bethsmyls

Hi,

I am self-employed doing internet-based work in the UK. I'm officially off sick, but have a (mostly) passive income.

My income last tax year was £6,800 after expenses (total turnover was £10,760).

I aim to do some projects to further increase my passive income and would like to move to south or central Portugal. My biz expenses would likely drop quite a bit as last year I bought lots of kit to enable me to do those projects.

Then I was looking at the cost of rent etc. on Numbeo (I looked at Setabul and Santarem. Can you really rent a 1-bed flat for £100-£200pm in these places??)

If so, I might be able to move sooner rather than later! I want to get out of the UK before Brexit.

I was wondering what the cost of living was where you are for a single person or a couple (I don't know if Numbeo is reliable).

Could anyone respond with the area they live and what they could get by on for a comfortable, but not luxurious standard of living?

About my living/business expenses:
- I need reliable internet, fairly fast, but not ridiculous.
- I don't drink alcohol, but I do smoke a lot (currently, I go on big fag runs to Europe every quarter - ciggies are completely unaffordable here)
- I don't have hobbies like cinema or gym, but I like to eat out sometimes and visit museums.
- I eat fresh food mainly - meat, veg, dairy, salad.
- I don't have a car, and would likely need to use public transport for weekly shopping.
- I'm not a "shopper" and rarely buy clothes, although as a lady, I need my make-up and the usual hygiene products and toiletries.
- I'm not on prescription meds, but do need to buy medical supplements, which I usually do online in bulk to save money.

I do have a partner, and we are still working out what he could do for income. But based on the above, could I live in your area?

Many thanks!

mfesharne

Minimum wage here is about €550 per month.

I think it's highly unlikely you'll be able to rent anywhere decent for £100-200 per month & even in the central zone (where we are) you'd have to pay more like €350-400 per month plus services for anywhere reasonably comfortable but that'd get you a 2 bedroom apartment with central heating, air con & unlimited internet etc.

Cigarettes are in the region of €5/20 & a pack of tobacco is about €8 for 30g.

Eating out: A 3 course 'plate of the day' lunch with coffee can be had from about €6-8 per person.

Meats from about €2/kg & upwards, cabbage, onions, spuds, carrots from the market from about 0.50c/kg

Gas, water & electricity etc costs obviously depend on consumption but are all reasonably priced & I'd guess significantly cheaper than the UK - Same for fuel.

As for your partner finding work........ That'll largely depend on his skills but bear in mind that Portugal has a massive unemployment problem which is why more than 20% of it's younger populations have left in recent years & what work there is will go to Portuguese people who have local connections & speak the language before he'll get a look in.

macliam

Plus, you would need to register yourself as self-employed here BEFORE you start working - and the discounts and allowances are far lower than in the UK. In order to register here for residency (required after 3 months) you will need to prove you will not be a burden on the state, which means either having savings to see you through, or an income.

As has been said, the reason why many things might seem cheap in comparison to the UK is that people earn less - far less. So any work achieved in Portugal will be at a rate far below those in the UK.

Toiletries are FAR more expensive than in the UK ........ expect double the price and then some for the "standard" products. I also find internet charges and electricity costs far higher than in the UK and outside the main towns it is mostly bottled gas. Transport is cheap and good but outside the main areas it is also infrequent (I have 3 buses a day to Lisbon or the Algarve and the train station is 15km away with half a dozen trains a day in each direction.)

Check back over past threads and you'll find many, many people who think a move to Portugal is a good idea ...... and many, many reasons why it might not be.

MrBife

If you are going to have to pay rent then in my view you need to budget around €1000 a month to have a reasonable existence. If you own your own place already then half of that; as rent is going to be around €500 for something you can live in all year round.

If you are managing on £6800 a year in the UK its hard to imagine you are paying rent there ? Or that is covered by your partners salary ?

Sunseeker1st

Here in Algarve you can rent long term for €300-325 a month plus utilities ... I know because we rent two (one an apartment walking distance to the beach and one an old townhouse in a village with a sea view). Both have modern kitchens and bathrooms.

Also on the toiletries front, I am a fan of Revlon Flex shampoo and buy 650ml for €3.75 at the Chinese shops ... of which we have many down here, along with other brand name products ... that is way cheaper than Continente etc or the UK.

I agree with what else everyone says.

bethsmyls

Thank you for everyone's advice so far. Very helpful. To explain a bit more...

I wouldn't be working with Portuguese customers. I'm a writer and sell my books via Amazon. I can't do regular work as I am chronically ill, but I'm trying to get more books written on my better days, and aim to make some digital products to increase my passive income.

I currently live in London in a house shared with 4 others. Since I am chronically sick, I get sickness benefits (ESA and PIP) to live on, and Housing Benefit that covers the rent for my room (£600pm odd). With those benefits, you must declare any other income for the year (like my royalties), and then they reduce your benefits accordingly.

My original target was to increase my earnings/royalties by at least the amount of benefits I receive. I must do that if I stay in the UK, as I don't want to live on benefits, even if I am sick. I want to be in a position with my passive income, that if I never recover or get worse, I can still live reasonably well on what I have coming in. I would be so relieved to be in that position!

But then I realised, if rent and the cost of living is lower abroad, I might be able to move sooner than that. Nowhere is as expensive as London and it's not doing my health much good being here.

I want to get out before Brexit. I probably won't, of course, as this all depends on how well I am - I work so much more slowly these days and many days I can't do anything at all, so it may not be achievable as quickly as I'd like. And my partner is the other issue - he may be in a position in the next year or so to take over an existing UK business, which he could mostly manage from abroad, with occasional flights back to check up on everything.

But I was kind of wondering, what my target income should be, given the lower cost of living and my needs. Does that make a bit more sense now? And can anyone point me to a website where I can look at allowable expenses for self-employed/home-workers in Portugal?

Many thanks.

mfesharne

I think you need to be realistic with rents & heating costs especially.

The lifestyle you describe means you could live away from the touristy areas & big cities so that means you could consider the lower priced central & northern zones & I'll use my own place as an example. (Because we have a guest apartment we occasionally let - (Website immediately below this post)

You'd get this for €350 ish per month plus utilities and as you're working from home, you'd need winter heating for a significant period......... Which means rent + water + gas + heating would probably cost you in the region of €500-600 per month for 4/5 months of the year & about €500 per month for the other 7/8 months of the year.

Working on that principle I'd say you'd need an income of something in the region of €1000 per month at least and preferably a little more.

I should add that whilst I've used our place as an example, it may well not be suitable for your own particular needs because it's on the first floor & it sounds like that might not be ideal for you.

Hope that helps.

macliam

For tax purposes, it doesn't matter where your customers are, it matters where YOU are. So, if you're in Portugal, you'll pay tax in Portugal - so if you think your income will be tax-free, it won't be as Portugal taxes you on your worldwide income. Also, since the average earnings in Portugal are so much lower than in the UK, you may actually end up paying more tax here than in the UK.

Nor are you likely to receive any benefits, or tax breaks etc. here - so, in some ways you're better off in the UK. Portugal has been "in crisis" for several years - and the biggest cuts have been to the social welfare programme. My neighbours get the standard state pension here - it is less than 300 euros a month!

So you'll need to check and think very hard before making the jump. Portugal is a lovely country, but only for those who can support themselves ...

bethsmyls

Thank you mfesharne. that's a useful breakdown.

It also seems like Numbeo is probably wrong on a number of things!

I was looking at the Santarem/Setabul areas because they seemed a good mix of things, which of course, I may be wrong about.

I'm looking for:

- Fairly affordable
- Sunny weather (I have a neurological condition and Vitamin D helps, as well as making my mostly home-bound life a bit more pleasant)
- Amenities on the doorstep (I have mobility problems)
- Not too busy (I live in central London and the fluorescent lights everywhere, constant crowds of people and traffic, make me feel iller).

I know it's hard to find a balance of all amenities really near, but not somewhere busy! I was thinking, a small city or large town might best suit my needs.

When I visited Faro in March a few years back, it was pretty much what I was aiming for. Nice streets, pretty, easy to get around, all amenities, good transport, sun, but not crowded. (I know the pace probably picks up a little in the summer, but Faro is not Lagos or Albufeira!) Sadly, Faro isn't really good for housing, even though the cost of living seems fairly good.

I thought Santarem or Setabul might be a good fit, but am open to other suggestions.

mfesharne

Anywhere on the coast is going to be reasonably priced in winter but summer rents will be more for a week than you'd pay for a month in the central or northern zones so perhaps you should consider coastal areas in the winter & central/northern zones in the summer?

bethsmyls

Thanks for your reply. Yes, I wasn't thinking of evading tax. (In fact, I already pay Portugal a bit of tax on my Kindle books.) But most of my custom comes from the US and the UK - so I'd aim to earn a US/UK living, but spend my money somewhere nicer and where the cost of living is lower.

I have no intention of claiming benefits in Portugal. I wouldn't move anywhere until I had enough income from outside the country to be able to afford to live there comfortably. I just wanted a rough calculation of what that might be.

I know, if I stayed here in central London, I'd have to find a way of making about £22k more per year than I do now to get off benefits entirely and live comfortably enough. I was thinking that figure wouldn't be so high in Portugal, or most parts of Portugal.

bethsmyls

Thank you - that's something I'd not considered, but sounds like good advice

macliam

I think you misunderstand. For online sales, where your cusomer is might be important for VAT, but any income or profit derived from the sale is taxable where YOU are ..... so you'd be liable for tax in Portugal on ALL your sales.

Taxation works differently here so you'd best check.

Setubal is a nice place, with relatively good links to Lisbon and on the coast. It's not a tourist area so seasonal variation won't be as great as in the resorts. I've visited Santarem, but wouldn't choose to live there .... but I'm sure it's cheap.

bethsmyls

Thanks for this. I'm not bothered where I am taxed, as long as it only happens once! I know life is a bit harder for the self-employed in Portugal, with much higher social security rates than the UK and I am aware that taxation brackets kick in at lower incomes than in the UK too. Of course I have to look into it more.

These are all things to consider and calculate when trying to work out the basic level of income I would need to be comfortable. This is exactly why I'm asking these questions,

For me, I'd rather be taxed more and live a happier life, as long I can sustain myself with what I have left over.

Thanks for the thumbs up for Setubal. I'll check it out further.

There are lots of run-down looking houses for sale in Santarem on the web - but they only state they are in the district. It's difficult to tell where exactly. I thought the city might be OK. Again, more homework to do...

macliam

Sometimes it's almost impossible to tell where properties are on the web - and the populations can seem tiny. My house was advertised as being in Ourique (which is a town of under 5,000 people), but I'm actually 15km from there ..... so virtually impossible without transport. Fine for me, but not in your case. When I was checking houses in Marvao some time ago, of 23 houses returned, not a single one was within the town itself. So unless it actually says it's in the centre, presume it isn't.

PS, "City" is an interesting concept in Portugal - it doesn't indicate size, just whether or not it has a royal warrant ("Foral"). Santarem shows a poulation of just over 61,000 in 2011 - but that's for the district, the city itself was under 30,000 (2012)..... so you can imagine that the infrastructure isn't what you might think. Setubal has a population almost three times higher (but still only 90,000). Also, there are lots of "run down buildings" in many areas, because populations have dwindled due to emigration and a move to the real cities (Lisbon and Porto) .... the population of my district was 3 times higher in 1960 than it is now....

However, I think your biggest problem might be in persuading the authorities that you are self-supporting in order to qualify for residency - unless your partner can find paid work or you have considerable savings. As I said before, you need to declare you intention to work as self-employed to the taxman before starting (unlike in the UK) and provide an estimate of earnings. Then there are ways to limit your tax - but you'll need to talk to a professional to ensure you aren't penalized.

If you can survive here, it's great - but be aware that most expats don't need to work to live - so have a different outlook. Life for the average Portuguese is quite tough, in most families both husband and wife work yet the level of personal debt is high ...... and not many go on foreign holidays! The level of emigration is such that Paris is the second largest Portuguese city and London has as many Portuguese as most cities in Portugal..... and they certainly don't emigrate for the sun!