Spain Versus Portugal: Visas, Real Estate, And More…

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Best place to live or retire in Europe?

For years we’ve been shining the spotlight on Portugal’s Algarve region… and with good reason. It checked every box on the would-be retiree’s list: great weather, high-quality health care, turn-key residency options, beautiful beaches, welcoming expat community, and low cost of living.

However, expanding global attention has done what it does. Prices are notably higher in the Algarve and generally across Portugal—both for daily costs and especially for property—than when we first directed your attention to this part of the world.

We’ve identified an alternative that, in key parts, is as sublimely affordable as Portugal was a decade ago.

I’m talking about Spain.

Cost of living is important, of course, but it’s but one point to address when shopping for where to reinvent your life in the Old World.

Let’s see how Portugal and Spain stack up against each other otherwise…

The Pros And Cons

Accessibility

Spain

It’s easier to access the Costa del Sol than the Algarve through Málaga Airport. It has flight connections to 60 countries (including one direct flight to North America by way of Montreal, Canada) whereas the main airport in the Algarve, Faro International Airport, only connects to 16 countries.

Cost Of Living

Spain

The Algarve and the Costa del Sol have been transformed over the past 20 to 30 years. No longer rustic seaports and fishing villages, towns in these regions have seen major growth and development, with infrastructure upgrades to support the changes. With this has come an increased cost of living, as well.

The Costa del Sol is touristy, so it can be more expensive than parts of the Algarve, but generally speaking, life in Spain comes at a lower cost than life in Portugal.

Real Estate

Portugal│Spain

Spain has six times more coastline than Portugal. This makes it a more competitive market… with many more options for the property buyer. It’s increasingly difficult to find anything affordable in the Algarve within steps of the sand. But in Spain, you can still find attractive coastal property for less than US$200,000. On the city scene, while prices in Porto and Lisbon skyrocketed in the last decade as foreign buyers scrambled for Golden Visas, Madrid and Barcelona are relatively affordable.

Property markets in both the Costa del Sol and the Algarve are hot. A recent spike in foreigner buyers has led to a severe lack of inventory in both markets.

Climate

Portugal│Spain

What qualifies as perfect weather is subjective, so it’s impossible to pick a winner in this category…

The southern tip of the Iberian Peninsula boasts the best weather in Europe, and the climate in these two regions is very similar. Both get 300-plus days of sunshine a year and minimal precipitation. Summers are dry and hot, and winters are mild and wet in both.

If you want higher temperatures and more sunshine year-round, go to the Costa del Sol. It’s warmer, influenced by the Med instead of the Atlantic. In July-August, the daily mean is over 78°F (26°C) versus the Algarve’s 73°F (23°C).

Winters are proportionately cooler in the Algarve as well… This might be a good thing or a bad thing, depending on your preferences.

Quality Of Life

Portugal│Spain

Again, it’s impossible to pick a winner…

Expat offerings in the Algarve versus the Costa del Sol are neck and neck. Both offer stunning coastlines with world-class beaches, welcoming expat communities, golf courses, hospitals, charming historical villages, and more…

Both cultures are strongly family oriented, and in the small towns that dot the hillsides, a simple, traditional village lifestyle dominates. Both destinations offer laid-back lifestyles—the opportunity to take your foot off the pedal when it comes to pace of life.

Ease Of Residency

Portugal

Portugal is the easy winner here… It offers the D7 or Passive Income Earner visa, which you can qualify for quickly and easily with about 1,200 euros of monthly income.

Spain’s equivalent to this program, the Non-Lucrative Visa, has more onerous requirements, including a higher qualifying amount for income (about 2,150 euros per month).

Spain and Portugal both offer Golden Visas programs. For Spain’s, you need to buy property worth 500,000 euros. For Portugal’s, the qualifying amounts range between 280,000 euros and 500,000 euros, but you’re required to purchase in low-density (potentially undesirable) areas of the country.

Infrastructure

Portugal│Spain

Infrastructure is about on par in the Algarve and the Costa del Sol… If you settle on the coast of either country, you will most likely need a car to get around. Public transportation is not well appointed, but the roads and highways are well-marked and high-standard in both places.

Likewise, things like electricity, internet, garbage collection, etc. are on par in both places.

Taxes

Portugal

Portugal is more welcoming to foreign retirees than Spain from a tax point of view. Under its nonhabitual resident (NHR) scheme, pension from foreign sources is taxed at a flat rate of 10%. Spain has no such scheme.

Both Spain and Portugal have tax treaties with the United States and Canada, so double taxation isn’t a concern.

Health Care

Spain

Spain has the seventh-best health care in the world according to the World Health Organization’s rankings. Portugal comes in at #12, so it’s not far off of Spain’s lead… However, expats across Portugal complain of long wait times to receive care in the public health care system.

Ease Of Settling In

Portugal

Both the Costa del Sol and the Algarve have big, well-established expat communities, mostly made up of retirees from the U.K. That said, English is widely spoken in Portugal. Not so much in Spain…

Both Portugal and Spain boast many of the same attractions and have lots to offer retirees. Here are some of the advantages we’ve found that Spain holds over Portugal…

Language Barrier

Spain

With so much Latin American influence in the United States, you likely have at least some basic Spanish phrases… which can make it less daunting than starting a language from scratch. If you want to begin learning before you go, it’s also easy to find Spanish classes in almost any U.S. town.

Warm Water

Spain

If you’re fond of sea swimming, but aren’t a fan of cool Atlantic temperatures, then you may prefer Spain. Both countries have stunning coasts and beaches, but only Spain has Mediterranean coastline where water temperatures in the summer range between 76°F and 82°F (24-28°C).

City Lifestyle Options

Spain

If you’re after a cosmopolitan lifestyle, Porto and Lisbon are your only real options in Portugal. But from Bilbao to Barcelona, Madrid to Málaga, Seville to Santander, Spain has many more options for you to explore… and all major cities are connected by an excellent transport system.

One city in this country is attracting a lot of attention right now.

Valencia, Spain’s City of Oranges, has just won the 2024 European Green City Award.

It ranked as the third Most Innovative City In Europe in 2022, when it was also named World Capital Of Design and came first of 50 in InterNations’ Expat City Ranking.

Until next time,

Kathleen Peddicord
Founding Publisher, Overseas Opportunity Letter