over 70, the Alentejo region may be ideal for retirees, but it is not for everyone. 

Alentejo’s laid-back charm has attracted foreign creatives to buy homes in the area. These include the French fashion designer Christian Louboutin, Belgian architect Vincent Van Duysen and German artist Anselm Kiefer. 

Expats who move there are drawn to the fact that Lisbon is just over an hour by car. They also go there for Alentejo’s stunning hilltop towns, where you can sample delicious yet underrated locally produced wines.

7.  Madeira

Madeira, Best Places to Live in Portugal
Would you like to live in Portugal in the city of Madeira?

Madeira is one of the two inhabited Islands, the other being Porto Santo.

Like the Azores, the Madeira Islands are a North Atlantic Ocean archipelago. Major island industries include tourism and the production of the famous eponymous dessert wine. The capital, Funchal, is the 8th biggest city in Portugal, with a population of just over 100,000.

Madeira has become attractive to foreign investors looking to grow their luxury real estate portfolio. €377 million was invested in Madeira’s property market in 2022, with most buyers coming from North America, the UK, Germany and France.

Funchal’s most famous son is soccer superstar Cristiano Ronaldo. He owns a seven‐story mansion in his hometown. The player has partnered with Portugal’s largest hotel group to establish a portfolio of five Pestana CR7 hotels. 

The company now plans to extend the brand into real estate with the €50 million construction of an apartment complex in Praia Formosa. Known for its Free Trade Zone, this Portuguese territory also offers lucrative tax benefits for companies, with a low corporate tax rate of 14.7%.

6. Aveiro

Aveiro, Best Places to Live in Portugal
Aveiro has its own unique vibe.

West Coast Aveiro borders the ocean. Here, you’ll find colourful moliceiros, the boats traditionally used to collect algae and seaweed, now used for Venice-like sightseeing trips. The 17th largest city in Portugal, Aveiro has a population of around 55,000. It is a striking place with canals, Art Nouveau buildings, a cathedral and museums. 

Aveiro property prices increased by over 15% in 2022, but investing there still looks like a good long-term bet. A rail network expansion project that includes Aveiro is set to connect Portugal’s largest cities with high-speed services.

5. Braga

Braga, Best Places to Live in Portugal
Braga is a nice spot to live in Portugal.

Braga, the fourth biggest city in the country, is home to just over 120,000 inhabitants. It is located in northern Portugal with good rail and road connections to Porto. A historic city, Braga was the seat of the Portuguese court from 1093 to 1147 and is the oldest city in the country, being founded by the Romans in 16 BC. It is considered one of the happiest metropolises in Europe and one of the best cities in the world to retire in.

This northern city is also crypto-friendly. In May 2022, a historic milestone was reached there when an apartment was sold for three Bitcoins – Portugal’s first-ever 100% crypto transaction.

4. Coimbra

Coimbra, Best Places to Live in Portugal
Coimbra has a lot of history and rich cultural heritage.

Coimbra is a city and municipality in west-central Portugal. With close to 107,000 inhabitants, it’s the sixth-largest city in Portugal. Parts of Coimbra’s downtown, including the Renaissance-era thoroughfare, Rua da Sofia, have UNESCO World Heritage status.

During the Middle Ages, Coimbra was Portugal’s capital for more than 100 years. It is where you will find the country’s oldest and most prestigious university. Well connected by train to both Lisbon and Porto, Coimbra guarantees a low cost of living in comparison with areas more popular with tourists.

Attractions include Lola des Maias, established in 1931, which offers traditional tailored suits and designer clothing and Camponeza, a gourmet market that doubles as a nighttime venue.

3. Porto

Porto, Best Places to Live in Portugal
Porto is a good spot for those looking to live in Portugal.

Porto, located on the banks of the Douro River estuary in northern Portugal, is the country’s second‐largest city, with just under 250,000 residents. It is 175 miles (280 km) north of Lisbon. An international airport offers flights to and from a wide-ranging selection of global destinations.

Porto’s historic centre is a UNESCO World Heritage Site and a stroll around its old town will affirm why it is one of the best cities in Portugal. 

The great export of Porto (port wine) is now a world-famous regional drink only made in the Douro Valley. This northern city has a rich culinary tradition that includes caldo verde, a green soup winter warmer. 

2. Lisbon

Lisbon, Best Places to Live in Portugal
City life in Portugal’s capital city is attractive.

Like Porto, Lisbon is a safe city that attracts remote workers drawn to increasingly popular coworking hubs with high-speed internet connections. With just over 515,000 inhabitants, Lisbon has twice the population of Porto.

As you would expect of a capital city, particularly one as charming as Lisbon, it attracts large numbers of expats. The cost of living may be higher, but there are more facilities and services than in out-of-the-way locations, like English-speaking doctors. 

You’ll never tire of navigating the sunny streets of Lisbon’s beautiful city centre with its distinctive yellow cable cars. 

Cascais is known as Lisbon on Sea, and this coastal town is a 25-minute train journey from the capital. Geographically, it forms part of the Lisbon District and has plenty to offer, with trendy beach cafés where you can unwind and watch the world go by. 

1. Algarve

Algarve, Best Places to Live in Portugal
The Algarve is one of the more popular Portuguese locations.

The Algarve region enjoys some of the warmest weather in Portugal. As well as its picture-perfect beaches, the Algarve is renowned for its golf courses. There, you can combine your passion with real estate investment in apartments, townhouses and villas that adjoin golf clubs.

Popular Algarve hotspots include Tavira, which enjoys some of the best weather in the country. It is close to the Spanish border, and its beautifully preserved old town sees traditional whitewashed houses decorated with colourful tiles. The tourism industry of Lagos in the western Algarve has seen the development of high-quality coastal real estate close to the family-friendly beaches.

Faro is a small city of 70,000 people, with a far more affordable cost of living than Lisbon. Its historic centre includes city walls (Muralhas de Faro) and a vibrant town square that attracts both locals and visitors. Faro’s airport is small but is well connected to the rest of Europe and beyond.

Living in Portugal 

Living in Portugal 
Lisbon is the capital city of Portugal.

Living in Portugal is affordable and the climate is pleasant, with over 300 days of sunshine a year. This has seen the country become one of the most popular European destinations for expat retirees.

Portugal is family-friendly, too, with good state education options. 

It might also be easier to acclimatise in a jurisdiction where English is widely spoken. With a less developed economy than some of the bigger European Union players, you can still find good-value real estate and an affordable cost of living. Looking to move overseas and gain access to lucrative investment opportunities while availing of lower taxes? Become a client, and we’ll show you how to go where you’re treated best.

Living in Portugal: FAQs

Is Portugal a safe place to live? 

As a whole, Portugal is pretty safe. That’s according to the Global Peace Index, which ranks Portugal at number seven, with only Iceland, New Zealand, Ireland, Denmark and Austria considered safer.

Will I pay lower taxes in Portugal?

In terms of taxes, there may be better deals out there if you want to live in Europe. Places like Italy and Greece and tax-friendly countries like Cyprus, Malta and Ireland may be worth considering. This is particularly the case since Portugal scrapped its non-habitual resident tax incentive. 

Can I get by speaking English in Portugal?

Generally speaking, yes, but it depends on where you are. English is widely spoken in Faro and across the Algarve region. However, sharing a border with Spain has resulted in Spanish, rather than English, being the second language of most households. There are more rural communities where only Portuguese is understood.

Where do most expats live in Portugal?

The Portuguese capital, Lisbon, is home to people of over 80 nationalities. Its sheer size means more foreign nationals reside there, but the expat population continues to grow in the other cities.

How can I become a resident of Portugal?

Portugal’s Golden Visa is a fast-track residence-by-investment program that grants non-EU and European Economic Area (EEA) citizens a Portuguese residence permit in exchange for a five-year investment in the country. This involves a donation of €250,000 or an investment of €500,000. 

Can I become a Portuguese resident by investing in property?

No. New legislation passed in October of 2023 closed the path to Portuguese citizenship through property investment. 

Is Portugal Right for You?

Portugal Country Overview 2

Portugal is a popular destination for expats. The culture, natural beauty and overall welcoming environment and locals make it a good choice for those hoping to establish themselves in the EU.  

It also has a fairly good tax scheme for those who qualify. However, choosing where to set up your second residence or permanent residence can be tricky. As you can see from this article, there’s even diversity and complexity in choosing which city to move to in any given country. 

That’s where our Nomad Capitalist team can help. 

Our international team of experts can help you find the best place to settle. Whether you’re seeking a new home, want a Plan B location for the future or simply want to expand your financial options, we can help. Contact us today.

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