After seven months of travelling through Europe, looking for the right place to enjoy our retirement, we settled on Porto, Portugal. During our period of searching, we spent time in France, Spain, Germany and, of course, Portugal. And we could have happily lived in several of the places that we visited.
We spent quite a bit of time in France, both city and rural, and we really enjoyed the country.
Our month in Toulouse was very enjoyable. We had a lovely apartment in the centre of the city, so we were able to walk everywhere. The city had a friendly atmosphere and a nice variety of museums to visit. Definitely somewhere that we would have been happy to live.
Paris was a real pleasure to visit, with outstanding art museums and good restaurants. But Paris was never in serious contention as a place to live, due to the cost of living there.
We enjoyed three visits to Bordeaux and, again, we enjoyed being able to walk around the city and found a nice variety of restaurants. Another place that we would have been happy in.
A week in Narbonne gave us an opportunity to try a smaller city. We enjoyed it, but it was perhaps too small for us as a long-term prospect.
We had three periods of house-sitting in countryside settings that allowed us to sample French rural living. All three were enjoyable and exposed us to a different lifestyle in comparison to the cities. Early morning walks with the dogs in beautiful countryside. Day trips to idyllic villages, historic towns and chateaus. Peace and quiet, surrounded by nature. Countryside living definitely has its positives and we enjoyed each of the house-sits. But we agreed that, whilst we enjoyed country living for short periods, we’d prefer to be in a city long-term.
Overall, we enjoyed France and it was in serious contention as a place to live. Bev and I both felt that we’d find it easier to learn to speak French than any other language, as we had some basic French at school and had picked up a bit on previous visits. We were a bit surprised at the cost of living though. Definitely more expensive than Portugal. And then there were the income tax implications to consider.
We had a short visit to Hamburg (to see a Stones concert) and a week in Berlin (although we have visited Berlin previously). We really enjoy Berlin. It is such a vibrant city with so much to see and do. There is an abundance of ethnic food available across the city at very reasonable prices. And public transportation is excellent. It’s also Michele’s favourite city and the place that she’d choose to live.
Being further north, the weather in Berlin wouldn’t be the best in winter. And, again, income tax on pensions has to be considered.
We drove across northern Spain, visiting a few small towns for a few days each. We liked some of the towns better than others, but they were all too small for us to consider as potential long-term locations. But the cost of living was good and so was the food.
Then we spent about four weeks in Barcelona and really enjoyed it. It’s a large city that is easy to get around, either on foot or using the metro system. I loved the art and history that is interwoven throughout the city. There’s a nice variety for eating and shopping and there’s a general ‘feel good’ quality about the place.
I think we would enjoy living in Barcelona, but there’s a price tag associated with the city, in comparison to the smaller towns in the north of Spain. And the taxes in Barcelona are a bit higher than the rest of the country.
Before we set off from Bermuda, my research had suggested that Portugal offered the best value in western Europe. It has a low cost of living and the tax regime potentially offered zero income-tax on foreign income for the first ten years. But we had no idea whether or not we would enjoy living here.
Porto, in the north of the country, is Portugal’s second largest city behind the capital Lisbon. It was our first stop once we reached Europe and we spent the month of July here. We were instantly struck by the friendliness of the people and the history and beauty of the downtown area. But I think it’s fair to say that whilst we liked the city at that point, we weren’t yet in love with it and we wanted to see what other places had to offer.
We returned to Porto for a week in October, this time staying on the opposite side of the river, in Gaia. In July, we’d been staying a bit further out from downtown, so we wanted to try something nearer the centre. The visit in October also allowed us to experience the city outside of the very busy summer months. At the end of the week we concluded that whilst we liked the city, we weren’t sure whether it was large enough and whether we’d get bored being here long-term. So, the European adventure continued.
In January, we headed to Lisbon for a week. Bev had been to Lisbon previously, in the middle of the summer and she hated the intense heat. So much so, that she was reluctant to even consider Lisbon as a full-time residence. But I think our week in Lisbon changed her mind, as we really enjoyed it.
We had a nice apartment in a nice central location, so we were easily able to get around the city on foot and by using the metro and the tram system. It was easy to see that Lisbon offered a wider variety of restaurants and more leisure activities when compared to Porto. That stands to reason, as it is a larger city. But the cost of living is also higher than Porto and there was still the issue of summer heat to think about. But it was certainly in contention as a place to live, and we’d even identified a section of the city that we’d like to live, should we make that choice.
After our week in Lisbon, we headed to Porto for our third visit. This time, we had booked a lovely apartment in the very centre of downtown Porto, and I think that made a difference. Whenever we walked out of our front door, we felt the vibrancy of the city. And it felt good!
And this time, there was a different feeling. This time, Porto felt like home! Perhaps it was the familiarity of having spent time here previously. Perhaps it was because we’d had the opportunity to compare it with other cities. It’s hard to put my finger on why, but within the first week of being back in Porto we agreed that this would be a good place to settle down. Within two weeks of being back, we were hunting for an apartment.
We went to view several apartments but they either didn’t have enough space, or we didn’t like the neighbourhood. And then we found the place. Our new home. A lovely, modern 3-bedroom furnished apartment with 2.5 bathrooms and two parking spaces in the underground garage. It comes with all utilities included (gas, water, electricity, cable TV and internet), a 24-hour concierge/reception and even maid-service. It is in a nice neighbourhood and only two stops on the Metro to the downtown area. We instantly knew that this was the right place for us. We were able to move in on 14th February, so we’ve been here just over a month now. And we’re loving it!
Moving into an apartment with all of the utilities included was great, as it meant that we did not have to establish accounts with different service providers. But moving to another country requires a number bureaucratic applications to be completed. At first glance, it all seems a bit mysterious and daunting. Something that the law firms take advantage of. We were quoted almost €6,000 by a well-known international company to handle the residency and tax applications for three of us. After some online research, I decided to do it myself.
Usually, the first application for ex-pats moving to Portugal is to obtain a Numero de Indentificacao Fiscal (NIF). The NIF is a tax identification number that is used for paying taxes but is also required for purchasing property and some other activities. You don’t have to be a resident to apply for a NIF. However, one of the requirements to get the NIF is to provide a utility bill from within the past 6 months, to prove your current (or most recent) address. As we had been roaming around Europe for seven months, we couldn’t comply with this requirement. To get around this, we had to first register for Portuguese residency.
The residency application was a simple process. A quick visit to the Gabinete do Municipe in town, with the requisite documents and a small administrative fee, and we had our Residency Certificates. Once we had the Residency Certificates, we went back to the finanças office and were able to obtain our NIFs.
The next process was to file an application for Portugal’s Non-Habitual Resident (NHR) tax scheme. To be eligible for NHR status, you must not have been ordinarily resident in Portugal during the previous five years. NHR offers zero income tax on foreign-sourced income for a period of 10 years, and a flat-rate tax of 10% for any funds earned within the country. But closer research and scrutiny revealed a bit of a snag for funds derived from Bermuda. Portugal still regards Bermuda to be a tax-haven, along with many other territories (although that may change soon due to the signing of tax treaties between the two countries). As a result, Bermuda-sourced income is not generally exempt from taxes and, in fact, is liable for taxes at a higher rate than normal. Fortunately, occupational pensions like ours are exempt from taxes under NHR. So, it seems that we can live tax-free for our first 10 years. The actual application for NHR is incredibly easy and is accomplished online.
As residents of Portugal, we are now eligible to access the free health care system. But we still have to complete some paperwork. The first requirement is to obtain a Portuguese social security number. This turned out to be the most time-consuming of the requirements. We turned up at the ‘Citizen’s Shop’ and sat around for 3 hours at the Social Security booth, waiting for our number to be called. When I finally got to the counter, I was told that we each had to complete two forms (which we weren’t aware of) and we also needed to have photocopies of the relevant documents that we could leave with them (we had the documents with us – but not spare copies). So, we headed back home to complete the forms, make photocopies and prepare to return another day.
When we returned with the correct forms and photocopies things went more smoothly. There was still a wait, about one hour and 15 minutes this time. But the documents were soon processed. Now we must wait for about one month until we receive our social security numbers in the mail. Once we have our social security numbers, we will register with the health department and we’ll have access to the free health services.
Other minor tasks were setting up local bank accounts, switching over from pre-paid phone plans to post-paid, and buying monthly passes for the Metro. All being very easy to do.
We’re finding it very easy to settle into life in Porto and we’re gradually finding our feet and enjoying our retirement. We’re keeping busy and active, so it always seems like we have something to do.
I found a nice gym a couple of months ago and visit five nights per week, so I’m quickly regaining my fitness and losing a few pounds in the process.
Bev has dived into language training and attends class five days per week. I’ve also bought myself a bike – a 2014 BMW F800GS Adventure – so I’m looking forward to exploring Portugal once I have my driving licence sorted out. In the meantime, I’ve been buying riding gear and assorted bike-related items.
We’re certainly enjoying Porto, and Portugal, and we’re really pleased with our apartment. We’re happy with our decision to move to Porto and we’re looking forward to visits from family and friends, so that we can share our new home with them. Retirement life is looking good!