Portugal has long been marketed as a cheap place to live, or somewhere with a low cost of living, but is that really the case?
Yes and no. In Portugal, it’s possible to find a 3-course lunch menu for €10 or less (sometimes with wine and coffee included) but when it comes to other costs like cars (new and second-hand), electricity, fuel, and toiletries, Portugal is more expensive than many other European countries.
Many people who visit Portugal as tourists only encounter costs like food and drink. If you buy a good bottle of wine for less than €5 and eat out for less than €10, it’s easy to assume that everything in Portugal must be cheap. Similarly, if you read that Portugal’s minimum wage is low – around €760 per month in 2023 – it’s easy to assume that it’s possible to live there on that amount. In reality, it would be extremely difficult. You wouldn’t be able to afford your own property and after basic essentials like groceries, would have very little money, if any, left over.
It also depends where you’re coming from. A lot of the articles that describe Portugal as “cheap” are aimed at Americans looking to move from cities like New York or San Francisco where monthly rents of $4,000 are considered normal. The concept of a “free” public healthcare is also a huge selling point to many Americans, whereas this would be considered standard to most Europeans.
However, even though rental prices in places like Lisbon are on par with many other European capital cities, the quality of life you can get in Portugal is better in many ways due to the good weather, good food, and laid-back lifestyle. And while Lisbon is now quite an expensive place to rent and buy (and Porto and the Algarve are in high demand as well) it is possible to live very affordably if you opt for other parts of the country, particularly rural inland parts.
All of that aside, Portugal can be a very affordable place to live, particularly if you already own your own property and have simple tastes. The joys of living in Portugal are enjoying the sunshine, drinking coffee on a terrace, or visiting one of the country’s many beautiful beaches — all very inexpensive pleasures. If that sounds like the type of lifestyle you would enjoy, Portugal could be a place where you could have a lower cost of living.
Rather than relying on what it costs someone else to live in Portugal, the trick is to estimate how much it will cost you to live in Portugal – and then maybe add at least 20% as most people tend to underestimate these costs.
The biggest cost for most people is property, whether that’s buying or renting a place. There is a huge demand for property at the moment and finding a bargain property seems harder than ever.
In Lisbon, expect to pay:
- €400 for a room
- €1,000-1,500 for a 1-bedroom apartment
You can get an estimate of rental and purchase prices by browsing the listings on Idealista to see what’s available in the areas you’re considering. If buying, don’t forget to factor in an average of 6-8% additional purchasing costs.
Electricity & Gas
Utilities, and especially electricity, can be expensive. For a 1-bedroom apartment, expect to pay around €60 for electricity and €20 for gas.
Many homes don’t have central heating and rely on space heaters or the air con units to keep the property warm in winter. It’s very easy to double or even treble your utility bill doing this.
The cost of water varies considerably from region to region. At the cheaper end of the scale, a one-bedroom apartment in Lisbon might pay around €15 per month for water.
Expect to pay between €39 (200mb) and €49 (1000mb) for home internet on a 2-year contract. In Portugal, it’s common to include your mobile phone on the same contract (and often family members’ mobile phones) as well as your TV in order to get the best possible deal.
If you get a prepaid or PAYG sim card, expect to pay around €20 per month.
Food & Drink
Food and drink is generally very affordable in Portugal. A single person should expect to pay around €250-350 per month on groceries. Wine is very affordable: a good bottle of wine costs around €3-7 at the supermarket.
A litre of milk (half fat UHT)
Green Pepper (individual)
Store Brand Chopped Tomatoes
6 Large Eggs
Heinz Top Down Ketchup 460gm
Self Raising White Flour 1 kg
Store Brand Olive Oil 1 Litre
Chicken Breast (price per kg)
Kellog’s Corn Flakes 500 G
Store Brand Salted Butter 250 g
Store Brand Crunchy Peanut Butter (price per kg)
Tinned Kidney Beans 400 gm
If you really want to be accurate, take your weekly grocery shop and put it into the online shopping cart at a Portuguese supermarket like Continente. German discount supermarkets Lidl and Aldi are typically cheaper than Portuguese supermarkets like Pingo Doce and Continente.
Eating out is also very affordable, particularly if you eat at traditional Portuguese restaurants: the prices go up if you opt for more modern, international restaurants, particularly in places like Lisbon, Porto, and the Algarve.
A beer or glass of wine can cost anywhere from €1 to €5 and up, depending on the type of bar.
A traditional espresso (café) from a pastelaria can cost as little as €0.50 in a rural location, but will probably be closer to €0.80 in a city. If you order an espresso from a more modern or hipster café, expect to pay around €2.
Residents in Portugal are normally taxed on their worldwide income at progressive rates varying from 14.5% to 48%. Under the NHR regime, there is normally a flat rate of tax e.g.
- 10% for pensions
- 20% for income from high-value activities + social security.
Public transport is extremely affordable in Portugal. As an example, a return train ticket for the 3-hour journey from Lisbon to Faro in the Algarve could cost as little as €20, when booked in advance. You can estimate train ticket prices on cp.pt.
Bus tickets are similarly affordable, and you can find even cheaper tickets on long distance coaches through companies like FlixBus.pt.
If you live in Lisbon or Porto, you may rely on public transport a lot and it might be worth looking into a monthly pass. In Lisbon, this costs around €40 per month. In Porto, the cost is similar: €30 for a Z3 pass or €40 for a Metropolitano pass.
Taxis & Ubers
Taxis and Ubers (or other taxi apps like Bolt) are very affordable in Portugal.
- An Uber from Lisbon Airport to Praça do Comércio in the city centre costs around €8.60 (11.6 km or 7.2 miles)
- An Uber from Faro Airport to Albufeira costs around €26.40 (46.5 km or 28.9 miles)
- An Uber from Porto to Braga costs around €38.79 (54.5 km or 33.9 miles)
Cars, including second-hand cars, are more expensive than many other European countries, and more expensive than the US. You can estimate prices by looking at StandVirtual, the Portuguese equivalent of AutoTrader, and comparing the prices to the same car in your country. To estimate fuel prices, take a look at https://precoscombustiveis.dgeg.gov.pt.
Portugal’s healthcare system consists of two systems: the main public healthcare system and a smaller private system.
Public healthcare is virtually free. In many cases there is no charge, but sometimes there are small concessional fees (€5 to visit a doctor, for example).
Private healthcare isn’t free and you may spend between €50-90 to visit a doctor or specialist and obviously more for any kind of surgery or treatment. This can be paid out of pocket or you can take out a private health insurance policy which will reduce the amount you have to pay.
Health insurance costs naturally vary depending on factors like age and pre-existing conditions and the only way to get a proper estimate is to speak to a broker. However, €100 per month is a good average.
The cost of schooling for children varies in Portugal depending on whether you opt to send your child to a public tax-funded school or a private or international school.
- State schools are typically free, with some costs for food, school trips, activities, and stationary.
- Portuguese private schools charge a fee, but at around €500 per month it’s lower than what international schools charge.
- International schools are the most expensive option at around €1,000-1,5000 per month on average.