Number of Brits living in Portugal soars over 34% from 2019 to 2020

The number of Britons living in Portugal increased 34.6% between 2019 and 2020, according to the latest data from the national border and immigration service SEF.

Reacting to the news, the Portuguese Chamber of Commerce in the UK described the increase as “well beyond anything that has been seen in recent years” and has seen Britons become the second largest group of foreigners living in Portugal.

“Several factors have played into the increase, from Brexit to Portugal’s non-habitual resident tax scheme, which allows many foreigners (including Brits) who move to Portugal to benefit from huge reductions in their income tax bills,” the chamber of commerce said in a statement to the press.

As it points out, the non-habitual resident tax incentive was introduced in 2009, exempting individuals with certain sources of income from overseas (including pensions) from paying tax on that income. In its 2020 budget, Portugal replaced the exemption with a 10% tax rate – “still well below what would be payable in many other countries”.

Meanwhile, Brexit has also played a role in pushing many families towards Portugal, the chamber said, adding that from 2011 to 2015, the number of Britons living in Portugal either shrank, or grew by a maximum of 4% per year.

“Then, in 2016, Britain voted to leave the EU. That year, the number of Brits living in Portugal shot up by 13%. It rose again, by 16%, in 2017 and then by 18% in 2018. Now, the latest SEF report has shown a jump of 34.6% from 2019 to 2020, showing a total of 46,238 Brits officially resident in Portugal in 2020,” it added.

Britons now account for the second largest group of foreigners living in Portugal, behind only Brazil. In 2016, Brits made up “only the sixth largest group”.

“Portugal’s lifestyle benefits have long made it an attractive destination for British retirees, and we’ve seen a notable increase in those looking to enjoy their retirement here over the past few years. The affordability of life in Portugal and the longer life expectancy here both play into this,” said Christina Hippisley, General Manager of the Portuguese Chamber of Commerce in the UK.

“At the same time, we’ve seen a rising number of younger families moving to Portugal, attracted by the country’s excellent international schools, laid back pace of life and – for many – its location within the Schengen Zone,” she added.

The chamber also commented on how “the lifestyle on offer in Portugal – and in particular the Algarve – is certainly suited to family living.

“From its properties with pools and extensive outdoor space to the array of sports and leisure activities available, the Algarve is an excellent choice for health-conscious families looking to raise their children in the sunshine,” it said.

Christina Hippisley, General Manager, Portuguese Chamber of Commerce in the UK