Portugal

A Foreigner’s Guide to Living in Algarve, Portugal

Updated: 10 September 2021

Algarve, Portugal’s famous southern coastline, is home to pristine beaches, perfect climate, quality life, and history. With the deep culture, rich cuisine, affordable costs, and lifestyle, it’s not just a holiday destination but a place to live for many foreigners. Expats and retirees from the UK, the USA, and many other countries today choose Algarve as their second home.

Covering an area of 4,997 km, Algarve is home to 438,406 permanent residents. According to statistics from Pordata, 10 percent of the population is expats. This percentage is likely to increase thanks to the growing popularity of the region.

In this article, you’re going to explore the Algarve region better and get more insights before planning your move. Enjoy the read!

Where Is Algarve

Algarve is the historical province of southern Portugal. On the south and west side, the region is engulfed by the Atlantic Ocean, and on the east side, the Guadiana River covers the area. The Algarve is approximately 280 km south of Lisbon. The journey between two regions takes around three to four hours depending on the transport mode.

Living In Algarve

The world knows Algarve as a beautiful holiday destination. But the quality of life offered in the region makes it a great place to live and stay after retirement. Below are some great reasons why you should consider living in Algarve:

Healthcare

Servico Nacional de Saude (SNS), or the national healthcare system of Portugal, adheres to the international care system. Residents in Algarve can access quality health care services at low costs. Moreover, in recent years, the region has seen notable growth in medical tourism. This is a great place for retirees to consider if they’re also looking for hip replacement, aesthetic, and dental care services.

Cost Of Living In Algarve

If your retirement budget is limited, Algarve might be the ideal retirement place for you. The cost of living in Algarve is 30 percent lower than any other country in Western Europe. For merely €1,099 a month, a retired couple can live a modest life in this region. If you prefer a luxurious lifestyle €1,800 will suffice.

Real Estate Options

If you prefer to buy a property, you’ll have a lot of options in Algarve. From luxurious villas to affordable townhouses, the real estate options here are endless. We recommend you speak to a real estate agent to filter out the properties based on your needs and budget.

Shopping

Irrespective of age, we all need a bit of retail therapy once in a while. Algarve has many great shopping malls for seniors to shop. MAR shopping is one of the biggest shopping complexes, including around 86 shops, including an IKEA, 25 restaurants, and a leisure area spread across 8,000 sq meters. There are local markets where you can access fresh food and produce. These markets reflect the local life in the region, and you’ll be able to buy fresh and seasonal food.

Weather

Weather is one of the reasons people fall in love with this place. The sun shines here for more than 300 days, and most of the time, the climate here is stable with Atlantic and Mediterranean influences. Fortunately, you’re going to have more sunshine instead of rain.

Easy Access To Europe

There are flights to Faro available throughout the year from major European cities. You’ll find many low-cost airlines and national carriers here. And once you get here, you’ll be impressed with a good road system connecting to the central urban regions. Thanks to transportation facilities and costs, you can easily travel around Europe during your stay in the Algarve.

Quality Of Life

Portugal is one of the safest and most peaceful countries in the world. The people here are quite friendly and hospitable. The cuisine is unique, too. The peace, safety, facilities, and picturesque landscape allow Algarve to offer a high-quality life.

Tax Flexibility

The legislation in the country allows expat retirees to receive their pension tax-free for 10 years. If you’re interested to learn more about retirement tax and legislation, read our ultimate guide on Retiring in Portugal.

Buying Or Renting A Property In Algarve As A Foreigner

When considering relocating to a new place, one of the main concerns is the restriction of buying property as a foreigner. However, Portugal has flexible regulations and imposes no restrictions on foreigners buying or renting property in the country.

Buying A House In Algarve

Algarve promises a quality life which encourages people to retire and settle here. If you’ve too decided on that, you can buy a property in Algarve without much hassle. While there’s a certain procedure that you’ll follow, the process is quite straightforward.

Property Prices In Algarve

Property prices in the Algarve region differ depending on the city. The below chart will give you an idea on property prices in city centers. Please note that the prices fall outside the city centers.

Below table shows the average price of various neighborhoods per m².

  Average Price per m²
Faro €2,170
Albufeira €2,463
Lagos €3,021
Tavira €2,000
Portimão €1,800

Documents To Submit To Buy Property In Algarve

To buy a property in Algarve, you’ll submit proof of identification. It can either be a Portuguese ID card or a passport. You’re also required to provide a Portuguese tax number which is also called NIF. You can acquire this from the government finance office by showing your passport and current address proof.

It’s also recommended to open an account in a Portuguese bank when buying a property in Algarve. This will prevent you from constantly changing the exchange rate in the region.

Getting Professional Help

Once you’ve found the property you want to purchase, hire a lawyer. A law professional will perform due diligence, advise you on the changes and create a promissory contract for you. During the scrutinizing process, the lawyer will be checking, if you have all the right documents,

After checking all the documents and verifying that they’re legally correct, the lawyer will draw up the first binding contract. This contract is known as a promissory contract that contains vital information such as the final price, what is included in the price, the final deed date, all the terms and conditions of the contract.

Once the contract is completed, you and the seller will sign it. This is the stage when the deposit is paid, and this amount is non-refundable.

The Final Deed Or The Escritura

The Final Deed is signed and paid between 30 and 60 days after signing the Promissory Contract. The duration can vary based on your situation. The buyer, the vendor, the lawyers of both parties, the bank representative (if you’re taking a mortgage), and the notary are to be present at this stage.

Property Buying Costs In Algarve

When buying a property in Algarve, Portugal, you’ll bear the following costs:

  • Legal Fees: You’ll be paying certain legal fees to the lawyer for checking the documents and ensuring that everything’s correct.
  • Notary Fees: Notary will sign the Final Deed that will complete the purchase of the house. Certain notary fees vary based on the contract.
  • Property Transfer Tax (IMT): This cost is paid when you transfer the property in your name. The percentage of this depends on whether your property is a primary residence or secondary property, rental property, or holiday property.

Renting A House In Algarve

Renting a house in Algarve entails of below steps:

  • You get a Portuguese Fiscal Number or Número de Identificação Fiscal (NIF).
  • You submit identification proof such as a European ID card or a passport.
  • You pay the deposit that includes rent for a month. You might also be required to pay a security deposit.
  • Sign the rental contract which includes full names of the tenant and landlord, data of birth, nationality, lease duration, review date of the lease, and notice period that landlord must provide if he/she’s not renewing the lease.
  • You may also need a guarantor in some conditions, especially if you are renting a property for the short term.

For more information on the property buying process, check our Buying Property in Portugal article.

Best Places To Live In Algarve

If you’ve decided that you are going to live in Algarve, it’s time to find the right location. Here are some of the best places to live in Algarve Portugal:

Albufeira

Albufeira is the southernmost area of Algarve and among the most popular places in Algarve. It’s a mix of classic Portuguese elegance and contemporary vibes. There are some amazing beaches here and thanks to the good weather, you can enjoy yourself all year long. Above that, the historical significance presents itself in the architecture of the whole region. Lastly, the welcoming inhabitants of Albufeira add to the beauty and allure of the area.

Lagos

Combining contemporary architecture with traditional vibes, Lagos is among the most popular cities in the region. The tranquil beaches with turquoise blue water are a great sight to wake up to. There is something for everyone in this town, from the adrenaline-pumping hiking spots, fun water parks, and exciting museums. Lagos is home to the longest beach in the city, spawning the length of four km.

Faro

The capital city of Algarve, Faro is the most popular place in the Algarve region. Faro has a lot to tell in terms of history and culture, and the stone-paved paths and historic walls say a lot. This is the town where most of the international companies, premium restaurants, and high-end fashion stores locate themselves. There’s a blend of busy streets and quiet regions, making it an ideal place for retirees as well. If you’re a looking for a place to buy a home in the Algarve region, Faro real estate can be very promising.

Quinta do Lago

Quinta do Lago is an ideal destination if you’re into luxury. With views of nature and ocean all around you, it’s a great place to start a new life. Quinta do Lago has many golf courses and is a favorite destination of British expats. Quinta do Lago real estate scene is famous for its luxury housing options.

Tavira

Tavira is a unique destination to consider if you prefer less crowds. This town is brimmed with traditional Portuguese houses, cobblestone streets, and tons of churches. There are protected waterways, the Natural Park of Ria Formosa, and bird sanctuaries down the south.

Silves

Silves is steeped in the rich history of the region. Irrespective of the time of the year, there are so many things and places to explore here. It’s located against the hills and on the banks of the Arade river. Silves is engulfed by lemon and orange groves and symbolic castles.

How To Live In Algarve As A Foreigner: Residence Permits And  Entry Visas

Living In Algarve As An EU Citizen

If you’re an EU citizen, you’re required to apply for a registration certificate to stay in Algarve, Portugal for more than three months. Individuals can apply for this certificate at the local council 30 days after their three months of entry into the country. The cost of acquiring this certificate is €15 for adults and €7.5 for children. And the registration certificate is valid for up to five years. Family members of EU citizens who don’t possess European nationality need to apply for a residence card to live in Algarve for more than three months.

Living In Algarve As A Non-EU Citizen

If you’re from a non-EU country and plan to live in Algarve, you will need to apply for a Portuguese residency visa before your arrival. You’ll also need to apply for a residence permit once your visa expires.

Living In Algarve As A US Citizen

If you’re planning to live in Algarve for more than 90 days, you’re going to need a residence permit. The process is usually very easy and can be arranged quickly.

Moving To Algarve With Portugal Golden Visa

The Portugal Golden Visa refers to a residence visa that is issued to non-EU citizens who invest in Portugal via property acquisition, fund investment, capital transfer, donation or company set up. This program is highly favored by expats as it offers a fast route to permanent residence. If you’re planning to live in Algarve for a long term and don’t want to deal with too much bureaucracy, Portugal Golden Visa might be the ideal solution for you.

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Cost Of Living In Algarve

Algarve is considerably more cost-effective than many other regions of Portugal. A couple can live here on €800 – €1,200 per month. However, the cost of living in the region will vary based on the lifestyle you have.

Rental Prices In Algarve

Renting a place in Algarve is impressively affordable considering the rents in other European countries. For a standard one to the three-bedroom apartment, you can expect to pay around €300. Depending on the location and the kind of apartment you choose, you can expect to pay between €400 and €700. If you’re on a tight budget, then consider renting property away from the main coastal lands. If you’re looking for a long-term rental, try to arrange it before the start of peak season.

Cost Of Food In Algarve

In Algarve, you can access fresh vegetables, fruits, meat, and fish at affordable rates. You would need around €300 for monthly groceries.

Here’s an approximate of the costs of basic food items as listed on Numbeo.

 

  Average Price
Meat (kg) €13
Chicken (kg) €4.5
Eggs (a dozen) €1.70
Milk (one liter) €0.60
Banana (kg) €1.10
Apple (kg) €1.50
Bread (500 gr) €1.10
Rice (kg) €0.95
Potatoes (kg) €0.85
Onions (kg) €0.95
Local Cheese (kg) €7
Wine (mid-range, bottled) €5

Restaurant Costs in Algarve

If you’re eating at a cheap restaurant, then a standard meal will cost you €9. A meal at a fast-food joint will cost around €6. For a meal in a mid-range restaurant, you can expect to pay around €25. And if you’re eating at an expensive restaurant, the cost will be €35 per person.

Internet and Utility Costs in Algarve

Basic utilities, including heating, electricity, cooling, garbage, water, etc., for a standard place will cost around €99.

For internet, you can expect to pay around €40 per month. One minute of prepaid mobile tariff local will cost you €0.20

Getting Around in Algarve

In terms of public transportation, you can access trains and buses to get from one place to another. But if you’re looking for more convenience, you can rent a car as well. 

Buses are the most widely used public transportation in the city. A day’s pass cost an average of around €3 to €7.

Traveling through rail is very popular and cost-effective in Portugal. If you’re traveling long distances, then you can consider taking the train. And if you buy a train ticket a week in advance, you will acquire a good discount (40percent to 50percent). The prices are very affordable, for instance, a ticket from Faro to Lisbon would cost you around €12.

You can also rent or buy a car to get to places if you plan to stay here for a long duration. Additionally, you can also rent a car for occasional use. You can do that from either Faro airport or a local rental company. The price of renting a car starts approximately €25-€30 per day in summer and €10 in winter.

Weather in Algarve Portugal

For most of the year, the Algarve region experiences a warm climate with a short period of rainfall. It has one of the best climates in all of Europe. Combine the sunny climate with the scenic beauty and you get a perfect place to live!

Weather in Algarve in Winter

The coldest months in Algarve are December, January, and February. The average air temperature during this time remains between 9°C and 16°C. There is a considerable drop in the temperature at night and it drops to 4-6°C.

Weather in Algarve in Summer

Algarve experiences the hottest months, from June to September. If you’re in Algarve during summer, you’re going to witness little or even no rain. During June and September, the temperature can go above 30°C. July and August are hotter. The temperature remains 30°C and above. Sometimes it reaches up to 40°C. 

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