Rachel Reeves delivered her second Autumn Budget on 26 November 2025. Within 48 hours of the UK budget 2025 Portugal discussions, our inbox looked noticeably different.
The calls from UK buyers didn’t stop over Christmas. They haven’t stopped since. And the questions have changed. People who were casually curious about Portugal six months ago are now asking about D7 visa timelines, property tax structures, and school options in the Algarve. Something shifted, and it wasn’t subtle.
We’re not tax advisers. We’re not going to pretend we can give you a technical breakdown of every line in the Finance Bill. But we talk to British families thinking about Portugal every single week, and we can tell you what’s driving them out the door. A lot of it traces back to this budget.
What actually happened on 26 November
Most of the UK press focused on the headline drama. The OBR accidentally publishing its forecasts early. Kemi Badenoch’s response. The political theatre. But the substance is what matters if you’re trying to plan your financial future, and the substance was pretty sobering.
The big one: personal tax thresholds, which were already frozen, got frozen again. Until 2031 this time. The Institute for Fiscal Studies called the cumulative effect of this freeze (running since 2022) the largest tax rise in 60 years. No headline rates changed, but as wages go up and thresholds stay put, more of your income lands in higher bands every year. It’s a stealth tax rise, and a massive one.
Then there’s property. From April 2028, anyone owning a home worth over £2 million faces a new annual surcharge on top of council tax. £2,500 for properties between £2 million and £2.5 million, going up to £7,500 above £5 million. The House of Commons Library confirmed the details in their budget summary. No taper, no allowance. Just a flat charge.
Property income gets hit too. From April 2027, rental income will be taxed at separate, higher rates: 22% basic, 42% higher, 47% additional. If you’re a UK landlord who’s been on the fence about selling up, that might tip the balance.
Dividend tax goes up 2% from April 2026. The OBR has cut its productivity growth forecast to 1.0%, down from 1.3%. Government debt is heading towards 97% of GDP. And the IFS pointed out that most of the planned savings are backloaded to the end of this parliament, which is code for “they might not actually happen.”
None of this is secret. It’s all in the public documents. But reading it in one go, as a high earner or property investor based in the UK, it’s hard not to feel like the walls are closing in a bit.
The Wexit thing
“Wexit.” Wealth Exit. You’ve probably seen the term in the FT or heard it from your accountant. It describes something we’ve been watching from the Portugal side for three years now: British families with means and mobility quietly looking at their options abroad.
It’s not a stampede. Nobody’s fleeing in the middle of the night with suitcases full of gold. But the pattern is real. A couple in their late 40s with a business that runs remotely. A recently retired pair who’ve just sold a house in Surrey. A family with kids in private school wondering whether the fees might go further somewhere with better weather and lower stress. We talk to all of these people. Regularly.
What the budget did was take a vague feeling (“maybe we should look into this”) and turn it into a concrete question (“how do we actually do this?”). The enquiries we’ve received since November are more specific, more serious, and more advanced than what we were seeing a year ago.
Why Portugal, specifically
We could give you the tourist board version. Sunshine, seafood, safety. All true, all important, all a bit generic. So instead, here’s what our actual UK clients tell us made the difference.
Proximity. This comes up in literally every conversation. Faro is two and a half hours from London. You can fly back for a meeting, a family birthday, a medical appointment, and be home the same day. For people who aren’t ready to fully cut ties with the UK (which is most people, at least initially), that matters more than anything else. Spain has it too, but Portugal’s combination of flight connections and size means you’re rarely more than an hour from an international airport wherever you are in the country.
The D7 visa is predictable and well understood. It requires proof of passive income (pensions, rental income, dividends, investment returns), health insurance, and somewhere to live in Portugal. You don’t need to invest a specific amount. You don’t need to start a business. You apply through the Portuguese consulate in London, and the process, while not fast, is well-trodden. After five years, you can apply for permanent residency or citizenship. Thousands of British people have done it.
Then there’s the cost of living. A couple we worked with last year sold a four-bed in Hampshire for £1.2 million, bought a three-bed villa in the Eastern Algarve with a pool and sea views for €650,000, and still had money left over. Their council tax in the UK was nearly £4,000 a year. Their IMI (annual property tax) in Portugal is under €800. Their weekly food shop costs about 60% of what it did in Waitrose. Those aren’t made-up numbers. That’s one family’s real experience.
And Portugal ranked 7th globally in the 2025 Global Peace Index. The healthcare system works. The international school network across the Algarve and Lisbon is strong. The expat community is established enough that you won’t feel isolated, but Portuguese enough that you’re not living in a British bubble. Unless you want to, in which case that option exists too.
A word of caution
Portugal isn’t a magic fix. Moving countries is hard. The bureaucracy here can be maddening (we say this with love, and extensive personal experience). Learning even basic Portuguese takes effort. And the property market, while offering great value compared to the UK, has its own risks and traps that catch foreign buyers out regularly.
Agents in Portugal represent sellers. There’s no Rightmove. Pricing is opaque. Properties get listed at wildly different prices by different agencies. Legal due diligence works differently here, and notaries don’t do what you think they do. If you treat this like buying a house in England with better weather, you’re going to run into problems.
That’s what we exist for. We’re buyer’s agents. We work for you, not for sellers. We search the entire market, tell you what things are actually worth, negotiate the price, and manage the process so you’re not navigating an unfamiliar system alone. If you want to understand the full costs and process, we’ve written a detailed guide.
Watch the Masterclass
We hosted a Masterclass on the UK Budget, Wexit, and Wealth Planning with expert contributors covering the tax implications and how to approach an international move with your eyes open. The recording is free. Worth an hour of your time if this topic is on your mind.
Talk to us
If the budget accelerated your thinking, or if you’ve been quietly researching Portugal for a while and want to talk to someone who does this every day, reach out. No pressure. No pitch. Just an honest conversation about what you’re looking for and whether it makes sense.
Contact Joe Pyke | +351 918 276 752 | joe@thebuyersagentportugal.com
