It's Income Tax Time in Portugal

Happy Sunday, guys!

Before moving to a new country, you brace yourself for challenges: bureaucracy, language barriers, culture shocks, etc. But there are always surprises that catch you off guard. For my family and me, it’s been the big systems: navigating emergency healthcare, surprising taxes, even more surprising social security contributions, or moving our daughter between schools due to bullying. Each one has felt like it required ninja-level skills in a game we were still learning the rules for.

But what’s recently surprised me since starting a full-time job a few months ago, is that I’ve found myself slipping back into old routines. Rushing through lunch, skipping the slow parts of the day, and letting life become operational again.

Sound familiar? Have you felt your old habits and routines sneak back into your life after living abroad for a while? I’d love to hear your thoughts, and hopefully I’m not the only one slipping back into familiarity!

This week, I’m reminding myself of why we moved. We crossed oceans to build a different kind of life. So here’s to long lunches, (decaf) coffee after dinner, fireworks on a Tuesday, and, yes, figuring out how to do our taxes in a language we’re still learning.

Speaking of taxes, this week we’re diving into the start of tax season in Portugal, with some much-needed insights from the pros at FRESH Portugal, plus a look back at the tax-related topics we’ve covered so far.

What you can expect to dive into today:

🤑 Cost of Living Survey Results – finally out!

📃 Tips on filing your IRS tax return in Portugal

🗨️ Language lesson: how to say big numbers in Portuguese (to practise for tax filing season)

Coming up next weekend:

Healthcare in Portugal – a look at private vs public, and what you really need to know

Let’s dive in, shall we?

📷 Pic of the week

Monserrate Palace in Sintra is a gorgeous gem, blending Moorish, Gothic, and Indian architectural styles, and surrounded by lush, exotic gardens. Once the summer retreat of British aristocrats, it’s now a breathtaking escape where history and nature intertwine.

📰 What’s Happening in Portugal this April

In the last two newsletter editions we’ve covered some of the major sports and cultural events happening in April. Make sure to go back and check it out here and here.

Music & Performance Events

🎪 Cirque du Soleil Corteo—April 10 - 20, 2025, MEO Arena, Lisbon: This is a captivating production that will be performed at the MEO Arena in Lisbon. This enchanting show, directed by Daniele Finzi Pasca, has already mesmerized over 10 million spectators worldwide since its premiere in Montreal in 2005.

🎸 Lenny Kravitz: Scheduled for April 8, 2025, at MEO Arena, Lisbon. Lenny will perform at the MEO Arena in Lisbon, Portugal, on April 8, 2025, as part of his "Blue Electric Light Tour 2025

Sports Events

🚴 Algarve Bike Challenge, April 11-13, 2025 (Tavira): This is a major outdoor event in Tavira, Portugal. It is one of the most renowned mountain biking (MTB) stage races in Portugal, attracting both elite riders and amateur cycling enthusiasts

🏊️ Setúbal Open Water Race (April 12, Praia do Creiro, Setúbal): This event offers three distances—750m, 1.9km, and 3.8km—in the Atlantic Ocean. Participants can compete individually, as part of a team, or through a relay format

🏃 Tróia Swimrun (April 13, Tróia Peninsula): A challenging swimrun event combining swimming and running across scenic landscapes. Distances include Sprint (18.3 km) and Standard (26.5 km), with multiple transitions between swimming and running segments

Food & Wine

🍷 Grande Mostra de Vinhos de Portugal (April 11–13, Albufeira): This major Portuguese wine show will feature wine tastings, an expanded gastronomy area, and the 10th Portuguese Wine Competition. Entry is free, but a tasting glass costs €5

🥓 Wine Alvarinho and Smokehouse Festival (April 25–27, Melgaço): A celebration of Alvarinho wines and regional smoked delicacies. The event includes tastings, gastronomic days, and traditional dishes.

🛍️ Sagal Expo Lisbon (April 28–30, Lisbon): A trade fair promoting Portuguese food and beverage products to international markets. It’s a great opportunity to explore Portugal's culinary exports.

Cultural Events

🎫 Festival do Contrabando (April 4–6, Alcoutim): This biennial "Smugglers Festival" celebrates the historical trade between Portugal and Spain with live entertainment, food, and cultural activities along the Guadiana River.

🐑 Ovibeja Agricultural Fair (April 29–May 4, Beja): A major event focusing on agriculture with livestock exhibitions, themed pavilions, and live concerts

🏡 Lifestyle: Eat, Pray, Love—and everything in between

The Cost of Living Survey Results!

A few weeks ago, we ran our Cost of Living Survey, and I’m thrilled to finally share the fascinating insights you so eagerly contributed. While this wasn’t a scientific study, the aim was simple: to spark curiosity and offer a fun, honest snapshot of how our day-to-day expenses stack up—whether against our expectations, our home countries, or the early days of arriving here.

This is by no means a definitive breakdown (our participant pool was small, after all), but the responses were rich with perspective, and too interesting not to share. So, without further ado, let’s dive in!

📜 Cost Of Living: The Snapshot

Based on survey responses, here’s what everyday life in Portugal looks like for many of you:

• Average rent for a 2-bed: €1,041.67

• Monthly groceries for one: €334

• Monthly utilities: €175

• Dining out average per month: €125

• Healthcare (per person): €225

🤔 What Surprised Me Most

A few patterns stood out from your answers, and they say a lot about how we actually live day-to-day:

• Most of you live in smaller towns, not in Lisbon or Porto. In fact, the majority are in towns with fewer than 20,000 people.

• Convenience often beats cost. Many people shop where it’s easiest, even if it’s not the cheapest.

• Taxes feel heavy. A recurring theme was how burdensome Portugal’s tax system can be, especially compared to expectations.

Rather than just summarising the rest of the data, I thought I’d let your voices take the lead. Below, you’ll find direct quotes from the survey. Things you had to say about the cost of living, taxes, and the advice you’d give to future expats.

Here’s the breakdown, in your own words:

💸 Cost Shockers & Reality Checks

"EVERYTHING! Taxes, housing, food, gas, utilities...more expensive than expected." – Anonymous, 2 months in Nazare

"Talk to your money guy. Find a good tax attorney in PT to help mitigate the damage. Taxes here are merciless." – Anonymous. (Reality check: Portugal’s tax regime isn’t always paradise).

"If you don’t have NHR I think it would be tough to justify the expense and tax burden against the rising costs. And for housing, I’ll use the word absurd—the price for the quality is an absolute joke." – Anonymous, 3 years in Portugal

🍷 The Unexpected Wins

"Expensive prescriptions are free."

"My family in the US can’t believe my grocery prices!"

"Health care is MUCH cheaper! I don’t have to pay $1200 a month for insurance, nor $5,000 a year for deductibles and copays."

"Even if our cost of living was the exact same as it was in the US... our quality of life is at least double."

🧊 Lifestyle Adjustments & Surprises

"I'm cold inside my apartment almost 100% of the time." 

"Clothing. It’s more expensive in the little shops here… but €10 jeans at the market!"

“I use YNAB, a budget program… As prices rise, I need to remove money from other categories to cover things."

“Many things are far less expensive, such as vet care, beauty, spa treatments.”

“Healthcare is MUCH cheaper!”

“It's not the bargain it may have been.”

“Rent before you buy.”

🧾 Taxes & Bureaucracy

Strong warnings from our readers:

“It is the worst in the EU... 48% on amounts over €81K in worldwide income.”

“Taxes here are merciless.”

“Engage 3 different tax lawyers to run sample tax returns.”

“US citizens need an expat tax person.”

So… Is Porugal an Affordable Paradise?

If there is one thing this survey made clear, it is that Portugal is neither a paradise nor a trap. It is a real place with real trade-offs. For many, the slow pace, affordable healthcare, and safety are worth every bureaucratic headache and budget stretch. But it’s also clear that some arrive with rose-tinted glasses, surprised by the high taxes, cold winters, and unexpected costs.

The verdict? Portugal can absolutely be your dream life… if you do your research, manage your expectations, and stay flexible. The cheap wine helps, too.

💰 The Hustle Fund — Money, Taxes, and all things Financial

Tax Return Submission Starts April 1st, 2025

Starting last week, on April 1st, you can now submit your annual tax return in Portugal. If you’re living here, it’s officially tax season.

I reached out to our friends at FRESH Portugal for a few insights into the process, and they were kind enough to share some practical advice to help us get it done right:

Q: Is it advisable for expats to do their own tax returns, or is it better to use a trusted accountant?

A: “Expats should avoid filing their own Portuguese tax returns without professional guidance. The tax system is complex and not user-friendly, especially when foreign income, assets, or cross-border considerations are involved. Even seemingly minor mistakes can lead to audits, penalties, or missed opportunities for tax optimization.

While local accountants are well-equipped for domestic filings, expats are best served by working with a tax lawyer—particularly one with expertise in international tax. Tax lawyers provide legal and strategic insight into special regimes like NHR or TISRI, treaty interpretation, and cross-border planning—areas that typically fall outside the scope of standard accounting. For expats, it’s not just about filing correctly; it’s about structuring their affairs in a way that’s both compliant and advantageous.”

Q: Are there any common mistakes that expats should watch out for when filing?

A: “Yes. Some of the most frequent issues include:

• Overlooking the need for proper structuring before establishing tax residency, which can make a major difference in long-term tax exposure.

• Miscalculating tax residency, especially when splitting time between countries or relocating mid-year.

• Misapplying tax treaties or assuming eligibility for special regimes like NHR or TISRI without proper legal assessment or timely application, which can lead to double taxation or failure to claim exemptions.

• Incorrect classification of income or their source, particularly in cases involving employment or self-employment, investment income (including within Trusts), and foreign company distributions.”

Ready to Tackle Tax Season?

If you’d like to speak to the tax experts at FRESH Portugal, book a consultation here to enquire about their tax return services and how they can help you navigate the process with confidence.

Prefer the DIY route? No problem—our step-by-step, DIY tax return guide is dropping in next weekend’s issue, so keep an eye on your inbox!

The Tax Roundup

Over the last few months, we’ve covered some very important topics on tax-related matters for expats in Portugal. Here is a roundup of articles you may have missed:

💶 What You Need to Know About the New NHR 2.0 Tax Regime

📃 How to Set Up a Living Will in Portugal

💰️ The Must-Know Tax Essentials for Foreign Residents in Portugal

🛂 Your Visa Options for Living the Digital Nomad Lifestyle in Portugal

Have a Burning Tax Question?

Do you have a tax or immigration question that you just can’t seem to get answered anywhere else? Submit it here as feedback on this week’s issue, and we’ll ask our experts to weigh in for a future edition of the newsletter.

🗣 Lost in Lingo

Need to Brush Up on Big Numbers in Portuguese?

Depending on your income (and how kind or cruel your tax return is this year), you might find yourself needing to say some pretty big numbers in your next meeting with an accountant.

To help you out, here’s a quick and handy video that teaches you how to say numbers from 101 to 100,000 in Portuguese, because it helps to know exactly how much you’re getting back… or how much you owe! Boa sorte! 💸

…And That’s All Folks

Thanks for reading! 💌

Hustle on!

Angelique🧞‍♀️

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