Culture, adventure, and mystique await in Portugal. If you’re in the midst of planning to move to Portugal or have recently relocated, it’s best to stay across the cost of living in Portugal, so you can budget accordingly and enjoy life to the maximum in this gorgeous European country.
Is the cost of living in Portugal affordable?
First things first…it’s important to understand that the cost of living in Portugal depends on your income, financial situation, and spending habits. Generally speaking, yes, Portugal is one of the most affordable countries in Europe to live in. Just about everything— from groceries to accommodation— is cheap compared to other European nations. For example, living in Portugal is roughly 30.87% lower than in France. Meanwhile, it’s 24.98% cheaper to live in Portugal than in Germany.
How much can I live off on per month?
A couple with a solid, mid-range income can live comfortably in Portugal’s interior cities for around €1,700 per month. While a couple starting out in Lisbon can live from $2,000 onwards a month. If you’re a singleton, then you could easily get by with €1,200 per month in Lisbon or Porto, and even less in Portugal’s quieter towns.
If you fall in the higher income bracket, then you’ll be pleased to hear you can easily live anywhere in the country from €3K a month, with a vast range of premium luxury activities and property for sale on offer.
Cost of living in Portugal: Property
Buying a property
Your cost of living in Portugal will be considerable if you decide to buy a property in Portugal. This is especially if you opt to enlist the help of a professional buyers agent like Goldcrest for your property purchase.
This is even more so the case if you decide to pursue a Portugal’s Golden Visa, and apply for legal residency via purchasing a qualifying property in the country.
Despite these extra costs to consider, the good news is, Portugal’s real estate market is stable, with signs of growth. This means that if you invest in a good property in a good area, chances are you’ll get a solid return on your investment, with even the chance to turn in a profit.
On average, a two-bedroomed property in the Algarve or Lisbon will cost somewhere in the region of €105,000–€180,000. The average cost per square meter is €1,150. Of course, this number fluctuates, depending on what property you go for. If you need more guidance on the costs involved in purchasing a property in Portugal, check out our guide to buying a property in Portugal here.
Buying a property in Portugal is a great investment. The country’s property market is showing signs of stable growth and has recovered well after the financial crisis of 2012. Happily, there are no restrictions on foreigners buying properties in Portugal and you may even be eligible for a ‘golden visa’ if you meet the real estate investment criteria under the program. At present, mortgage rates for foreigners in Portugal are at historical lows and interest rates for prime borrowers are usually between 3.25% and 5.25%, depending on the conditions of the loan.
If you’re not looking to buy just yet, renting in Portugal is a smart, economical option. With the average rent being about 46% higher in the UK than in Portugal, you could be saving some serious money while enjoying a sunnier climate. To give you some idea of how rent prices compare, a one-bedroom flat in the center of Lisbon costs just €670 per month, while a similar property in London would be double this price at the very least. In Portugal’s interior towns, you can easily snap up a property for rent at just €350.
Other costs of living in Portugal to consider
If you are a tax resident, your worldwide income is subject to Portuguese income tax. This could include salary, rental income, and capital gains. If you aren’t a registered resident in Portugal, only income earned in Portugal will be liable for tax, which is typically 23%.
When buying a property, you need to be aware of Portugal’s property tax. Called transfer tax, it ranges from 1-8%, depending on the purchasing price and whether it’s your first or second home in the country. Extra stamp duty of 0.8% is also payable on a purchase. Other things to note is that a wealth tax exits, and it may affect you if you’re the sole purchaser and your property is worth over €600,000.
One last thing worth noting is that Portugal’s Non-Habitual Residency tax scheme enables individuals who register as tax residents in Portugal and have NHR status, to enjoy income-tax-free both in Portugal and in the country of source of the income. Find out more about how to apply for NHR status by checking out our guide to the NHR Portugal Tax regime here.
It’s great that property and renting is so affordable in Portugal, but what about all of the extras that can add up? Fortunately, the cost of living in Portugal is considerably lower than in other countries. A monthly bill for an 85m² apartment, including water, electricity, heating, and rubbish collection is around €90, while the same bill in let’s say the UK, for example, is €160. Your mobile phone plan in Portugal won’t go over the €25 per month mark, and that’s including a solid mobile data plan.
Portugal has so much to offer, from stunning beaches and cities full of culture to picturesque towns and incredible food and wine. You’ll want to explore it all, and luckily travel is fairly inexpensive in and around Portugal. A monthly bus pass costs just €40. Petrol is marginally more expensive in Portugal at €1.50 a liter, but a new car is around €5,000 cheaper compared to many other European countries.
Portugal is well-known for its incredible food and wine, with a focus on delicious seafood fresh off the boat. High-quality food comes as a standard, without the premium price tag that usually accompanies in other countries like France. You can enjoy a solid meal in Portugal for around €20, and can easily eat out a couple of times per week. Popping out for a drink or two is also very affordable and sociable, with a glass of wine averaging about €3 and a beer just under €1. Drinks, anyone?
When you’re not discovering your favorite new restaurants, you’ll need some basic essentials at home. Expect to pay around €1.2 for a loaf of bread, €3 for a 1litre bottle of freshly squeezed orange juice, and €1.5 for a bottle of red wine. Generally speaking, everyday essentials are very affordable in Portugal.
Gym memberships cheap in Portugal, averaging €25 a month for a basic plan and easily racking up to €150 in the more premium branded gyms. If you’re a cinema fan, you’ll be glad to know that tickets are drastically cheap in Portugal, at €4. If you’re not yet fluent in Portuguese don’t panic, as English-language films are usually shown in the original language with Portuguese subtitles.
If you’ve got kids to think about, remember that public schools are free but lessons are taught in Portuguese. If you’d like to send your children to an English-speaking international school, fees are around €7,500 a year.
Private health insurance for foreigners in Portugal is quite cheap. This could cost between €20 and €50 a month, depending on your age and the extent of your coverage. This means you can pay anywhere between €400 EUR a year for a basic plan and €1,000 yearly for a more well-rounded coverage.