Are you thinking about becoming an expat? I’ll explore two possible options in this guide on Portugal vs Spain for expats.
Tax Residency Spain vs Portugal for Expats
Regarding taxes, both countries offer decent incentives to professionals.
Spain has something called a “Beckham Law”. This is for “special” expats. With this type of tax regime, expats will be taxed as non-residents.
Because of this, they’ll be charged a flat 24% on all Spanish income up to €600,000. Anything after that will be 47%. This is quite favourable considering Spain’s normal tax law can exceed 45% in the lower thresholds.
The duration for this residency is 6 years and expats wanting to join the country through the Beckham Law should not have been a Spanish tax resident for at least 5 years.
Portugal, on the other hand, used to have a program called Non-Habitual Residency (NHR), however, this has now ended. The new program is Tax Incentive for Scientific Research and Innovation (IFICI).
Under this regime, eligible new residents will pay a flat tax fee of 20% of their income. This is a huge reduction on standard progressive tax rules which go up to 45%.
It’s also important to note that non-local income under each regime will not be taxed for the duration of the stay.
Capital Gains & Inheritance Tax
| Tax Type | Portugal | Spain |
| Capital Gains Tax | 28% flat, with long-term discounts (up to 30% off after 8 years). Primary home gains exempt if reinvested. | 19%–28% progressive, no long-term relief, often higher on large gains. |
| Inheritance Tax | No tax for spouses, children, or parents; small stamp duty (0.8% or 10%) for others. | 7.65%–34%, varies by region; close family often gets major reductions. |
Residency Requirements: Golden Visa vs Passive Income Visas
When comparing residency requirements for expats in Portugal vs. Spain, the residency requirements are somewhat similar.
| Feature | Portugal’s Golden Visa | Spain’s Golden Visa | Portugal’s D7 Visa | Spain’s NLV |
| Investment | €500K in funds, €250K in cultural projects, or job creation | €1M in stocks/deposits, €2M in bonds | ~€820/month (€1,230 for a couple) | ~€2,400/month + ~€600 per dependent |
| Residency Requirement | ~7 days/year for first year, 14 days afterwards | 1 visit/year | Must reside most of the year | Must reside most of the year |
| Path to Citizenship | 5 years with minimal stay & language test | 10 years of full-time residency & language test | 5 years | 10 years |
| Healthcare Access | Eligible for public healthcare (SNS) | Eligible for public healthcare | Eligible for public healthcare | Eligible for public healthcare |
| Private Insurance Cost | €50–€100/month | €70–€150/month | €50–€100/month | €70–€150/month |
| Best For | Investors seeking quick EU citizenship with minimal stay | Investors wanting flexible residency without tax obligations | Retirees, digital nomads, passive income earners | Retirees or passive income earners with higher financial means |
Investment Opportunities: Real Estate & European Compliant Bonds
Both countries offer exciting investment opportunities, however, Spain is better for those looking into larger markets.
| Category | Portugal | Spain |
| Real Estate Market | Strong rental yields (~6-7% in Lisbon, Porto, Algarve). No restrictions on foreign ownership. Moderate property taxes. | Larger, more liquid market with regional variations. Some restrictions in coastal/security zones. Rental laws vary by region. |
| Rental Yields & Taxes | Competitive yields, moderate taxes, no inheritance tax for direct heirs. | Varies by region; Madrid and Barcelona have strong yields but stricter rental laws. Inheritance tax varies. |
| Local Investment | €500K+ in regulated investment funds, venture capital, and business creation. Focus on startups and renewable energy. | Broader stock market (IBEX 35), mutual funds, ETFs, and government bonds. |
| European Compliant Bonds | Tax-deferred, reducing tax rates (28% → 22.4% after 5 years, 11.2% after 8). Multi-currency (GBP, EUR, USD). Exempt from Portuguese stamp duty and probate. | Taxes only gains on withdrawal (19%-23%). No Modelo 720 reporting. Can be structured to avoid Spanish succession tax. |
Cost of Living: Lisbon vs Barcelona, and Urban vs Rural
Generally, Lisbon (Portugal) has a lower overall cost-of-living than Barcelona (Spain).
| Category | Lisbon (Portugal) | Barcelona (Spain) |
| Overall Cost of Living | 10–15% lower than Barcelona | Higher due to expat demand (international schools, dining, etc.) |
| Housing Costs (City Center) | €1,100–1,200/month | €1,100+/month, slightly higher than Lisbon |
| Housing Costs (Outside City Center) | €800 in mid-sized cities/suburbs | €750 in smaller cities/suburbs |
| Property Prices (City Center per m²) | €4,000+/m², varies by location | Similar to Lisbon, slightly higher in premium areas |
| Utilities (Apartment, Monthly) | €100–150 | €100–150 |
| Groceries & Fresh Produce | 10–15% cheaper than Spain | More expensive than Portugal |
| Dining Out (Local Meal) | €10–15 | €15–20 |
| Fuel Costs (Gasoline per Liter) | €1.76 | 1.55 |
| Rural Living Costs | 30% lower than Lisbon | 30% lower than Barcelona |
Source: Multiple
Get Professional Advice
Choosing Spain and Portugal as an expat can be difficult. That’s why we recommend you seek expat financial advice for Portugal vs Spain.
If you need help, contact me, I’ve helped many expats find their new residency based on their needs and I’m ready to help you too.
