Cost of Living in Portugal: From Groceries to Taxes

Portugal is among the most affordable European countries. This makes it appealing to budget-conscious expats who wish to reduce their living costs, but also to affluent individuals who want to allocate more of their finances to wealth growth.

In this guide, we’ll outline the cost of living in Portugal to show you precisely why relocation may be a financially sound decision. We’ll cover:

• Housing costs and everyday expenses
• Utilities and monthly bills
• Healthcare and education costs
• Most notable taxes

Overview: Cost of Living in Portugal vs. the USA

Average Cost of Living in Portugal by Category

To cover as many expenses as possible, we broke down Portugal’s average living costs into five categories:

1. Housing
2. Monthly utilities
3. Groceries and restaurants
4. Transportation
5. Healthcare and education

Housing

The housing costs mainly depend on the area to which you’re moving, although both renting and buying should be more affordable than in the U.S. The following table outlines the costs for some of Portugal’s main cities:

City	Average Cost of Renting (per Month)	Average Cost of Buying
Lisbon	€1,400 (one-bedroom apt.)	€6,424/sqm
Porto	€1,020	€3,968/sqm
Faro	€983	€3,216/sqm

Portugal is currently facing a considerable housing crisis, which drives property costs up. They’re on par with many European countries, especially in highly sought-after areas. Whether you’re renting or buying, perform diligent research to get a feel of the market and avoid overpaying.

Monthly Utilities

Day-to-day utilities and services in Portugal are quite affordable compared to the U.S., so you shouldn’t expect to spend much more than €140–€200 per month for the essentials. Here’s a quick breakdown of the related costs:

Utility	Cost (Monthly)
Electricity	€40–€80
Water	€15–€30
Fiber internet + cable	≈ €35
Cell phone plan (calls, texts, and 10GB+ data)	≈ €18

If you need any household help, you can find reasonably priced services. A typical household help service (e.g., four hours/week) might cost around €115, so it shouldn’t considerably burden your budget.

Groceries and Restaurants

Besides being quite affordable overall, many groceries in Portugal are notably cheaper than in the U.S., as outlined in the following table:

Product	Cost in Portugal	Cost in the U.S.
White bread (500g)	≈ €1.4	≈ €3.1
Apples (1kg)	≈ €2	≈ €4.6
Cheese (1kg)	≈ €12.5	≈ €14
Chicken fillet (1kg)	≈ €6.7	≈ €10.6
Mid-range wine	≈ €5	≈ €13

The main area of savings lies in fresh produce, which is considerably more affordable in Portugal. Meanwhile, the cost of some products like milk is largely the same (≈ €0.9).

Portugal offers countless options for eating out, so the costs can vary significantly. Still, some averages are as follows:

Item	Cost
One meal in a low-cost restaurant	≈ €11
Three-course meal for two in a mid-range restaurant	≈ €45
Domestic beer (0.5l)	≈ €2.5
Cappuccino	≈ €1.8
Water (0.33l)	≈ €1.2

Transportation

Your transportation costs mainly depend on whether you’ll own a vehicle or leverage Portugal’s public transportation network. The latter option is particularly appealing to budget-focused individuals because Portugal has a well-developed and affordable public transportation system. Some of the key costs include:

Item	Cost
Monthly public transit pass	≈ €40 per person (with family options)
Metro or bus ride	€1.35–€1.85
Base taxi fare	≈ €3.5 (in Lisbon)

If you plan on buying a car, you should expect prices that don’t differ significantly from those in the U.S. For instance, a new compact car (e.g., VW Golf) costs around €30,000, while renting can range between €10 and €100+ per day, depending on your chosen model.

Gas prices are a notable consideration, seeing as they’re much higher in Portugal than in the U.S. because of the European fuel taxes. You should expect to pay around €1.75 per liter, compared to around €0.9 in the U.S.

Healthcare and Education

Healthcare costs are orders of magnitude lower in Portugal than in the U.S. Portugal has an outstanding public healthcare system, so you should expect high standards of care at a fraction of the U.S. cost.

Children and seniors receive free public healthcare, while adults only pay small contributions. For example, a visit to the ER might only cost €15–€20 out of pocket, compared to potentially hundreds of dollars in the U.S.

All legal residents (including expats) can use Portugal’s national health service (SNS), which provides access to healthcare facilities, services, and medications with little to no co-payments. Prescription medications are heavily subsidized, so you can get them at minimal prices.

A perfect example is insulin, which has been a topic of debate in the U.S. for several years now due to the astronomical cost of around $98 per vial. Meanwhile, you can get an insulin vial in Portugal for as little as $8.

Portugal also has a free public school system, but many expats decide to enroll their children in private international schools. If you do so, your child can get a high-quality primary or high school education for as little as €400–€500. Of course, there are more prestigious options, which can cost upwards of €28,000.

Portugal Taxes: How Much Should You Expect To Pay?

You will generally be considered a Portuguese tax resident and expected to pay all the related annual obligations if you:

• Spend more than 183 days within a 12-month period overlapping with the fiscal year in Portugal 
• Maintain a habitual residence in the country with the intention to keep it and use it as a primary residence (regardless of whether you stay less than 183 days in Portugal)

The most notable taxes to keep in mind include:

Tax	Rate
Personal income tax (IRS)	Progressive 12.5%–48% depending on your income, plus a solidarity surcharge of 2.5%–5% if your income exceeds €80,000 annually
Property tax (IMI)	0.3%–0.45% in urban areas, 0.8% in rural areas
Social security contributions	11% for employees and 23.75% for employers
Corporate income tax (IRC)	21% in mainland Portugal, 20% in Madeira

Portuguese tax residents are taxed on worldwide income, which may be cumbersome for wealthy individuals, investors, and business owners. Luckily, there are several mechanisms to optimize your tax burden, most notably:

• Portugal’s IFICI program
• Double tax treaties with various countries
• Exemptions and exclusions (e.g., FEIE in the U.S.)

Legally reducing your tax obligations may be challenging without adequate guidance, which is why many expats consult financial advisors to avoid overpaying.

How Much Money Do You Need To Move to Portugal?

In addition to the cost of living, you should consider relocation expenses to plan your budget properly. The main cost driver is the mechanism under which you’re relocating, particularly your visa type.

For instance, the application fee for a D7 passive income visa is only €110, while the Golden Visa that provides residency by investment may cost between €250,000 and €500,000.

Regardless of your visa, you should factor in the general relocation costs, which may include:

Item	Cost
Sea freight (20-ft)	$1,700–$3,800
Door-to-door movers (packing, delivery)	+15%–30% on freight
Pets (vet, docs, airline)	$300–$1,000+ per pet

Defining a specific budget requires plenty of research and various calculations. It’s often too time-consuming and complicated to do alone, especially because the cost is only a small aspect of your overall relocation plan. You must consider numerous additional factors, such as:

• Residency and citizenship requirements
• Business and investment planning
• Wealth preservation and future growth

To get a custom, all-encompassing strategy that covers all the relevant aspects down to the finest details, reach out to Nomad Capitalist.

Plan Your Relocation to Portugal Effortlessly With Nomad Capitalist

Nomad Capitalist is an advisory firm that helps high-net-worth individuals relocate across the globe without guesswork and administrative or legal complications. We provide personalized, 360-degree relocation strategies built on your unique circumstances, as well as financial and lifestyle goals.

If you need a ready-made strategy for relocating to Portugal, our Action Plan can provide it. All you need to do is fill out a simple questionnaire to determine if we’re a good fit, and we will:

1. Analyze your current situation and relocation goals through a strategy call
2. Prepare the Action Plan together with all the necessary documentation, steps, and guidance
3. Present and implement the Action Plan over a 12-month period
4. Provide lifetime support for any future changes and updates

While implementing the Action plan, we will handle all the administrative work related to your relocation by liaising with the Portuguese government, ensuring that the process is completed as effortlessly as possible on your end.