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Portugal is located on the western edge of Europe. Year after year, the country sees a flock of tourists and expats, that are looking to relocate, retire, or are, simply visiting the country. Some of the key reasons include Portugal’s rich history, stunning beaches, and unique cities. Life in Portugal is easy-going, you can slow down, soak up the atmosphere and relax. However, the most attractive feature – even more so than its beaches and weather – is that cost of living in Portugal is very affordable, particularly when compared to the USA and northern European countries.

Although Portugal is inexpensive, the quality of life is not compromised. However, you need to make a budget for important costs as the living costs will obviously fluctuate based on your lifestyle. You need to maintain a balance so that you can save money and also enjoy living in the country at the same time. In this article, we’ll go through the cost of living in Portugal, covering various aspects that you should be aware of.

Affordable cost of living in Portugal

In all of western Europe, Portugal arguably has the lowest living costs, from groceries to accommodation, everything is pretty affordable. According to Numbeo, the average cost of living in Portugal is 35.25% less than in France, and 31.89% cheaper than in Germany. Nevertheless, it varies depending on your lifestyle and expenditures. You need to watch your income, financial situation, and spending habits.

Expenses per month in Portugal

A modest income in Portugal can go a long way. According to numbeo, the average net salary per month after taxes is about €990. If you watch your expenses, you can live for less in Portugal and most of the locals live on less than €875 to €1070 a month. A couple with a mid-range income can get by with €1,700 a month in the smaller cities of Portugal. If a couple is starting out in Lisbon, their monthly expense will be €2,000 onwards a month.

If you are single, you can get by comfortably with €1,200 a month in Porto or Lisbon, and even less in Portugal’s smaller towns. With a higher income, you can live anywhere in Portugal with €3K a month, participate in various activities, go on weekend trips, and much more.

Cost of living in Portugal – Property

When you relocate to a new country, the first priority is the accommodation. The expectation is to get a reasonable price, whether you rent or buy a property. In this section, we will provide you with costs related to buying a property, mortgages, and rent in Portugal.

Housing costs

The lower housing cost in Portugal makes buying a property a better choice than taking something on rent. You can find decent and comfortable apartments under $100,000 in the interior regions of Portugal. You can find smaller properties under $150,000 in the outer Lisbon neighborhoods. However, before buying an apartment, do note that the average size of apartments in Portugal is smaller compared to the US. A 550-square-foot apartment is adequate for a single person or a couple. If you need three or four bedrooms, you can go for a 1,000-square-foot apartment, perfectly suitable for a small family.

The average rate per square meter in the city center is €2,955 and that outside the city center is €1,995. The real estate market in Portugal is usually stable and is  growing after the financial crisis in 2012 and the small blip due to COVID-19. If you invest a decent amount in a good area, there are high chances of getting a solid return on your investment. . If you are new to real estate terms and are unsure about what properties you should be considering or where to buy, you can contact GoldCrest. We have professionals with many years of experience, who can help you with your property purchase.

Mortgages

Before buying a property in Portugal, you must make proper financial arrangements. The important thing to consider while making financial arrangements is taking out a mortgage. Both residents and non-residents can take mortgages from Portuguese banks. The process of applying for a mortgage is straightforward. A mortgage is a widely followed path to finance a property investment in Portugal and there are many different banks that offer mortgages.

The mortgage rates in Portugal begin at 3.3% per year based on a 30% loan-to-value. The rates vary if you require more credit, for instance, 60% or 70% loan to value. Also, you can opt for fixed rates that are available at 4.1% for up to five years based on a loan-to-value ratio of up to 70%.

Here are some of the benefits of taking a mortgage in Portugal:

You can see more information about financing your property in our article How to Get a Mortgage in Portugal.

Renting

If you are not interested in buying a property in Portugal yet, and looking for an economical option, renting a place is the smart option.  In the heart of Lisbon, a one-bedroom flat can cost around €670 a month, which costs double this price in London, although prices are increasing rapidly. However, you can rent a property for as little as €350 in the interior towns of Portugal.

The people in Portugal intend to spend only a small percentage of their income on rent. However, the rent you spend depends on the set-up you are looking for. Sharing a room in an apartment is the cheapest option, and common in Porto and Lisbon, a hub for students and workers.

Other living costs in Portugal

In general, people in Portugal earn less compared to other Western European countries. Other than the property costs, there are many other living costs you need to consider before moving to Portugal. Here, we shall discuss some of the other living costs in Portugal.

Taxes

After relocating to Portugal, your tax liability depends on your residency status. The residency status is defined by how many days you have stayed in the country each year. If you live in Portugal for 183 or more days in a calendar year, then you are considered a resident and are required to pay tax on your worldwide income. Your worldwide income includes rental income, salary, and capital gains. If you live in Portugal for less than 183 days, you are a non-resident and are required to pay on income earned only within Portugal, which is a flat rate of 25% of your income.

You need to know about the transfer tax (property tax), before purchasing a property in Portugal. The transfer tax ranges from 1 to 8%, depending on whether it is  your  first or second home in the country and also on the purchasing price. Additionally, there is a stamp duty of 0.8% you need to pay during the purchase process.

When you are the sole purchaser of your property and if it’s worth over €600,000, you need to pay the wealth tax to the Portugal government. As soon as you get to Portugal, you need to get two tax numbers, one is a regular tax identifier (NIF) and the other is for social security. The social security tax number helps you in social programs, such as unemployment and the healthcare system.

If you have registered yourself as a tax resident in Portugal, and have the Non-Habitual Residency (NHR) status, you can enjoy considerable tax benefits.

Utility costs

After drawing up a budget for your housing and properties, you need to monitor your utilities and home service expenses. The utilities include heating, water, electricity, garbage collection, mobile tariff, internet, and much more. The data on Numbeo suggests that  the utility bills come to around €110 a month in an 85m² apartment, If you want to know how affordable this is, you need to check the same expenses with other countries. For instance, in the UK, this is €203.35.

If you are living in southern Portugal, then you need to get the air conditioning during summer, which results in an increased electricity bill. In general, you might need to heat the apartment during Portugal’s mild winter as houses can get pretty cold in the winter months.

Here are the average monthly utility costs in Portugal, which might vary based on your usage. Note that the bills are issued every two months.

Utility Charges per month 
Combined cost of electricity, water, gas, and garbage collection€108.52
Local prepaid mobile tariff for 1 minute without discounts or plans€0.15
Internet packages (unlimited data, 60Mbps or more, cable/ADSL)€33.43

Source: Numbeo

Transportation

Portugal is one of the most beautiful countries in western Europe, with stunning beaches, incredible food, wine, and picturesque towns. It would be a shame not to explore it all. Fortunately, the travel costs are fairly affordable in and around Portugal. The petrol cost is slightly expensive in Portugal, costing €1.50 a liter. However, a new car costs only €5,000, which is cheaper compared to other European countries.

A one-way ticket in local transport costs €1.60, and a monthly travel pass costs just €40. You can find affordable taxi fees, although Uber and Bolt offer even cheaper fares. The average Taxi fee is €3 and increases by €0.50 per kilometer. Based on Portugal’s rail site, a cross-country train ticket, say, from Lisbon to Porto costs around €29.44 to €35.99.

Dining out

Similar to every other cost, dining out in Portugal also comes at an affordable price. You can easily dine out two times a week and not feel guilty about it. Portugal has a reputation for incredible food and wine, with delicious fresh seafood. You can enjoy high-quality food without the premium price tag, which is usually the case in other countries like France.

You can eat a regular solid meal in Portugal for €20, and a drink or two at a surprising price. A glass of wine for €3 and a beer just below €1. For more information, refer to the below table:

Meal at an inexpensive restaurant€8
Three-course meal for two people in a mid-range restaurant€35
Domestic beer (0.5 liters)€2
Imported beer (0.33 liter)€2
Cappucino (regular)€1.44
Water (0.33 liter)€0.89
Coke/Pepsi (0.33 liter)€1.36

Source: Numbeo

Everyday essentials

When you are not eating out, you will require some basic essentials at home to cook for yourself. The cost of essentials are very reasonable, especially when you are shopping for local produce. The local produce is very fresh and of great quality. The fish prices in Portugal are also highly affordable, as it has a long coastline. Here, we provide you with a detailed list of essentials and their average cost below.

Milk (regular, 1 liter)€0.67
White rice (1kg)€1.00
Local cheese (1kg)€7.13
Loaf of fresh white bread (500g)€1.11
Eggs (regular, 12)€1.89
Beef round (1kg)€9.17
Chicken fillet (1kg)€5.23
Banana (1kg)€1.11
Apples (1kg)€1.64
Oranges (1kg)€1.26
Potato (1kg)€0.95
Tomato (1kg)€1.59
Onion (1kg)€1.09
Lettuce (1 head)€0.97
Cigarette (20 pack, Marlboro)€5

Source: Numbeo

Leisure activities

Portugal is an active and vibrant country, with people enjoying their sports, spa, and much more during their leisure time. They have an ample amount of football fields, tennis clubs, and white water rafting. They even made an initiative to install “Parque Ambiental”, which are parks for recreational activities, such as walking, climbing walls, bicycle routes, and other endeavors. If you are a movie buff, the country has a lot of movie theaters, where they show English language movies in the original language with Portuguese subtitles.

Here are some of the sports and leisure activities in Portugal and their average cost:

Fitness club€33.46 (monthly fee for one adult)
Cinema international release (1 seat)€7.00
Tennis court (one hour in a weekend)€11.36

Source: Numbeo

Childcare

In Portugal, public schools offer basic education for free to both citizens and foreign residents till the students are nine years of age. Lessons are taught in Portuguese.

If you opt for a private school, then you need to pay the required amount for the education.  Private schools charge you between €400 and €500 per month from primary to high school, which does not include the enrollment fee and book fees. Portugal also has English-speaking international schools, where the fee is around €7,500 per year, in addition to the enrollment fees, books, uniforms, etc.

Healthcare

There is two categories of healthcare systems in Portugal, namely, public healthcare and private healthcare. Public healthcare is almost free for all citizens and legal residents. You need to pay a small fee for a few selected procedures, which include visiting a family doctor, the emergency room, or taking a diagnostic examination. The fee can be anything from €5 to  €20. The diagnostic exams cost not more than  €40.

Private healthcare in Portugal is more expensive than the public healthcare system, and you’ll have to pay an average of €40 to €50 for a doctor’s appointment.

Private health insurance varies depending upon your insurance plan. There are different types of health insurance plans in Portugal, and you’ll need to choose one that suits you the best. The prices of private insurance, on average, are around €400 a year, prices can go as high as €1000 when you choose a more comprehensive insurance plan.

Cost of living in Portugal – retirees

The living costs for retirees in Portugal are surprisingly cheap. In general, the cost of living in Portugal is about 25% lower than in the US, and 27% lower than in the UK. Renting a property alone is 30% cheaper than in the UK and US. You definitely will live a very comfortable and relaxed lifestyle and will find most things are very reasonably priced,, from transportation to groceries, healthcare to property prices.

Cost of living in Portugal – international students

The Portuguese universities have some of the most affordable degrees in Europe, and it is the very good place to improve your Portuguese language skills. The cost of living in Portugal for international students depends on the city they choose to study in. Even though the tuition fees are cheap, there are other costs you are required to cover during your stay, such as food, accommodation, study materials, and so on.

The prices in Lisbon and Porto are increasing, yet, you will find that you are able to get by at a much cheaper rate than in most other Western European cities, such as London and Paris.

Cost of living in Lisbon, Portugal

Lisbon, a vibrant and active capital city of Portugal is a bit more expensive than all the other cities. While Portugal is considered one of the most affordable countries in Western Europe, Lisbon has its own living costs. If you are looking for luxurious high-priced properties with extra facilities, such as a gym or a pool, then the costs might go higher. However, the cost of living in Lisbon is much lower and more affordable than in other European countries.

If you are interested in knowing more about living costs in Lisbon, please check our guide on the cost of living in Lisbon.

GoldCrest: how can we help you?

GoldCrest offers outstanding investment opportunities in some of Portugal’s finest and most beautiful locations at a surprisingly affordable cost. We can provide you with insightful real estate expertise and strategic advice, as we are expert local buyer’s agents in Portugal.

If you are looking to relocate or invest in the land for redevelopment, do not hesitate to contact us, our team of experts can help you find the right property that suits your requirements, working with you to secure the perfect property.

Know more

Here are some of the articles that you might find useful:

Frequently asked questions

Is Portugal expensive to live in?

Portugal is the most affordable country in western Europe. The average cost of living in Portugal is €1,500 a month. However, it varies depending upon the place you choose to live in.

Is it cheaper to live in Portugal than in the US?

Portugal is cheaper to live in than the US. Just about everything, healthcare, groceries, transportation, and properties are available at a reasonable price. In Lisbon, rent for a property is 46.37%, consumer prices are 37.8%, and restaurant prices are 57.21% lower than in Washington, DC.

Is healthcare free in Portugal?

The public healthcare system is almost free for residents and citizens of Portugal. However, you need to pay a small amount for a few procedures, such as diagnostic examinations, visiting a certain doctor, or visiting an emergency room.

Is the cost of living in Portugal low?

The cost of living in Portugal is very low compared to many other Western European countries. From daily essentials, real estate, and restaurants, you can get by very well cheaply.

What is the average cost of living in Portugal?

It depends greatly on your lifestyle and the place you choose to live in. The average monthly salary in Portugal is low, however, the affordable cost of living makes up for the low income. The average monthly salary after the taxes comes to around €850. Many locals in Portugal get by with less than €750 a month. The cost of living for a couple in smaller cities in Portugal is around €1700.

What is the cost of living in Portugal for a family of four?

According to numbeo, the cost of living for a family of four in Portugal can be around €1,936.06, excluding the rent.

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