In recent years, a growing number of Americans have been retiring abroad, drawn perhaps by tax incentives, a lower cost of living, or simply a different pace of life. Yet, while the appeal seems apparent, relocating to a new country often comes with a complex set of tax rules, residency requirements, and immigration hurdles. Here, The Retirement Group explores some of the top issues to consider if you’re planning a move to one of five of the most popular destinations: Greece, Portugal, Ireland, Italy, or Spain.
Key Factors to Consider
When assessing the affordability of retiring abroad, three key factors come into play:
There’s also one constant that applies no matter where you choose to move: U.S. citizens and green card holders are taxed on worldwide income, no matter where they live. That means a favorable foreign tax rate may not deliver the tax savings you expect, depending on the taxes you may still owe the IRS.
What follows is a country-by-country look at the rules in force as of mid-2026. Treat it as a starting point for research, not a substitute for advice from a cross-border tax advisor or immigration lawyer.
Among European countries, Greece offers the longest-running tax incentive for retirees. Under Article 5B of the Greek Income Tax Code, a foreign pensioner who relocates their tax residency to Greece can lock in a 7% flat tax rate on income earned outside the country. Once approved, that rate holds for up to 15 years and applies not just to your pension, but also to foreign dividends, interest, rental income, and capital gains.
Flat Tax Eligibility
To be eligible for this flat rate, you must:
Notably, income you earn inside Greece is taxed separately at the country’s standard progressive tax rates, which range between 9% and 44%.
As in many other European countries, you will be considered a Greek tax resident if you spend at least 183 days per year in the country or have your “center of vital interests” there. A separate path exists if you’d prefer to buy your way to residency;, however, this route has become considerably more expensive since Greece overhauled its Golden Visa program in 2024 (see Table 1).
It's important to understand that the Golden Visa runs independently from the 7% tax exemption.
While owning a qualifying property secures residency, it does not automatically grant the 7% rate. You would still need to apply separately for each.
For over a decade, Portugal was widely considered one of the best places to retire in Europe thanks to its Non-Habitual Resident (NHR) regime, which taxed qualifying foreign pensions at a flat 10% rate. However, that program stopped accepting new applicants at the end of 2023, and the grace period for people with pre-existing ties to the country has now expired as well.
Its replacement, known informally as NHR 2.0, is called the Tax Incentive for Scientific Research and Innovation (IFICI). As its name implies, this incentive is targeted towards researchers and specialists in a short list of technical fields, not retirees. As a result, Portugal no longer offers special tax treatment for foreign pension income.
In practice, this means Americans who move to Portugal in 2026 will pay the country’s ordinary progressive tax rates on their pension, which could climb as high as 53%. Although a tax treaty between the U.S. and Portugal prevents double taxation, it does not reconstruct the old 10% pensioner rate. If you’re considering a move to Portugal, be sure to run the numbers on current rules rather than those that applied during the old regime. See Table 2 for a comparison.
New Golden Visa Rules
Portugal’s Golden Visa rules have also changed in recent years. The real estate route to residency was eliminated in October 2023. Most applicants now use a €500,000 euros (about $570,000) subscription into a regulated Portuguese investment fund that holds no real estate. While you can still buy a home in Portugal, it no longer earns you the visa.
No Inheritance Taxes
On the plus side, Portugal’s estate planning rules remain generous. The country abolished its inheritance tax in 2004. What remains is a 10% stamp duty that applies only to heirs outside the immediate family. Spouses, children, grandchildren, and parents all inherit tax-free, regardless of the size of the estate.
Ireland’s appeal for American retirees often has less to do with tax policy, and more to do with a shared language and actual family history. The primary issue? There is no general retirement visa. The closest option, Stamp 0 permission, is restricted to people of “independent means” who can support themselves without working (see Table 3).
Only after that status is secured can retirees apply for Ireland’s Vacant Property Refurbishment Grant, which is funded through the Croí Cónaithe program. While the grant is available to Americans in principle, the conditions are specific. See Table 4 for details.
If you’re thinking of retiring to Ireland, you will need to plan the visa and grant together. Qualifying for Stamp 0 is difficult, and it does not confer residency. Similarly, finding a property that fits the grant’s rules does not give you the legal status to stay in Ireland to finish the work.
Rather than paying a flat tax rate on foreign income, retirees moving to Italy are expected to pay an annual fixed euro amount for up to 15 years to cover all income earned outside the country (see Table 5). That amount has increased twice in under two years, so much of the information you see online may already be out of date.
The increases don’t apply retroactively, so anyone who moved before 2026 will continue paying their current flat fee. However, those moving after January 1, 2026, will owe the higher rate. Either way, to qualify, you must have spent nine of the past 10 ten years outside Italian tax residency. You will also owe ordinary income tax at the applicable rates on all Italian-source income, in addition to the flat fee.
The math here is clear. Unless you are genuinely wealthy, a €300,000 euro fee will likely be prohibitive, making Italy a less appealing destination than it once was for many foreign retirees.
American retirees interested in moving to Spain may be attracted by the “Beckham Law”, codified in Article 93 of Spain’s tax code. This is a flat-rate tax for people who relocate to Spain, but not as retirees. In fact, to qualify for this flat rate, you must:
Retirees living on a pension and investment income meet none of these criteria. Instead, retirees must rely on Spain’s Non-Lucrative Visa regime and can expect to pay ordinary Spanish tax on worldwide income (see Table 6).
None of this makes Spain a bad choice. It’s just a country that requires you to do some tax homework in advance.
Crunching the Numbers
To understand how these different tax regimes may compare in practice, consider the hypothetical example of a married American couple whose foreign source retirement income is roughly $80,000 per year (about €70,000 euros). These numbers are illustrative only and do not reflect actual amounts owing.
While tax treaties prevent double taxation in all these cases, you will still owe the difference between any taxes you pay abroad and any U.S. taxes owing. As even these rough calculations make clear, the math here is complex. This makes it important to work with an accountant to model your taxes well in advance of any move.
While income taxes owing remain real no matter where you live, there are certain U.S. tax provisions that may mitigate your overall tax burden (see Table 8).
If you buy property abroad, the Foreign Tax Credit may offset foreign taxes owed on rental income. For its part, Section 121 may shelter gains you realize on the sale of your principal residence, as long as you lived in the home for at least two of the five years before the sale.
Notably missing from this list is the Foreign Earned Income Exclusion. While this provision shelters up to $132,900 of income per qualifying person, it applies only to active work performed abroad, not to retirement income.
Given the different tax rules, visa requirements, and cost of living considerations that apply to each of these five countries, the best destination to retire will depend on your personal priorities. If the lowest possible tax rate attracts you, Greece could be a good choice. Conversely, Portugal or Ireland may make more sense if you value lifestyle over tax savings. With recent legislative changes, you might consider Italy if your income levels are truly high. For its part, Spain could be attractive if you are willing to plan carefully around ordinary taxation.
Whatever the destination, the U.S. tax system follows every American retiree abroad. Determining the right fit for your circumstances means running real numbers based on the size and sources of your income, how long you plan to stay abroad, and your personal tax and estate planning objectives. Before making any decisions, speak with a cross-border tax advisor and immigration attorney.