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Am I in cloud cuckoo??

Am I in cloud cuckoo??

Old Jan 20th 2022, 7:44 pm
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Default Am I in cloud cuckoo??

Hi All

I have been following your forum with interest as it has been my long held dream to spend 6 months per year in Portugal when I retire. We are looking at a 10 year plan whereby we will initially probably rent for 3 months a year whilst still working in the uk with a view to finding our perfect place in portugal eventually and splitting our time between uk and portugal.

Anyway recently I have been looking into our pensions and have realised we might not be in a position to live in the uk and portugal whilst keeping our main residence as the uk. I estimate our annual joint pension income as a couple will be no more than around £25K. I have read in the uk that is around how much you need for what is classified as a moderate comfortable retirement, but obviously we would have double living costs such as local taxes, broadband utilities etc. Am I being unrealistic thinking we can keep 2 homes running for around £25k? I recently read a comment from someone saying it costs around £40k per year to 'keep the lights on' in 2 homes!!!

Both homes in the uk and portugal would be mortgage free. Our other option would be to buy another house in the uk as a passive income and then use the money to rent an air bnb for a few months each year. At the moment that sounds like fun but I am sure as I get older I would be craving the routine of a place of our own. Also I would like to do 6 months over the year rather than just 3 months.

Anyway sorry about the long winded message, but if anyone runs 2 homes on a similar income or has any advice for my situation please fire away!

I work outdoors and the only thing that gets me through the winter is the hope of winter sun in the future

Also just to add the sensible thing to do would be probably move permanently to portugal freeing up the uk home to rent out but I don't think I could cut ties with the uk because of my children and also my husband would moan endlessly about the heat in august
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Old Jan 21st 2022, 9:07 am
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Default Re: Am I in cloud cuckoo??

Well, one would really need to know what your capital / savings situation is to be able to offer practical advice ~eg what is your present house worth ? Where is it ? and what other savings do you have to put towards purchase in Portugal and / or UK ?

I know what you mean though about wanting to have a 'home' in both places in retirement. Renting via airbnb would not be as relaxing as having the keys to one's own place.

I also know what you mean about wanting to avoid the July / August heat.

Have you thought about doing it the other way around ? I.e., purchase your MAIN house in Portugal ( another thing you do not mention is the location/s within Portugal that you are looking at : the obvious ones in the Algarve / other coastal areas are now so very expensive compared with interior / northern locations ) but having a secondary house in UK ?

If finances permit you could maybe ( besides having main house in Portugal ) own somewhere modest in a university city in England, which you would rent out during the academic year, but then have available for you to live in during the summer months of mid June to mid / September.
Your place in Portugal could either be rented out during the summer months or maybe offered to friends / rels for hols..

But this is all speculation until one knows quite what your financial nitty gritty is in terms of cash available for purchase, and also desired locations within Portugal.



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Old Jan 21st 2022, 11:35 am
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Default Re: Am I in cloud cuckoo??

May I politely suggest you take a different approach - assuming you have not reached the point of putting offers on a house in Portugal. As the covids restrictions seem to be relaxing spend some time in various parts of Portugal, if flights availability and prices go back to pre-covids then long weekends in various places are possible as well as longer periods. You can build up your knowledge of house/flat prices/ and various living costs, amenities, facilities, hospitals etc as, really, as only you will know if you can find what you are looking for. Local estate agents have an idea what is available and what price (they think) things can be bought or rented for whereas the main online sites seem to be inconsistent on pricing. For 10 years we had a place in the UK and a place in Portugal which, in total, cost less then £20k a year to run but it did take 18+months to find a suitable place in a suitable area as what looks good on the interwebs is not the same as reality. Renting places out either in the UK or Portugal just adds another layer of difficulty so unless you have some local family/friends to keep an experience eye on the place and the rentees it will always be a worry. I have done that and will never do so again, trying to book flights for a 2 month stay and not knowing if you'll be able to get into your own place (they'd changed the locks) etc is just too stressful.
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Old Jan 21st 2022, 12:37 pm
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Default Re: Am I in cloud cuckoo??

Also - check out the rules for UK citizens spending time in the EU ... restricted to 90 days within a 180 day period, so your idea of up to 6 months in PT (thus avoiding tax residency) would not work but you could separate your 5+ months into segments. You talk about continuing to work and then to retire surviving on your pensions in several years time so Coleio and Riv's advice seems appropriate. In a few years time the children will also be older?, relatives will be delighted to visit PT from time to time (after Covid) and overall living costs (especially taxes, council taxes etc) tend to be cheaper in Portugal, depending on the comparison between parts of the UK and parts of PT!! So seriously visit, stay in AirBnB for say 3 weeks at a time in different areas when you can, try out winter breaks (you may find the winter sun not quite as warm as you are expecting??) and explore the country, chat to estate agents on their patch, and aim for your Main residence in PT (and don't forget you have to get your residencia application and Visa done while in the UK before you move to PT).

Of course, should you eventually decide to sell that house in the UK after renting it out for several years, then you might get slapped for Capital Gains Tax, depending on its circumstances as you will no longer be able to declare it as your principal residence - you need to check that out before you decide what to do!

If/when you do move, unless changes are made in the meantime, you should qualify for NHR status so be taxed 10% on your pension income (and indeed other incomes that come within its remit will have little or no tax) so your pension would be worth more to you than if taxed in the UK? Keeping a house fit for rental in the UK can be a good thing but perhaps do it through a management agency so family do not have to be bothered with any problems that crop up (non-resident - UK - rental income received in PT will also come under the NHR scheme for low taxes).

Good luck with your deliberations and let us know how you get on ...
PS - Welcome to the Forum!
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Old Jan 21st 2022, 12:42 pm
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Default Re: Am I in cloud cuckoo??

Welcome to the forum. I would echo the earlier comments especially owning 2 places adding to un-necessary stress and this is without the consideration of finances! Programmes like place in the sun are great property porn but tend to gloss over practicalities like how one might deal with a property that is empty for 6 - 9 months of a year or why you would want to pay x to buy a property that you would then be tied to and worry about, when it would likely be cheaper and more flexible to rent. If I was in your position I would maintain the uk property for one reason the apparently endless house price inflation that we have in the uk and also as a "permanent" uk base, and rent a place in Portugal for 2-3 months in the winter or whenever you like it. There is plenty of rental choice out there on sites such as idealista and even VRBO and similar or local estate agents. This is much less stress, no need to worry about whether you fit such and such criteria for a visa, and no big financial commitment to buy in Portugal. I would also suggest against the idea of selling in the uk and buying and living exclusively in Portugal for similar reasons.
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Old Jan 21st 2022, 12:46 pm
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Default Re: Am I in cloud cuckoo??

Lots of food for thought there thank you for taking the time to post. I hadn't thought about a university town that's a really good idea. I do think I would be nervous about the rental situation though so it's something to think about.

In terms of location I am looking primarily at the algarve but not too touristy! I know that is a bit of a contradiction!!. Basically good winter weather, not too remote but a working area which is not ghost town in winter.

We don't have any savings but will be selling our main home which will nearly be mortgage free by then. Its probably worth £650k - £700k now so the buying isn't the problem it's the annual expense I am worried about.

So the plan would be buy in uk and Portugal or if we can afford buy 2 modest properties in the UK as well as the property in portugal to give us a small extra passive income.

Ideally in portugal I wouldn't be reliant on a car so a village fairly close to a bigger town with a bus into town would be ideal.

We currently live in the Midlands but could move anywhere and get either an apartment or cottage in UK.

I have never owned an apartment and service costs worry me in pt and uk. Would it be cheaper ongoing cost wise to get a freehold villa in small village than an apartment complex? Or does it balance out with lower maintenance/cheaper heating costs?
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Old Jan 21st 2022, 12:51 pm
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Default Re: Am I in cloud cuckoo??

I am just at work now and skimmed through the responses but when I get home I will have a proper read through regarding having the main residence in portugal. Lots to think about there!

Anyway for those of you in portugal now I hope the sun is shining there it's a very cold grey day in the midlands today!
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Old Jan 21st 2022, 12:54 pm
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Default Re: Am I in cloud cuckoo??

Yes, it can be done for £25k or even a little less some years but that's excluding any large purchases such as new car, central heating boiler etc.which come out of savings. We have main home in UK where we pay taxes, an old apartment near Lisbon and a boat moored off Faro, not in a marina, where we spend most of our summer time with several months on board sailing. My wife is Portuguese and our social life is more with locals and sailing community than resident expats and we avoid things like eating in overpriced tourist haunts. If you want a villa or apartment by the sea with high running costs, eating out most of the time etc. then you obviously need a lot more income.

I had my permanent residence before Brexit even appeared on the scene, when it was just a formality. I don't know what the terms are now for third country citizens requesting residence but hear there are minimum income or savings requirements and you may have to be in the tax system, which we're not.



Last edited by GrahamF; Jan 21st 2022 at 1:27 pm.
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Old Jan 21st 2022, 1:31 pm
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Default Re: Am I in cloud cuckoo??

Originally Posted by seekingsun View Post
Lots of food for thought there thank you for taking the time to post. I hadn't thought about a university town that's a really good idea. I do think I would be nervous about the rental situation though so it's something to think about.

In terms of location I am looking primarily at the algarve but not too touristy! I know that is a bit of a contradiction!!. Basically good winter weather, not too remote but a working area which is not ghost town in winter.

We don't have any savings but will be selling our main home which will nearly be mortgage free by then. Its probably worth £650k - £700k now so the buying isn't the problem it's the annual expense I am worried about.

So the plan would be buy in uk and Portugal or if we can afford buy 2 modest properties in the UK as well as the property in portugal to give us a small extra passive income.

Ideally in portugal I wouldn't be reliant on a car so a village fairly close to a bigger town with a bus into town would be ideal.

We currently live in the Midlands but could move anywhere and get either an apartment or cottage in UK.

I have never owned an apartment and service costs worry me in pt and uk. Would it be cheaper ongoing cost wise to get a freehold villa in small village than an apartment complex? Or does it balance out with lower maintenance/cheaper heating costs?
I can't comment on Portugal but if your home is worth €830K, that's a huge budget and just depends how you spend and manage your money. We live in Ireland and have a smaller detached house in Spain to maintain, not retired though. We usually drive down and the maintenance costs per year (insurance, electricity) are probably not much more than what others spend on holidays anyway. You can easily get 2 houses for under €400K and would still have another €430K in savings, so it all depend on your priorities and the area or property you choose. A word of warning and some people might not agree but there is always a danger when you decide to live in an apartment. If you have always lived in a detached house, the noise in apartments can be a surprise.
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Old Jan 21st 2022, 1:52 pm
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Default Re: Am I in cloud cuckoo??

Thanks Moses, yes living in an apartment might not be ideal for us. We currently live on a smallholding so it would be quite an adjustment from the noise/privacy point of view. It does have the benefit of lock up and leave though if we were to be based in 2 locations.

My main worry with apartments is if the management company suddenly hike service charges. I don't know if there is any regulations or legal protection against that.
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Old Jan 21st 2022, 2:36 pm
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Default Re: Am I in cloud cuckoo??

Originally Posted by seekingsun View Post
Thanks Moses, yes living in an apartment might not be ideal for us. We currently live on a smallholding so it would be quite an adjustment from the noise/privacy point of view. It does have the benefit of lock up and leave though if we were to be based in 2 locations.

My main worry with apartments is if the management company suddenly hike service charges. I don't know if there is any regulations or legal protection against that.
To be honest, I don't see why a smaller house in an urbanization wouldn't have the benefit of lock up and leave. It's often just as easy to break into an apartment when people leave the main door open or don't know each other. It probably all comes down to location. I would assume that the condominium fees/service charges are set in the contract and decided by owners. The bigger worry might be when people don't pay and the resort is deteriorating.
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Old Jan 21st 2022, 2:45 pm
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Default Re: Am I in cloud cuckoo??

OK so it sounds like as Graham says it can be done for £25k but might be tight if emergency expenses pop up so I will think about possibly saving some of our house sale money for emergency savings when we get to that point.

I was aware of the 90/180 rule but thanks to the poster who brought it to my attention. Ideally I would have 6 months in the winter but if we stayed British resident then we would probably do Autumn & spring in portugal which would be a compromise but would extend our summer at least!

I think the best plan is to do several years of checking out different areas through holidays etc. We are coming out in April for a couple of weeks based in Lagos and will hire a car and venture out around that area. I don't need to be right on the coast but would like to be 30mins to the coast ideally.

And I don't think southern portugese winters would be too cold for me! I don't mind cold so long as I get some sunshine.

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Old Jan 21st 2022, 3:54 pm
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Default Re: Am I in cloud cuckoo??

Originally Posted by Moses2013 View Post
To be honest, I don't see why a smaller house in an urbanization wouldn't have the benefit of lock up and leave. It's often just as easy to break into an apartment when people leave the main door open or don't know each other. It probably all comes down to location. I would assume that the condominium fees/service charges are set in the contract and decided by owners. The bigger worry might be when people don't pay and the resort is deteriorating.
We downsized from 4 bed detached south Manchester to 2 bed bungalow in N Wales which we just lock up and leave for months at a time. The same goes for the Alges apartment, we only use it when my wife wants to visit family or, for a few days when we leave the car there to return home. Condo costs vary wildly depending on age, size and location. Our costs are very low, it's about 45 years old 2 bed in a residential Lisbon suburb and only costs about €1k p.a in local taxes.routine maintenance charges and insurance, any major works would be extra cost. No management agency, residents take turns as administrators.
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Old Jan 21st 2022, 4:43 pm
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Default Re: Am I in cloud cuckoo??

Gosh that is very cheap to run, especially so close to Lisbon. I guess in a good area/ development people will be more invested in looking after it and residents will be happy to take turns in the management.
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Old Jan 21st 2022, 5:25 pm
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Default Re: Am I in cloud cuckoo??

Originally Posted by seekingsun View Post
Gosh that is very cheap to run, especially so close to Lisbon. I guess in a good area/ development people will be more invested in looking after it and residents will be happy to take turns in the management.
It all depends on what you want and where, what we have wouldn't suit the average Brit looking for a holiday home to have kids visiting, fortunately we don't have any. Portugal has properties to suit everyone from semi-derelict farms for €25k to multi million properties. The boat is our main home there and nothing could persuade me to live in any of the Algarve holiday villa or apartment developments, If/when we sell the boat, I will be looking to live a few miles back from the coast in a more traditional area but certainly not in one of the villages where ex-pats seem to outnumber the locals.
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