Portugal continues to be a top destination for UK investors and expats, offering a blend of rich culture, favorable climate, and investment opportunities. The country’s strong economic stability and investor-friendly policies continue to draw foreign buyers, though the tax landscape has changed significantly. The long-running Non-Habitual Resident (NHR) tax regime closed to new applicants (with a transition window that ended on 31 March 2025) and has been replaced by the more selective Tax Incentive for Scientific Research and Innovation (IFICI), often called “NHR 2.0,” which offers a flat 20% rate on eligible Portuguese-source income mainly to researchers and innovation-sector professionals. Combined with ongoing changes to residency programs and a fast-rising real estate market, understanding the current landscape is essential. This article explores the best cities in Portugal for UK investors and expats, incorporating the latest data and developments as of 2026.

1. Lisbon – The Economic and Cultural Hub

Lisbon remains a dynamic city attracting global investors and expats. Portugal’s housing market has stayed in a strong growth cycle, with official transaction data showing property values up an estimated 15–18% over the past year — among the fastest-growing markets in Europe — driven by supply shortages, resilient demand, and rising construction costs. The city offers a blend of traditional charm and modern infrastructure, making it a prime location for real estate investments.

• Property Prices: As of 2026, Lisbon is still the most expensive city in Portugal to buy a house, with median asking prices around €6,124 per square meter (and premium neighbourhoods such as Chiado nearer €7,650).

• Investment Opportunities: Despite the termination of the real estate option in the Portugal Golden Visa program in October 2023, Lisbon continues to attract investors through other avenues such as investment funds and business ventures.

2. Porto – A Rising Star for Investors

Porto, Portugal’s second-largest city, has emerged as an investment hotspot. Known for its historic architecture, scenic river views, and growing tech industry, Porto is a fantastic choice for UK investors.

• Property Prices: In 2026, Porto’s average property prices reached roughly €4,064 per square meter and are forecast to approach €4,100 by year-end, reflecting continued strong demand in the region.

• Market Growth: The city continues to see roughly 4–6% annual growth heading through 2026, driven by increasing foreign interest and a growing tech sector.

3. The Algarve – A Paradise for Retirees

The Algarve is famous for its stunning beaches, warm climate, and relaxed lifestyle, making it a top choice for UK retirees and investors.

• Property Prices: The Algarve continues to be a sought-after region; average prices climbed from around €3,250 per square meter in late 2024 and have kept rising alongside the wider national market through 2026. Prices vary depending on proximity to coastal areas and amenities, with premium locations seeing even higher appreciation.

• Lifestyle: The region offers a high quality of life with access to top-tier golf courses, marinas, and healthcare facilities.

4. Braga – Affordable Living with Historic Charm

Braga is a northern city known for its history, quality of life, and affordability. It has been gaining popularity among investors looking for lower property prices and strong rental demand.

• Property Prices: In early 2025, Braga’s property prices averaged around €1,975 per square meter and have since risen with the national market, yet it remains one of the more affordable options among major Portuguese cities.

• Growth Potential: The city’s growing economy and educational institutions continue to attract both investors and residents.

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5. Coimbra – The Education and Innovation Hub

Coimbra is home to one of the oldest universities in Europe and a thriving student population, making it an excellent city for property investments.

• Property Prices: In early 2025, Coimbra’s property prices averaged around €2,093 per square meter and have continued to edge up since.

• Rental Demand: The high demand for student rentals offers investors steady rental income opportunities.

6. Funchal, Madeira – An Island Gem

For those who love island life, Funchal in Madeira offers a unique opportunity for investment and relocation. The region benefits from the International Business Center of Madeira (IBCM), which provides tax incentives for businesses and foreign investors. Additionally, Madeira’s special tax regime offers reduced corporate tax rates, making it an appealing destination for entrepreneurs and investors alike.

• Property Prices: In early 2025, Funchal’s property prices averaged around €3,542 per square meter, and interest has kept climbing since, reflecting growing demand in its property market.

• Market Trends: The property market in Madeira is experiencing a significant revival, driven by a younger, more active crowd, including digital nomads and remote workers.

Conclusion

Portugal offers a diverse range of cities catering to different lifestyles and investment goals. Whether you seek a bustling urban environment in Lisbon, a cultural experience in Porto, a retiree-friendly location in the Algarve, or an affordable yet dynamic city like Braga, there’s something for everyone.

It’s important to note that as of October 2023, the Portugal Golden Visa program no longer includes real estate investment as an eligible option. However, applicants can still qualify through other investment categories such as investment funds, business creation, scientific research, or cultural heritage support.

Portugal remains an attractive destination, offering diverse opportunities for investors and expats. Lisbon provides a thriving economic and cultural hub, Porto stands out for its growing tech and tourism sectors, and the Algarve remains a prime choice for retirees due to its sunny climate and strong rental market. Braga and Coimbra offer more affordable options with great growth potential, while Madeira presents tax incentives for investors. With the right city choice, you can enjoy a high quality of life while making a smart investment for the future.

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FAQs

1. What are the best cities in Portugal for UK investors and expats?
Lisbon, Porto, Algarve, Braga, Coimbra, and Madeira are great choices.

2. Can I still get a Portugal Golden Visa by buying property?
No, since October 2023, real estate is no longer an option for the visa.

3. How much does property cost in Portugal’s major cities?

• Lisbon: ~€6,124/m² (2026)
• Porto: ~€4,064/m² (2026)
• Algarve: €3,250/m²
• Braga: €1,975/m²
• Coimbra: €2,093/m²
• Madeira: €3,542/m²

4. Why do UK investors and expats choose Portugal?
Portugal has good weather, low taxes, safe cities, and a strong rental market.

5. Which city is best for rental income?
Lisbon, Porto, Algarve, and Coimbra have strong rental demand.