US Retirees Pivot to Greece as Portugal Tax Regime Closes
With Portugal’s Non-Habitual Resident scheme expired for new arrivals, American retirees are targeting Greece’s Article 5B tax regime, which imposes a 7% flat rate on foreign-source income. A typical couple’s annual budget in Greece is estimated at $61,000, significantly below the US average.
American retirees are increasingly shifting their focus from Portugal to Greece, driven by the expiration of Portugal’s Non-Habitual Resident tax scheme for new arrivals and the introduction of a competitive alternative in Athens. Greece’s Article 5B of its income tax code offers a flat 7% tax rate on all foreign-source income for a period of 15 years. This regime covers pensions, Social Security, IRA and 401(k) withdrawals, dividends, and capital gains, provided the retiree’s country of origin has a tax treaty with Greece, a condition met by the United States.
The financial appeal is underscored by a significant disparity in living costs. A sample annual budget for a couple residing in coastal Greece, such as Chania in Crete or Nafplio in the Peloponnese, totals approximately $61,000. This figure, which includes housing, groceries, private health insurance, transportation, and entertainment, is roughly $17,500 less than the average US household expenditure of $78,535 recorded in 2024. The calculation assumes an exchange rate of 0.87 euros per dollar.
Real estate affordability remains a key factor in the migration trend. Habitable homes in popular Greek coastal towns are currently trading in the range of €200,000 to €350,000. This stands in sharp contrast to the US Case-Shiller national index, which stood at 332.7 in April 2026, representing approximately 3.3 times its baseline from the year 2000. For retirees opting to purchase rather than rent, a housing reserve of $250,000 is recommended in addition to investment capital.
Retirement planning models suggest that a portfolio of $600,000 to $750,000 is required to fund the period before Social Security claims begin at age 67. This "bridge" period, estimated at five years, involves annual withdrawals of $61,000, totaling roughly $305,000. The strategy assumes a 3.5% withdrawal rate and utilises short Treasury ladders yielding around 4.58% on the 10-year note. Once Social Security benefits commence, projected at $60,000 annually with a 2.8% Cost of Living Adjustment for 2026, the portfolio is preserved for later years.
Eligibility for the Article 5B regime is strict and requires affirmative action. Retirees must elect the 7% tax rate in their first year of Greek tax residency and prove they were not Greek tax residents in five of the previous six years. Crucially, individuals must sever ties with high-tax US states such as California or New York. Failure to do so can result in double taxation, as US states may still levy income tax on withdrawals without offering credit offsets for the taxes paid in Greece.
