Living in Portugal benefits for POC
Living in Portugal as a person of colour (POC) can be a dreamy experience for some. If you’re from a country with a comparatively higher cost of living and the additional barriers of socio-economic discrimination and violent racism to carry, Portugal can offer a safer and more peaceful alternative pace of life.
That’s not to say the country is a racial utopia by any means. Brazilians, Angolans and countries with a formerly colonised population by Portugal will talk openly of experiencing xenophobia and racism in the big cities, and in 2021 the UN identified that Portugal continues to be defined by its colonial past with many black residents experiencing systemic racism. But for many Brits and Americans shielded by higher spending power, powerful passports and remote jobs, Portugal can offer a more chilled-out pace and higher quality of life. There’s also several financial benefits that living in Portugal as a person of colour creative, digital nomad or freelancer can also experience.
Foreign residents, freelancers and investors can benefit from the low cost of living in Portugal, tax relief schemes (NHR) and 0% tax on cryptocurrencies. Plus, Lisbon, the capital now boasts a burgeoning tech scene, plenty of meet-ups with like-minded entrepreneurs and affordable cafes and co-working spots to get work done.
The cost of living in Portugal
Depending on where you’re from, the day-to-day cost of living in Portugal will vary. But for many POC Americans and Brits, it can be much better than what you’re used to. Restaurant prices in Lisbon for example, are 45% lower than in London, and 48% lower than in Los Angeles. Groceries in Lisbon are, on average, 39% lower than in London, and 49% lower than in Los Angeles and utility bills and transport are also fairly affordable. For example, a subway ride with clocks in at just €1.35 each way.
With these huge differences in the cost of living in Portugal, it’s easy to see why so many black and brown families and singles are choosing to ditch their home nations and move to cities like Lisbon and Porto. You’ll find them on Youtube and TikTok waxing lyrical about the fact they can go to the beach after work in April, or that their local coffee shop offers an espresso and pasteis de nata for less than €3 combined. Money that was once poured into never-ending necessities back home like eye-waveringly small apartments and medicines can be put other things (like pursuing your passions at a Take World writing retreat, for example). Americans also love the private healthcare system, which is a fraction of the cost of what they are used to.
Portugal rent and property prices
Finding good properties to rent in the capital city of Lisbon can be tough. Many POC creatives and business owners turn to housing groups on Facebook to vet potential housemates and share larger flats. It’s possible to rent a room in an apartment with four or five others for under €250 if you look hard, but prices have increased exponentially in the last few years, and exploded post-COVID. Be sure to start your apartment hunting process more than a month in advance as landlords and agents can be slow to get back to you and of course, it helps if you’re actually living in Portugal so you can go and visit places - online viewings are rare.
Monthly rent in Lisbon is almost 60% cheaper than in London where, for a three-bedroom flat it’s £3400 on average (€4050). Lisbon is also 58% cheaper than in L.A. where the average rent for a three-bedroom apartment is $4420 (or €4020).
Some good sites for finding places are:
Idealista.pt
Casasapo.pt
Some good Facebook sites for finding places are:
Buying Property in Portugal
Apartments are selling like hotcakes in Lisbon with many POC living in Portugal choosing to take advantage of the faster buying process (you can complete in around three months) and the comparatively good prices. A one-bed, one-bathroom apartment in Lisbon of 50m² (that’s 538 sq. ft ), is likely to cost between €170,000 and €250,000, while a five-bed, three-bathroom apartment in Lisbon with 250-300m² of space (2600-3300 sq. ft) internally is likely to cost between €850,000 and €1.1 million.
While this still isn’t dirt cheap, for the average twenty-something person of colour Londoner or New Yorker on a freelance salary, it’s considerably better than many are used to.
The Non-Habitual Resident Program
There’s currently a lot of people living in Portugal for the sole reason that they will benefit financially. Ask the average Portuguese person what they think about these tax incentives for foreigners and they’ll spend a good chunk of time bad-mouthing their government (and possibly you), which is probably fair enough. But POC creatives, business owners and freelancers can enjoy several financial benefits such as the Non-Habitual Resident Program, known as the NHR, This is basically it’s a tax scheme that was introduced in Portugal in 2009 which offers foreign residents those living in Portugal reduced tax rates and exemptions in some cases - with the aim of attracting them to the country to boost the economy.
The scheme includes tax exemption on (almost all) foreign income sources, and a reduction in tax rates for Portuguese income sources from ‘high value-added’ occupations, to 20%. Under the scheme, foreign residents and investors living in Portugal do not have to pay wealth tax, and have tax exemption on gifts or inheritance to family members. These tax benefits last for 10 years after you join the scheme. Some business owners and self-employed people don’t pay any tax at all when living in Portugal, if their country has a ‘double tax agreement’ with Portugal. So someone who receives dividends from a UK Ltd company may not pay tax in either country.
You are eligible for the NHR scheme if you:
Are an EU/EEA/Swiss citizen; or
Have the right to reside in Portugal via the Portugal Golden Visa Program; and
Have not been a Portuguese tax resident for a minimum of five years; and
Own a home in Portugal, or have signed a rental agreement of at least 12 months.
And surprisingly, you don’t have to be living in Portugal full-time to be eligible.
Cryptocurrency in Portugal
Into crypto? Luckily Portugal is much more accepting of cryptocurrency than many other European nations. Crypto transactions for those living in Portugal are exempt from VAT, because the country sees cryptocurrencies as a form of payment, rather than an asset.
Employees in Portugal can be paid, and can pay for items, using a cryptocurrency Visa card, and Bitcoin trading can be done tax-free as long as trading is not considered to be your main profession.
Should I consider moving to Portugal?
All foreigners, including the POC ones from countries with a higher spending power, can start a new chapter living in Portugal and probably have a pretty nice time doing so. Necessities such as utilities, rent and food will be cheaper, and if you speak to an accountant about tax exemptions for your business here, or you’re into crypto, it might really be worth your time. There’s lots to consider, such as the impact living in Portugal is having on local businesses and rent prices, as well as the short-term impacts on the economy if you are a digital nomad, but ultimately the country will continue to be attractive to foreigners until the government stops incentivising it.
Find out more about the next Take World creative and writing retreat in 2023!