An Expat Guide to the Cost of Living in Portugal

Anyone who’s travelled a lot or lived abroad knows just how wide the gap between expectation and reality can be.

Portugal is a case in point.

While prices in Portugal are still fairly affordable compared to most of the United States and parts of Europe, things are changing. Rising demand, changing immigration rules, and inflation are all reshaping the landscape.

Still, for those drawn to Portugal – whether that means soaking up the atmosphere in Lisbon or the sun in the Algarve – there are plenty of visa options available.

For anyone with their sights set on an even bigger goal, Portuguese citizenship is attainable and comes with one of the world’s most powerful passports, granting access to 176 countries.

Whatever your goal – residency, lifestyle upgrade, or a second passport – understanding the real cost of living is crucial.

To that end, the Nomad Capitalist team has put together a comprehensive breakdown of the cost of living in Portugal, from housing and food to healthcare and transportation.

When you’re ready to talk about the most effective pathways to residency and citizenship in one of Europe’s most vibrant countries, feel free to drop us a line.

Portugal Cost of Living: Overview

Portugal is celebrated for its relative affordability compared to other nations in Western Europe.

Although house prices in major urban centres such as Lisbon and Porto have risen in recent years, Portugal still offers a low cost of living, with average rental prices around 40% lower than in the US and the United Kingdom. 

Day-to-day life reflects this too. In Lisbon, for example, you can still enjoy a satisfying meal for as little as €20.

Portugal presents a remarkable opportunity to enjoy an affordable lifestyle that extends to nearly every aspect of life.

Portugal Cost of Living: Renting and Buying Property

The first and most significant expense in any budget is accommodation, whether you are renting or buying.

Many dream of finding spacious, tile-adorned Lisbon flats for far less than they would pay elsewhere. 

While that can be true, it’s also wise to set realistic expectations. 

Property prices in Portugal’s most sought-after locations can align closely with other popular Western European destinations.

The much-loved Portuguese Golden Visa has axed the investment option to purchase real estate, due in part to the country’s ongoing housing crisis. 

Despite such market shifts, Portugal is still an appealing prospect for housing, especially when you compare its rental and purchase prices to those in countries like the United States. 

However, like any Western nation, costs vary greatly depending on location. 

Here’s a quick overview of housing costs in Portugal’s major cities:

Lisbon Average Prices

Portugal’s capital, Lisbon, typically has the highest property costs:

• Rent: €1,400 for a one-bedroom apartment in the city 
• Buying: €6,424/sqm.

Porto Average Prices

Known for its historic charm and rich culture, Portugal’s second city has more affordable housing options:

• Rent: €1,020 for a one-bedroom apartment in the city 
• Buying: €3,968/sqm.

Faro: Average Prices

Serving as the main city in the Algarve region, Faro offers a blend of urban living and easy access to the coast:

• Rent: €983
• Buying: Faro: €3,216/sqm.

Portugal Cost of Living: Utility Costs

Once you’ve found somewhere to live, the everyday costs of keeping your home warm, well-lit and connected come into focus. You’ll generally find that essentials like electricity, water and internet in Portugal are quite reasonably priced.

Many find these costs noticeably lower than in the United States, the UK or several northern European countries. 

However, this can vary depending on where you live and the time of the year. 

Although Portugal does have a mild climate year-round, the winter months up north are cold and wet, with daytime temperatures ranging from 10°C to 15°C (50°F to 59°F). 

As such, winter heating costs can quickly add up.

The average utility costs are:

• Electricity, heating, water and bins: average around €115 per month 
• High speed internet: between €30 to €50 per month
• Mobile data: €18 per month.

These expenses will vary depending on household size and usage.

Portugal Cost of Living: Food

For the most part, groceries in Portugal are affordable, especially locally produced fresh fruit, vegetables, meat and fish. While, imported goods can be surprisingly expensive.

Some basic food prices you can expect:

• Milk 1 litre €0.94
• Loaf of fresh bread €1.38 
• Eggs x12 €2.68
• Water 1.5 litre €0.69
• Bottle of wine €4.99
• Domestic beer €1.11

Known for its wine and cafe culture, you can still enjoy these small indulgences for just a few euros.

If you want to truly enjoy life in Portugal and experience its culture to the full, dining out and trying local foods like Pastel de Nata (custard tart) or Bacalhau à Brás (salted cod) is a must.

While dining out is affordable, the prices at trendy restaurants in Porto and Lisbon are going to be a lot higher and more comparable to other major cities in Europe.

Portugal Cost of Living: Healthcare Costs

Healthcare costs are a significant factor for expats and retirees looking to secure residence in Portugal, as it is mandatory to secure sufficient healthcare coverage to qualify for visas and work permits.

Many opt for comprehensive international insurance plans that cover private facilities, both in Portugal and worldwide.

Portugal provides both private and public healthcare options, offering competitive prices:

• Basic medical care: Generally low-cost, determined by specific services
• Private health insurance: Plans range from €40 to €500 per individual
• Public healthcare: Fees differ according to the nature of services received.

You don’t need to be a citizen to benefit from the public health system, as this health service is available to all residents. 

Portugal Cost of Living: Transportation

Public transport in Portugal is generally considered reliable, affordable and safe. There is a national transport network that includes buses, trains, trams, and old-school funiculars.

Portugal has three major airports, Lisbon (LIS), Faro (FAO) and Porto (OPO), with reliable connections to major cities and international destinations.

The country’s smaller towns and villages are a little harder to get to and usually have fewer services. If you decide to go rural, you may want to budget extra for a car. 

Here is just a snapshot of what you can expect in transport costs in Portugal:

• A standard monthly pass for the bus: €30.00 – €40.00
• Taxis base fare: €3.00 to €4.50 (€0.47 per kilometer)
• Tram ticket Lisbon: €3.10
• Train from Porto to Lisbon: €11 – €55
• Train from Lisbon to Faro: €18 – €26
• Domestic airline ticket: Example – Lisbon to Madeira between €100 and €250 return.

Cost of Living in Portugal vs the United States

Living in Portugal is 40% lower on average than in the US. For instance, Lisbon’s cost of living is roughly 23% lower than Austin’s, with rent prices about 34% less and restaurant costs 29% lower.

Housing costs show a similar trend, with rent in Portugal being around 70% less than in the US. A one-bedroom apartment in Lisbon averages €1,400 (US$1,500), whereas in New York City, it costs over €3,700 (US$4,000). 

When buying property, a square meter in Lisbon costs around €6,000 compared to €17,000 in New York.

Daily expenses are also lower in Portugal, with groceries and dining out over 40% cheaper. 

A three-course meal for two at a mid-range restaurant in Portugal is about €35 (US$39), while the same meal in the US could reach US$70. 

Even getting around costs less. A monthly public transport pass in Lisbon is about €30 (roughly US$32), a stark difference from New York City’s US$132 travel pass.

See our guide for a full breakdown of living in Portugal versus the US.

Taxes in Portugal

Getting to grips with local tax obligations is the next logical step in any relocation plan, and Portugal has a few key aspects to consider. 

If you spend over 183 days in the country or make it your main home, you become a tax resident, which means you’re taxed on your worldwide income.

The tax rates start at 13% and can go up to 48% for earnings over €83,700, with an additional tax for high earners. Some relief is available through deductions for health and education costs.

A once tax-efficient program for foreigners, the Non-Habitual Resident (NHR) scheme finished for new applicants at the end of 2023. 

Its successor, NHR 2.0 or IFICI, offers a 20% flat tax on some Portuguese professional income but has very strict eligibility conditions, meaning it is unlikely to suit most new expats.

How to Get Residency in Portugal

There are several ways to get a residence permit in Portugal. When weighing up which visa route to take, the cost and income requirements can vary. 

D7 Visa

The most well-known visa among the expat community, the D7 Visa is designed for people who can support themselves through stable income streams, generally passive income or pensions, generated outside Portugal. 

The income in question has to come in the form of pensions, rental income, dividends or royalties.

To qualify in 2025, applicants must demonstrate a passive income of at least four times the national minimum wage, which is currently set at €870 per month for individuals. 

In addition to showing a reliable income source, applicants need to provide evidence of accommodation in Portugal, such as a rental agreement, proof of private health insurance that covers their stay, and, importantly, a clear criminal record. 

Securing the initial D7 visa grants entry into Portugal. After arriving, individuals can then apply for a renewable residence permit.

Portugal Digital Nomad Visa

The popular Portugal D8 visa, also known as the digital nomad visa, is designed for remote workers and freelancers earning income from outside the country. 

Key requirements include:

• Non-EU/EEA or Swiss citizenship
• Valid passport and travel authorisations
• Employment or service contract with an overseas entity
• Minimum income of €3,480 per month
• Comprehensive health insurance
• Proof of accommodation
• Clean criminal background check
• Minimum stay of 183 days per year.

As of 2025, the minimum income requirement for digital nomad applicants is €3,480 per month after taxes, an additional income of €435 per month for dependent adults and €261 for minors.

Upon arrival, applicants must register for a Portuguese tax number and may need to open a local bank account. The D8 Visa offers either a temporary visa (up to one year) or a longer residency visa, which can lead to permanent residency and potential citizenship.

Portugal Golden Visa

The Portugal golden visa program has traditionally attracted high-net-worth individuals.

Despite the removal of the real estate option, several investment options remain, including:

• Investing €500,000 in a Portuguese company that creates jobs
• Investing at least €500,000 in approved investment funds outside the real estate market
• Contributing €500,000 to qualifying research and development projects in Portugal
• Making a donation of €250,000 to approved arts, cultural or heritage initiatives.

Citizenship in Portugal

Although an investment in a residence permit doesn’t guarantee citizenship, it puts you on a path to it, with one of Europe’s shortest naturalisation timelines at five years.

While awaiting citizenship, your residency visa permits visa-free travel within the Schengen Area and boosts your visa applications to other countries. 

Holding a Portugal residency also allows you to work legally in Portugal and live in any EU/EEA country.

Cost of Living in Portugal in 2025: FAQs

Should You Consider Living in Portugal?

If you’re looking for straightforward EU residency, a path to a top-tier passport in five years and a relatively affordable cost of living in a safe, well-connected EU country, Portugal deserves serious consideration.

That said, despite all its charms, Portugal isn’t a one-size-fits-all solution.

Standard tax rates for residents are now undeniably high, unless you qualify for the limited scope of the new NHR 2.0 scheme, your global income could be heavily impacted.

If your priorities lean more towards tax efficiency and a lower cost of living, then perhaps low or zero-income-tax jurisdictions like Malta or the UAE may be a better fit. 

The point is that you have options – a whole world of them, in fact and at Nomad Capitalist, we don’t believe in following the herd. 

If you’re ready to move beyond generic advice and build a plan for freedom and prosperity, get in touch today.