A comfortable retirement works out cheaper in Mexico — around £2,100/month for a couple, versus £2,400 in Portugal (about 12% more).
Cost of living, side by side
| Mexico | Portugal | |
|---|---|---|
| Modest (couple/mo) | £1,400 | £1,700 |
| Comfortable (couple/mo) | £2,100 | £2,400 |
| Premium (couple/mo) | £3,600 | £3,800 |
Indicative monthly estimates for a couple — real costs vary by location, lifestyle and exchange rates.
Mexico: Foreigners can own property, via a bank trust (fideicomiso) in the restricted coastal and border zones.
Portugal: Foreigners can buy property freely in Portugal, with full freehold ownership.
Mexico: Temporary and permanent resident visas suit retirees who meet income or savings thresholds.
Portugal: The D7 visa is popular with retirees who have stable passive income (pension, rentals, investments).
Mexico: Private hospitals in the big cities and expat hubs are good and far cheaper than in the US or UK, with English-speaking doctors common in expat areas. Legal residents can enrol voluntarily in the public IMSS scheme for roughly US$500-700 a year, though it excludes some pre-existing conditions, so many pair it with private insurance.
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.
Mexico: Temporary residents are generally not taxed on foreign pensions for their first years, and even permanent residents who become tax-resident benefit from double-tax treaties and foreign-tax credits that usually keep the bill low. Whether you are tax-resident turns on your centre of vital interests, 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.
Mexico: Hugely varied by altitude: the central highlands around Lake Chapala and San Miguel enjoy a spring-like climate year-round, while the coasts are hot and humid with a May-October rainy season. The dry winter months are the most comfortable. Safety varies sharply by region, so the settled expat towns are calm while some areas are best avoided; they drive on the right, and English is widely spoken in expat hubs though Spanish helps everywhere else.
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.
Mexico: On the coast or near a border, foreign buyers hold property through a bank trust (fideicomiso), which adds a setup fee and annual charge. Expect total closing costs of about 5-8% inland and 7-12% where a trust is needed, including acquisition tax (ISAI) of 2-4% plus notary and registration; completion often takes one to two 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.
Mexico: Lake Chapala and Ajijic for a large, established lakeside expat community; San Miguel de Allende for colonial charm; Merida for a safe, cultured city in the Yucatan; and Puerto Vallarta for beach living.
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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