The Algarve is not just a holiday hotspot but the preferred relocation destination for a growing number of the world’s affluent. The latest ‘Wealthy Expats in Portugal Survey Report 2024/25’ by the independent research organisation World Digital Foundation reveals key insights into why affluent individuals are choosing this location.
The Algarve is becoming the preferred relocation destination for an increasing number of affluent individuals, not just a holiday hotspot. The latest Wealthy Expats in Portugal Survey Report 2024/25 provides key insights into why affluent individuals are choosing this location.
The report is based on interviews with over a thousand affluent expats and accentuates the appeal of Portugal, especially the Algarve region. It mentions the friendly atmosphere, solid healthcare system, safety, security, and cost of living, as well as the advantageous tax regimes for investors, entrepreneurs, highly qualified professionals, and high-net-worth individuals. Portugal has become a popular choice for affluent families and investors due to its safety and appeal as a place for life, wealth, and assets.
The revised Golden Visa program is very attractive, as it provides the opportunity for dual residency in Portugal and the freedom to travel within the EU Schengen region in exchange for a €500k investment in regulated Portuguese funds. This program now no longer requires property investments, expanding investment options to sectors such as renewables, healthcare, technology, tourism, and hospitality. The new program offers more flexibility and a wider range of investment opportunities, which could benefit both the country and potential investors. Many people invest in a fund and simultaneously buy a home to enjoy the perks of a wonderful life in the Algarve.
The Algarve’s charm also lies in its vibrant cultural scene and diverse, inclusive community. One of our clients, Margie K., an expat from New Mexico in the USA, praises the region, stating she could walk around at any time of day or night without feeling unsafe, which is something she couldn’t say about numerous countries all over the world. The geopolitical tension in Northern Europe and USA feels very distant here. Her husband Tom points out the cultural variety and diversity, combining old-world charm with modern amenities.
Wealthy expats and entrepreneurs have been drawn to Portugal’s favorable NHR (Non-Habitual Residency) tax regime since its introduction in 2009. This tax scheme allowed them to benefit from their worldwide income while living in Portugal, particularly in the Algarve region. Although officially abolished beginning of this year, some families can still qualify for NHR tax status in 2024 under the existing scheme’s specific conditions. To qualify this year, individuals must show their intent to live in Portugal. Each situation needs to be studied case by case.
The NHR tax regime is planned to be replaced by the NHR 2.0 tax regime in 2025. The NHR 2.0 tax regime is expected to benefit tech professionals, entrepreneurs, and startup founders, aiming to make Portugal a hub for innovation and business growth. We expect the new government to potentially make modifications to the outline bill that was initially put in place by the previous government. The new government has revealed its yearning to be investor-friendly while also ensuring that it protects and benefits local individuals.
The luxury real estate market in the Algarve is thriving. According to the the Property Market-Index of the ‘Portugal’s Property Hotspots Report’, demand from wealthy buyers is causing a shortage in supply, leading to significant capital growth. The Algarve is attracting entrepreneurs and wealthy families, benefiting investors with high-quality construction programs meeting international standards.
In the last five years, the real estate opportunities in the Algarve have improved in terms of the quality of architecture and the stunning locations, making these opportunities more appealing. This, along with the quality of life on offer, has contributed to the increased potential of the real estate market.
The demand for central Algarve is also very high due to its rich cultural experiences and luxury developments in the Golden Triangle. The area offers beautiful beaches, fresh seafood, and stunning sea views. Properties in the area boast high specifications and amenities, including wellness and spa facilities, walking and hiking tracks, and year-round sports facilities without air pollution.
In a nutshell, the Algarve offers far more than just sunshine. Its welcoming environment, strategic tax benefits, and solid real estate market make it an appealing destination for the world’s wealthy elite.