House Hunter: 'We want to emigrate to somewhere where it's sunny and we won't get hit by high taxes'

John and Mary Crowley write: "We have been retired for around five years but are finding the continuing increase in taxes somewhat lifestyle inhibiting considering that we have both worked all our lives and paid our taxes.

THE PROBLEM

John and Mary Crowley write: "We have been retired for around five years but are finding the continuing increase in taxes somewhat lifestyle inhibiting considering that we have both worked all our lives and paid our taxes.

"We would like to emigrate but we do not want to be too far from England where our children and grandchildren still live. Also, we are keen to find a country that is safe, sunny and which can provide some respite from tax laws.

"We started our own printing business more than 30 years ago and, I have to say, it proved very successful but we worked a steady 10 hours a day for many years before we began to feel the fruits of our efforts. Having worked so hard, but not regretted a minute of it, we were finding the daily grind more and more tiring and felt that perhaps we had earned some free time. So we have decided to sell the business and enjoy early retirement.

"We have a substantial five- bedroom home in Surrey currently worth around £750,000. Our children and grandchildren live nearby, which is nice but nevertheless we feel that we are being bombarded by stealth taxes, which are cutting into our finances. We do feel that we are entitled to a little respite and we have decided to quit England.

"Now of course has come the difficulty of finding somewhere to live which will suit our lifestyle. We like the sunshine so I guess we are looking for somewhere in the Mediterranean and we want to feel that crime is relatively low. However, what we don't want is to be penalised tax-wise and are seeking some sort of tax haven."

THE ADVICE

"John and Mary sound like many people we have helped in recent years. Crippling taxes have forced a number of Britons to seek alternative countries so they should seriously consider Portugal, particularly the Algarve, which has one of the best sunshine records in Europe and which offers peace of mind where safety is concerned with a very low crime rate.

"Their main concern appears to be tax and this is where Portugal has the answer. In accordance with EC law it has made a number of radical changes and from January 2004 they abolished inheritance and donation tax, which, provided that you are a resident in Portugal, ensures that immediate family members are not liable for death duties on inheritance of a property owned in Portugal.

"Municipal property tax is now calculated on the new value of the property, at a lower percentage than former tax legislation, and the property transfer tax will be at a significantly lower percentage up to a maximum of 6 per cent. These laws only apply to those living in Portugal. If you live in Britain and own a home abroad you must declare any overseas income but you get a discount for the foreign tax you have paid and only have to make up the difference if the overseas taxes are lower than the equivalent in Britain.

"As for living costs, petrol is 64p per litre on the Algarve and diesel costs just two thirds of the UK's price. A bottle of wine can be as little as £1. All these matters make a difference to a pension and savings and Algarve property prices are seeing an average rise of 25 per cent per annum.

"The Western Algarve may be the best area for the Crowleys as it has local charm with great swathes of unspoilt coastline. Medical facilities are superb and there are excellent road communications.

"The Crowleys should think about buying a new property, which will need little maintenance. Renovation can be costly. One vital point is to choose a new home that is built for year-round living.

"As a British person who emigrated to the Algarve years ago I cannot impress upon the Crowleys enough the pleasure they will get from this gentle part of the world."

Graham Fone is the director of Portogoa: 00 351 282 341035; www.portogoa.com.

THE SOLUTION

Property one: Vale da Pinta, near Carvoeiro, western Algarve.

Price: from £500,000 to £950,000.

Agent: Portogoa, 00 351 282 341 035.

Agent's details: These luxury villas have a prime location with uninterrupted views to the sea in a quiet location. These stylish homes are built for year-round living and each home is individually designed to suit the location of their plots. There are fully fitted kitchens, state of the art bathrooms, large pools, barbecue areas and extensive views.

Property two: Herdade do Funchal, western Algarve.

Price: £663,925.

Agent: Hamptons International, 00 351 282 789 336; www.hamptons-portugal.com.

Agent's details: This is a stunning architect- designed country villa set on a large 5000m2 plot. The property has countryside views down to Lagos and the ocean and Lagos and the new motorway are a 10-minute drive away. There are five bedrooms, three bathrooms, dining room, drawing room, kitchen/breakfast room, utility and cloakroom and outside a swimming pool is set within mature gardens.

Property three: Benagil, near Carvoeiro, Western Algarve.

Price: from around £1m.

Agent: Portogoa, 00 351 282 341 035.

Agent's details: Currently under construction, these two luxury country homes, around 800sq metres each, stand on substantial plots of up to 20,000sq metres. There will be four bedrooms, four and a half bathrooms, barbecue area, large individual pool and high-quality fixtures and fittings.

THE VERDICT

"Portugal sounds perfect. The tax angle in particular is favourable and I would like to look into this more closely. We have been to the Algarve on holiday so we know that the locals are friendly and mostly seem to speak English, which is a bonus. We have not been to the Western part but I can see that it would give us easy access to a number of major towns and cities and is less developed than the areas nearer the airport. Another interesting comment was the need to choose a house that has been built to a high standard as I was not aware that there are two types of property build. My wife feels that we should take a couple of weeks off to visit and, with prices zooming up at 25 per cent, sooner rather than later."

If you would like House Hunter's help, write to House Hunter, The Independent, 191 Marsh Wall, London E14 9RS, or e-mail with full details: househunter@independent.co.uk