Updated: August 11, 2023
The Algarve is located on the southern coast of Portugal, known best for its peaceful and pristine beaches, abundance of sunshine, and rich history. Many expats from the US, when they move to Portugal, choose the Algarve as their second home for its rich cuisine, deep heritage, affordable cost of living, and lifestyle. The idea of living in the Algarve is particularly famous among expats who want to ditch the daily grind and adopt a slow-paced lifestyle. The Algarve is fondly referred to as the ‘Florida of Europe’, and is one of the most visited places in all of Europe during the summertime. In this article, We'll delve into the beauty of the Algarve and provide you with key insights about the region. In this detailed guide, you will learn about:- The location of the Algarve
- Why living in the Algarve is a great idea?
- Buying and renting options for foreigners in the Algarve
- Best places to live in the Algarve
- Living in the Algarve as a foreigner: residence permits and entry visas
- Cost of living in the Algarve
- Transportation in the Algarve
- Weather in the Algarve
The Location of the Algarve
The Algarve is 280 km from Lisbon, the capital city of Portugal. Depending on the type of transport, it takes about three (by road) to four (by train) hours to reach the Algarve from Lisbon. and is about a three to four hours ride depending upon the mode of transport you choose. It is on the southern coast of Portugal, bordered by the Alentejo on the north, the Guadiana river on the east, and the Atlantic Ocean on the west and south.
Why living in the Algarve is a great idea?
The Algarve is widely known as a holiday destination for its amazing beaches and perfect climate. The peaceful lifestyle and quality of life tempt foreigners to stay and live in the Algarve after retirement. In this section, we provide you with more reasons to fall in love with the mysterious yet beautiful Algarve.
Quality healthcare with minimum costs
The residents of the Algarve have access to the Servicio Nacional de Saude (SNS), the national healthcare system of Portugal. The Algarve has a quality healthcare system because of the large number of retirees that choose to settle in the region. You can have access to general healthcare at a low cost, although there are additional charges for specific procedures, such as X-Rays, scans, etc.
You must acquire a health insurance plan if the state does not cover you. The Algarve also has well-equipped private healthcare systems in addition to high-standard public health services. In recent years, there has been a remarkable increase in the number of medical tourists in the Algarve, it is an ideal place if you are seeking procedures such as aesthetics, dental care, hip replacement, etc.
Affordable cost of living
The Algarve is the right place if you are looking for an affordable place to move to. The cost of living in the Algarve is around 30 percent lower compared to other countries in western Europe. You will need roughly €1,250 a month for a modest lifestyle and €1,800 a month to enjoy a more luxurious lifestyle.
Real estate options
When it comes to real estate, there are a lot of options for you to choose from, ranging from luxurious villas to affordable properties. You’ll also find land for sale in the Algarve, perfect for building your dream home from scratch. If you are buying properties through the Portugal Golden Visa program, then there is an added advantage of becoming eligible for a residence permit. However, do note that there are location restrictions on residential real estate, and only some specific areas of the Algarve now qualify.
It is recommended to hire an estate agent or work with a buyer’s agent to narrow down the properties that fit your requirements. For commercial real estate, there are no location restrictions under the Portugal Golden Visa.
Shopping in the Algarve
There are many shopping malls in the Algarve that you can visit. One such is MAR, the biggest in the Algarve with 86 shops, 25 restaurants, IKEA, and an area of 8,000 sq mts to sit and relax. In addition to the high end shopping malls, there are also many local markets where you can witness the local life of the Algarve and get your hands on fresh and seasonal produce.
Weather in the Algarve
The weather in the Algarve is one of the important reasons people settle here when they move to Portugal. The region boasts more than 300 days of sunshine per year. The Atlantic and Mediterranean influence the weather in the Algarve and keep it stable throughout the year.
Easy access to Europe
Major European cities are easily accessible from the Faro region in Algarve, attracting central and northern Europeans to escape from colder climates. There are many national carriers and low-cost airlines that can take you across Europe. The Algarve also has an impressive roadway connecting the key urban regions.
Quality of life
The Algarve is one of the safest regions in Portugal, with friendly and hospitable locals. You can get by with English, but if you want to experience the authenticity of the Algarve, it is advisable to learn a little Portuguese. The Algarve offers a high-quality life through its unique cuisine, picturesque landscapes, and low-crime rates.
Tax flexibility
There is a ten-year tax exemption for expats that move to Portugal, whereby they can receive significant tax advantages for up to ten years. You can read more about this in our article: NHR Portugal Program.
Buying and Renting Options for Foreigners in the Algarve
Whenever you move to a new place, the first thought that comes to your mind is, “Where will I stay?” In Portugal, you’ll be pleased to know that there are no restrictions on foreigners buying or renting property. You will, however, need to ensure that you can legally reside in the country This section provides details regarding buying and renting a place in the Algarve and the required documents.
Buying a house in the Algarve
The Algarve attracts many foreigners looking to retire and settle because of the high quality of life they can enjoy at affordable costs. If you are interested in settling in the Algarve and looking to buy a house, the procedure is straightforward. Real estate in the Algarve is ever-growing and popular for those seeking luxury properties to invest in or a primary residence.
Property buying costs in the Algarve
The property prices in Algarve vary based on the city you choose to live in, but a good tip is that houses outside the city center are much more affordable. If you are looking for fancy housing, the central Algarve is the ideal place. It has properties with private pools and all kinds of luxuries. If you are looking for authentic and affordable properties, you can find many options in the eastern Algarve.
There are many options, such as beach houses, modern apartments, villas, etc. It saves time if you first decide on the type of property and the region before sending in the search party.
The table below will give you an idea of the property prices in the major parts of the Algarve.
| City | Average prices per m2 in 2020 |
|---|---|
| Loulé | €2,308 |
| Lagos | €2,604 |
| Albufeira | €2,357 |
| Faro | €2,042 |
Required documents to buy property in the Algarve
There are certain documents you need to submit while buying a property in Algarve. They are:
- Proof of identification (Portuguese ID card or a passport)
- Portuguese tax number (NIF)
You can get a NIF number from the government finance office by providing your passport and current address as proof. It is also advisable to get a Portuguese bank account to avoid transaction costs.
Steps involved in the buying process
Below are the steps involved in buying a property in the Algarve:
- Hiring a lawyer
- Signing the promissory contract
- Signing the final deed
Hiring a lawyer
After you find the property you want to purchase, you need to hire a lawyer to help you with the legal procedures. The lawyer will do the due diligence and draw up a promissory contract for you. They will also verify if you have all the required documents for the purchase.
Signing the promissory contract
After verifying all the documents, they will draw up the promissory contract, the first binding contract. The promissory contract consists of all the important information, such as the final price, all the terms and conditions, and the final deed date. Your seller will then sign the contract, and you will be required to pay the deposit amount at this stage. Keep in mind that the deposit amount is non-refundable.
Signing the final deed
The Escritura (final deed) is signed, and the final amount is paid between 30 and 60 days after signing the promissory contract. At this stage, the vendor, the buyer, the notary, the lawyers of both parties, and the bank representatives (in case you are taking a mortgage) must be present.
Additional property buying cost
In addition to the amount you pay for the property, you need to bear the below-listed prices during the purchase.
- Notary fees: The notary fees depend on the type of contract. The notary signs the final deed that confirms the purchase of the property.
- Legal fees: You are required to pay legal fees to the lawyer for verifying the documents and making sure everything is correct.
- Property transfer tax (IMT): While transferring the property in your name, you need to pay the property transfer tax. The percentage depends on whether your property is a rental, holiday, primary, or permanent residency.
Steps involved in renting a house in Algarve
There are certain procedures you need to follow when renting a property in the Algarve. Here are the steps that you need to follow to rent a house:
- Get a NIF number
- Submit ID proof (Portuguese ID card or passport)
- Pay the deposit, which includes a month’s rent. You might also need to pay the security deposit based on the requirements listed by your landlord.
- Sign the rental contract that includes details, such as full names of the landlord and tenant, nationality, date of birth, lease duration, review date, and notice period (landlord must provide if they are not renewing the lease).
- If needed, you also need to have a guarantor, especially when you are renting the property for a short-term period.
If you are interested to learn more about Algarve real estate, consult our ultimate guide: Algarve Real Estate Portugal.
The Best Places to Live in the Algarve
The Algarve has many authentic and beautiful places to choose from. If you have decided to live in this wonderful part of Portugal, here are some of the great options for you to go with.
Albufeira
Albufeira is the most popular southern region in the Algarve, with the perfect mix of historic architecture and modern elegance. The weather, amazing beaches, and welcoming locals make it the perfect place to enjoy all year long. Also, if you are interested in history, Albufeira has a lot to offer through its architecture.
Lagos
Lagos is in the western Algarve and has the longest beach in the Algarve with stunning turquoise blue water. The region provides a combination of traditional and contemporary architecture. The town has something to offer for all kinds of people, from fun water parks to inspiring museums and thrilling hiking spots.
Faro
Faro is the capital city of the Algarve, and rightly so, because of its stone-paved paths and historic walls that reflect the rich history and culture of the Algarve. You can find many fancy restaurants, international companies, and high-standard fashion stores in Faro. If you are looking to live in a place that is the right blend of busy streets and peaceful regions, Faro is the best option.
Monchique
Monchique is an ideal place for nature lovers, as it is surrounded by mountains and far away from crowds. The town is famous for its healing thermal water from geothermal springs and health resorts. It is the spa capital of the Algarve. The region is also famous for its handicrafts, such as lace works, wooden chairs, and wickerwork.
Quinta do Lago
Quinta do Lago is a place you must live in if you are into luxury. You will fall in love with nature and the ocean that surrounds you, making it your new favorite destination. The town also has many golf courses, top-class sports facilities, outstanding restaurants, and luxury housing options.
Tavira
Tavira is a calm town with fewer crowds located along the banks of the River Gilão. It overflows with traditional Portuguese houses, churches, and cobblestone streets. Down south, you can find the natural park of Ria Formosa, protected waterways, and bird sanctuaries.
Silves
Silves is located along the banks of the Arade river and is a very unique town in the Algarve. The town is filled with orange-colored rooftops with well-preserved castles. The place has something to offer irrespective of the time of the year.
Living in the Algarve as a Foreigner: Residence Permits and Entry Visas
Living in the Algarve as an EU citizen
If you are a European Union citizen, and if you are going to stay in the Algarve for more than three months, you need to apply for a registration certificate. You can apply for the registration certificate at the local council 30 days after your three months entry into the country. The cost of this certificate is €15 for adults and €7.50 for children.
The registration certificate is valid for five years. If any of the family members do not have European nationality, they are required to apply for a residence card to live in the Algarve for more than three months.
Living in the Algarve as a non-EU citizen
If you are a citizen of a non-EU country and are thinking of living in the Algarve, you are required to apply for a Portuguese residency visa before your arrival. Once your visa expires, you need to apply for a residence permit.
Living in the Algarve as a US citizen
If you are a US citizen and planning to live in the Algarve for more than three months, you need to apply for a residence permit. The process is straightforward and easy.
Living in the Algarve with a Portugal Golden Visa
The Portugal Golden Visa is the investor visa offered to non-EU citizens interested in investing in the country through real estate, capital transfer, company setup, art donation, or fund investment. This is the famous route taken by expats to get fast access to residency in Portugal.
Refer to our article on the Portugal Golden Visa to learn more about the program.
Cost of Living in Algarve
Rental prices in the Algarve
The rental prices in the Algarve vary based on the type of property you choose. However, the region is very affordable when compared to other European countries. You can get a one-bedroom apartment for a price of €900. Depending on the type of apartment and the location, the price may vary between €900 and €1,600.
If you are living on a budget, stay away from the city centers in the big cities. If you are searching for long-term rental properties, we recommend beginning your search early due to the ever-increasing demand.
| Apartment type | Cost |
|---|---|
| One-bedroom apartment in the city center | €900 |
| One bedroom apartment outside the city center | €601.90 |
| Three-bedroom apartment in the city center | €1,533.33 |
| Three bedroom apartment outside the city center | €966.67 |
Source: Numbeo
The cost of food
The Algarve has lively local markets where you can get fresh local produce at affordable rates. In the table below, we have provided you with the cost of basic food requirements, referred from Numbeo
| Item | Cost |
|---|---|
| 1-liter regular milk | €0.77 |
| Loaf of fresh white bread (500 gm) | €1.31 |
| One dozen eggs | €1.65 |
| Local cheese (1 kg) | €10.00 |
| Chicken fillet(1 kg) | €5.93 |
| Beef round (1 kg) | €11.17 |
| Apples (1 kg) | €2.24 |
| Oranges (1 kg) | €0.93 |
| Bananas (1 kg) | €1.18 |
| Tomato (1 kg) | €1.70 |
| Potato (1 kg) | €0.83 |
| Onion (1 kg) | €1.00 |
| Lettuce (one head) | €0.97 |
| Bottle of wine | €3.99 |
| Domestic beer (0.5 liter) | € 1.30 |
| Imported beer (0.33 liter) | € 1.00 |
| Water (1.5 liters) | € 0.88 |
Restaurant costs
The prices at restaurants vary depending on the type of restaurant. There are many fancy fine-dining restaurants in the Algarve that will make you want to visit again and again. In the table below, we have provided you with the approximate restaurant costs in Algarve, referred from Numbeo.
| Meal in an inexpensive restaurant | €12.00 |
| A three-course meal in a mid-range restaurant for two people | €38.00 |
| McMeal at McDonald's (or equivalent meal combo) | €6.50 |
| Capuccino (regular) | €1.82 |
| Coke/Pepsi (0.33 liter) | €1.71 |
Utility costs in the Algarve
The basic utility costs in the Algarve, including, electricity, heating, cooling, water, and garbage come to around €101.36 per month. In the below table, you can find the basic utility costs, mobile tariff, and internet costs for the region.
| Basic (electricity, heating, cooling, water, garbage) for 85m2 Apartment | €101.36 |
| 1 min. of prepaid mobile tariff local (no discounts or plans) | €0.15 |
| Internet (60 Mbps or more, unlimited data, cable/ADSL) | €32.00 |
Transportation in the Algarve
You can find numerous trains and buses to travel between the regions in the Algarve. You can also rent a car at affordable prices if you are prioritizing comfort. The car rental price starts from €3 to €25. Buses are the most widely used for commuting, and a day pass costs between €3 and €7.
If you are traveling long distances, the train is the better option. The prices are affordable, and if you book in advance, you will also get a good discount. A train ticket from Faro to Lisbon comes to around €12.
Weather in the Algarve
The Algarve has very good weather, warm for most of the year with a short period of rainfall. The combination of scenic beauty and sunny climate makes it the perfect place to live.
Weather in the Algarve – Winter
December, January, and February are the coldest months in the Algarve. The average temperature during the daytime in these months remains between 9 degrees C and 16 degrees C. The temperature at night falls below 6 degrees C.
Weather in the Algarve – Summer
June to September is considered to be the hottest months in the Algarve. The Algarve receives little to no rain in summer. The temperature during this period is above 30 degrees C. The months of July and August are hotter, at 40 degrees C.
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Frequently Asked Questions about Living in Algarve
Is the Algarve a good place to live?
The Algarve has a rich cuisine, deep heritage, affordable cost of living, and lifestyle, which makes it a good place to live.
Is it expensive to live in the Algarve?
The Algarve is comparatively affordable, although the cost of living will depend on your lifestyle. A furnished two-bedroom apartment in the Algarve costs around $980, and monthly groceries for two people are around $400.
Which is the nicest place to live in the Algarve?
The towns at the top of the list are Albufeira, Lagos, Faro, Monchique, Quinta do Lago, Tavira, and Silves.
