A comfortable retirement works out cheaper in Portugal — around £2,400/month for a couple, versus £2,700 in Italy (about 11% more).
Cost of living, side by side
| Italy | Portugal | |
|---|---|---|
| Modest (couple/mo) | £1,900 | £1,700 |
| Comfortable (couple/mo) | £2,700 | £2,400 |
| Premium (couple/mo) | £4,300 | £3,800 |
Indicative monthly estimates for a couple — real costs vary by location, lifestyle and exchange rates.
Italy: Foreigners can buy property freely in Italy.
Portugal: Foreigners can buy property freely in Portugal, with full freehold ownership.
Italy: The elective residence visa suits retirees with stable passive income.
Portugal: The D7 visa is popular with retirees who have stable passive income (pension, rentals, investments).
Italy: Italy's public health service (SSN) is well regarded and low-cost; retirees on an elective-residence visa register voluntarily for a means-tested annual fee starting around EUR 2,000 (capped near EUR 2,800 for higher incomes), or use comparatively affordable private cover. Facilities are generally strongest in the north and larger cities.
Portugal: Portugal's public SNS gives legal residents low-cost universal care, and many expats add private insurance (roughly £40-100 a month depending on age) for faster appointments and English-speaking doctors; the Algarve and main cities have good private hospitals.
Italy: As a resident you are taxed on worldwide income including foreign pensions at progressive rates, but retirees moving to a small town (population under 30,000) in the eight southern regions can elect a flat 7% tax on all foreign income for up to ten years. UK government-service pensions are usually taxed only in the UK under the double-tax treaty, so take advice.
Portugal: The old NHR tax break has closed to new arrivals and its replacement (IFICI) does not cover pensions, so a retiree becoming resident now is generally taxed on pension and foreign income at standard progressive IRS rates up to 48%, subject to the UK-Portugal treaty; take advice before moving.
Italy: Warm Mediterranean summers and mild winters in the south and along the coasts, with colder, wetter winters and hot summers inland and up north. Spring and autumn (April-June and September-October) are the most pleasant times. Italy is safe with a relaxed pace, though petty theft occurs in tourist cities; they drive on the right, and while English is common in cities and tourist areas, some Italian makes daily life far easier in smaller towns.
Portugal: Mild Mediterranean and Atlantic climate with hot dry summers and mild wet winters, the Algarve being the sunniest; spring and autumn are the most pleasant months. Portugal is one of Europe's safest and most welcoming countries; English is widely spoken in expat and tourist areas, driving is on the right, and life is easy for British retirees.
Italy: Registration tax is 9% for a second home or 2% for a main residence, charged on the property's cadastral value which is usually well below the market price (new-builds carry VAT of 10% instead), plus notary fees and agent commission of around 3% plus VAT. Completion typically takes two to three months.
Portugal: Budget around 7-10% in one-off costs, IMT transfer tax (progressive, up to roughly 7.5%), 0.8% stamp duty, plus notary, registration and legal fees; buying typically takes one to three months.
Italy: Puglia and Abruzzo for affordable, sunny southern living and the 7% flat-tax towns; Tuscany and Umbria for classic rolling countryside; the northern lakes such as Como for scenery; and Liguria for a milder coastal base.
Portugal: The Algarve (Lagos, Tavira, Albufeira) for sunshine and a large British community, Lisbon and its coast (Cascais) for city life, the Silver Coast around Óbidos for quieter value, and Porto and the north for greener, cheaper living.
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