Portugal has undeniably been in the international spotlight for many years, but even so, the country, somehow, is still an underrated gem tucked away in the westernmost corner of continental Europe.
While the majority may think of Europe and associate it with France, Germany, and the United Kingdom, those who choose Portugal know the country is an absolute haven for expats and high net-worth individuals.
There are countless reasons why Portugal continues to be chosen as a second residency destination. Some of these include safety, sunny weather, clean air quality, friendly people and culture, the perfect environment to raise a family thanks to excellent international schools and highly esteemed and affordable universities, and some of Europe’s best Residency by Investment programmes with the D2 Visa and the Golden Visa.
However, Portugal’s main attractive selling point is its cost of living. The country is one of Western Europe’s most affordable countries, revealing it truly is possible to have it all in a single location. When one knows about this, it becomes easier to understand why Portugal is so sought-after and a popular trend across expats & investors.
Cost of Living in Portugal vs Other Countries
The cost of living is considerably lower in Portugal in comparison to several other countries. On average, the prices of essential goods and services in Portugal are lower, whether food, groceries, domestic bills, medical care, childcare, education, etc. Fundamentally, the cost of all the across-the-board basics to have a fulfilling, satisfying life is lower in Portugal. Despite this, Portugal follows the European trend and provides high standards across all aspects of quality of life to all its citizens and residents.
According to Expatistan, an open-sourced international cost of living index ranks Portugal as the 30th Most Affordable Country. With the first position occupied by Switzerland as the most expensive country in the list, Portugal is virtually in the middle of the table, far behind countries like France, the United Kingdom, Germany, and the United States.
This data is further corroborated by Eurostat’s, the European Union’s official statistical research branch, own findings. Even though the information reflects back to 2022, it does provide a broader understanding of just how affordable truly Portugal is. According to Eurostat, Portugal is far below the average in terms of consumer goods and services price levels. Whereas the costs are significantly higher in Denmark, out of the EU countries, where the Danish average was 49% above the EU average, Portugal sits comfortably behind, being 12% below the EU average.
Find out the cost of living for each expense category:
Even though Portuguese cuisine may not be as internationally known as Italian or Japanese, Portugal has some of the world’s tastiest dishes, and Taste Atlas even recognises Portuguese cuisine as the 4th best in the world, just behind Italian, Japanese, and Greek.
The wine culture in Portugal is also extremely prevalent, exemplified in the best manner by the legendary sweet Port wine, from the city of Porto, Portugal’s second-largest city. Madeira wine, though not as sweet, is a staple of the Portuguese wine culture, and it was the wine of choice of the United States Founding Fathers, who used it when toasting to signing of the Declaration of Independence.
Despite these cultural and gastronomic landmarks, which have made an impact on not only Portugal but also the world, food and drinks in Portugal are not expensive. Continue reading to find out more about the specifics…
Groceries
In Portugal, there is a term often heard; the “cabaz alimentar essencial”. Literally translated to the “essential food basket,” it is used to describe about 63 food products considered fundamental for a typical and varied Portuguese diet. When the term is applied, it is usually in reference to the pricing of the 63 food products. It does not necessarily mean a person would purchase all these products at once in the basket, but it serves to rather to give an idea of how much a person can expect to spend when purchasing these items.
The 63 food products include: various meats, including beef, pork, and chicken; various fishes, including codfish, salmon, bream fish, sea bass, and fresh fish; frozen foods, including ultra-frozen peas, fish fingers; fruits and vegetables, including oranges, apples, bananas, tomatoes, lettuce, broccoli, carrots; dairy products, including cheeses, milk, butter, and yogurts; and other miscellaneous products, like olive oil, spaghetti, flour, cereals, salt, sugar, bread, etc.
Besides local grocery shops, the main supermarkets in Portugal are Portuguese retailers Continente and Pingo Doce, German supermarket stores Lidl and Aldi, French shops Auchan and Intermarché, and Spanish-based Mercadona has also been recently making significant strides in Portugal. The 63 essential food products can be found in any of these supermarkets.
DecoProteste, Portugal’s consumer protection agency, in its latest update of March 2024, places the basket’s average price to be around €238,36, which is roughly USD $260,00, or around £203,00 per month. The agency took into consideration several prices from the supermarkets available in Portugal and calculated the average price of the food products in the essential food basket.
In comparison, Statista, a reputable statistical research and investigation, puts the “basic” food basket price at USD $210,00 as of January 2023, an amount which has likely increased since. Overall, the difference is strikingly negligible, and economic inflation plus the ongoing crisis in Ukraine are the main reasons behind the current food basket pricing in Portugal, but the country more than makes up for it in other sectors, including medical care, childcare, education, and domestic bills, among others.
Restaurants
Restaurant prices in Portugal are far more subjective and more dependent on location, type of restaurant, and quality of food than anything else. A sit-down restaurant in the Lisbon city centre will naturally be more expensive than in a city like Santarém or Leiria. Generally speaking, Lisbon prices will be more expensive than in the rest of the country.
Taking the prices in Lisbon to paint a broader picture of the country, Portugal Homes resorts to Numbeo, another crowd-sourced global database, which gathers data on several quality-of-life indicators, including the cost of living, and Portugal Homes’ own experience. Numbeo has the particularity of selecting specific cities’ cost of living and enabling to verify the cost surrounding the costs of meals at restaurants.
Beyond Lisbon, and in Portuguese regions other than Porto and the Algarve during the summer, the prices can be considerably more affordable. It is not uncommon to find restaurants where, for instance, a glass of house wine at around €3,00. In comparison, Portugal is decidedly cheaper than other European countries like France and Italy in terms of eating out at restaurants.
The Portuguese Real Estate market has become a fundamental pillar of the Portuguese economy in the last decade. As Portugal completely changed its international image in the last decade, and people began to take a closer at the country, interest in purchasing Portuguese property grew. The Portugal Golden Visa was fundamental in this industry’s overhaul. Introduced in 2012, this Residency by Investment programme was responsible for bringing over €7,3 billion to the economy between its inception and September 2023, which is the latest data available.
The Portugal Golden Visa Real Estate option was responsible for almost 90% of this amount, representing a staggering €6,45 billion injected into the Portuguese economy. In 2023, the government discontinued the option, in an attempt to alleviate the pressure of housing rental costs. Despite the effort, it seems to have produced no actual effect, as the property prices in Portugal continue to increase. If anything, this only reveals the Real Estate sector’s resilience and its growth is unstoppable, proving to be an excellent investment opportunity in Portugal. The city of Lisbon, Portugal’s capital, has even been classified in the Top 10 for Real Estate investments in Europe.
Read more on Portuguese Real Estate Market:
The Portuguese Real Estate Market in 2024
Lisbon Property Prices On The Rise Despite The Golden Visa End In Real Estate
Lisbon is Among the Best for Real Estate Investments in Europe
Investing in Portugal Real Estate
Rental Costs
The Portuguese Real Estate industry’s resilience reflects on the rental costs. Broadly speaking, the more the countryside a property is located, the more affordable it is, and the closer to Lisbon, the more expensive the rental cost will be.
According to the latest data provided by Statistics Portugal (INE – National Institute for Statistics), published in March 2024, the national median price for new rentals in Portugal was €7,21 per square metre. During 2023’s 4th semester, which this report analyses in-depth, refers a slight increase to €7,71 per square metre.
This data analysed 23,637 new rentals to conclude this finding and gives an idea of what to expect in 2024 and beyond. This represents a growth of 6,6% in comparison to the previous trimester, revealing the skyward trajectory housing rental costs Portugal is witnessing.
The regions of Greater Lisbon (€12,54/m2), Setúbal (€9,65/m2), Madeira (€9,30/m2), Algarve (€9,09/m2 each), and Porto (€8,64/m2) were all more expensive than the national median price for new rentals.
Property Prices
The prosperity the Real Estate sector is currently experiencing also applies to property prices. The interest in Portugal and all the country has to offer is at an all-time high, and following the rules of supply and demand, the property prices are the highest they have ever been.
According to the latest data provided by Statistics Portugal (INE – National Institute for Statistics) just recently released in April 2024, the average median price for family houses in Portugal was €1,611/m2 in 2023. During 2023’s 4th semester, which this report analysis in-depth, refers a slightly price higher, at €1,619/m2. With no great surprise, Lisbon leads the charge, registering €2,728/m2, followed by the Algarve at €2,623/m2, the Setúbal region at €1,952/m2, the Madeira Islands at €1,869 per m2, and the Greater Porto area at €1,776 per m2. The data report reveals the property prices have been steadily growing since 2022 in 23 of the 26 subregional administrative territories.
Foreign investors also represent a sizeable chunk of those interested in Portugal’s Real Estate market, specifically in the Greater Lisbon and Greater Porto areas, where each area witnessed, respectively, an increase of 65% and 69,8% of buyers with foreign-based residency.
With Lisbon, in particular, acting as Portugal’s hotspot for Real Estate investments, property prices are only set to increase in the near future. If the trend continues and grows, which is increasingly likelier, the time to invest sooner rather than later, especially as Lisbon begins to catch up with other European capitals.
Cost of Domestic Bills
When purchasing or renting a house in Portugal, one of the most important steps is setting up the utility bills. Servicing a house with essentials, including electricity, water, gas, internet, and or telephone landlines is a relatively easy and effortless process, usually taking no more than a few days to completely have the property suitable for living.
Most of these utility services are privately sourced, though supplying water to a house is a public service, of which the responsibility falls to the municipality. In Lisbon, for instance, EPAL – Empresa Portuguesa das Águas Livres, is the main water supplier. It bears in mind that, besides the cost of the water itself, the bill is mostly constituted by taxes, including sewage and water treatment. Most water supply companies will also offer the opportunity to pay either monthly or every two months, and this can also play a factor in the bill’s ultimate cost. On average, the water bill is between €15,00 to €30,00 monthly.
For every other domestic bill, the service is provided by a private company. For instance, EDP – Energias de Portugal, Endesa, Galp, Iberdrola, and Goldenergy are the biggest electricity and natural gas providers in Portugal, though there are also other alternatives available on the market. Electricity and gas services can also be acquired separately from different companies. Though properties are typically set up to receive natural gas, some people prefer to go all-electric and have water heater tanks at home and electric ovens and stoves.
Another matter to consider when setting up either gas or electricity is choosing the “free market” (mercado livre) or the “regulated market” (mercado regulado). The “free market” is the most chosen option due to a variety of reasons, including the greater variety of providers and flexible pricing, though the “regulated market” offers benefits like the same fixed price with little to no fluctuation throughout the service agreement. Typically, the electricity bill, regardless of market, runs between €30,00 for a couple with no children to €200,00 monthly for a family of 4, though the final amount will depend on the number of people in the household using energy. The same applies to natural gas providers with the numerous opportunities on the market. The gas bill will usually be between €15,00 for a childless couple and €45,00 for a family of 4.
Finally, there are 3 major telecommunication companies in Portugal: NOS, MEO, and Vodafone, though there are some alternatives like NOWO. Typically, these companies offer “basic” packaged services, including internet, television, and a landline, home telephone that tends to start at €30,00. These basic packages typically involve the lowest internet speeds, with the least amount of TV channels. Telecommunication companies will then offer other packages with increased speeds and more TV channels at higher prices. Some packages include cell, mobile, streaming services or internet data for an extra fee.
*It is important to keep in mind these prices are merely indicative for your reference. They may have increased or decreased since the time of the original research in April 2024. Portugal Homes does not support any company, nor do we advise on company selection. It is always best to research what best suits your needs.
Even though Portugal has, generally speaking, a lower cost of living than most other Western countries, the salaries typically are also lower. The minimum wage in Portugal, as of April 2024, is €820,00, roughly USD $880,00 or £703,00 per month.
The average wages, on the other hand, have a more positive outlook, especially in the private sector. According to the latest information published by Statistics Portugal (INE – National Institute of Statistics) in February 2024, the average total gross monthly earnings per employee increased by 6,6% in comparison to 2022, bringing the monthly wages up to €1.505,00.
Despite the staggering differences, the cost of living has been increasing worldwide, and Portugal, even though it remains affordable, does not have attractive salaries. In fact, Eurostat, the European Union’s statistical office, places Portuguese salaries below the EU average when it comes to purchasing power parities and GDP per capita.
In 2023, Portugal was 17% below the EU average when it comes to purchasing power parities, meaning that the Portuguese people’s purchasing power in terms of essential goods and services is admittedly low, largely in thanks to the unattractive salaries in Portugal. Expats and investors seeking to relocate and enjoy the country’s several other benefits should keep in mind that the better option remains to work remotely to another wealthier country, earn higher wages, and enjoy the Portuguese lifestyle and the lower cost of living.
Portugal has become, in recent years, many retirees’ home away from home, with expat communities found everywhere across the country, and even in more remote areas in the countryside. In 2023, the number of foreign residents reached a record number, which includes retirees, and if anything, this widespread phenomenon is indicative of how easy it is to relocate to Portugal and how affordable it is on essentials like groceries, restaurants, and domestic bills. Even property prices are accessible to retirees from wealthier countries like the United States and the United Kingdom.
For retirees seeking to enjoy their golden years in one of Europe’s sunniest countries, the largest obstacle in the path will definitely be property acquisition, not necessarily because of the cost but rather because of the process surrounding it. Purchasing property in Portugal is a thorough process with several legal requirements and navigating it can prove challenging.
Portugal Homes can assist in this journey, answer all the questions, and successfully deliver a second home in dreamy Portugal. We have properties all over the country, in Lisbon, Porto, the Algarve, the Silver Coast, and wherever else one may desire, and dedicated teams to accompany you through every step of the way, from when the first document is signed, to when the keys are finally yours, and even beyond.
At Portugal Homes, we have an After Sales team, a unique department within our company that is solely responsible for handling every issue that may arise post-purchase, and even provides other services, like Tax Representation, Property Management, and even Leisure Concierge.
Portugal has a universal and public healthcare system, the SNS - Serviço Nacional de Saúde (the National Healthcare Service), which is accessible to every taxpaying citizen and resident. The SNS guarantees primary care in the form of family doctors who typically practice in USFs (Unidades de Saúde Familiar, commonly referred to as Health Centres), and urgent care via hospitals.
While appointments in Health Centres are free of charge, a visit to the Emergency Room at a hospital may be charged with taxas moderadoras (moderation fees), which are the fees associated with the healthcare treatment. The fees depend on the treatment and service provided and vary from hospital to hospital. However, there are multiple ways of obtaining an exemption to paying the fees, like simply calling ahead to SNS24, the 24-hour open line, to obtain a referral, effectively making healthcare in Portugal free.
The downside of SNS is the long waiting periods, either for a regular primary care appointment or an urgent care Emergency Room visit. Because of this, it is always advisable to acquire private healthcare insurance, of which the prices vary depending on each specific situation but are far more affordable when in comparison to the prices practiced in countries like the United States. On average, an individual plan costs between €30,00 to €60,00. Naturally, this amount increases when considering a broader, family plan, which may rack up to €150,00 to €200,00 per month.
In Portugal, the public education system is free and compulsory between the ages of 6 and 18. Children typically enrol in a primary school’s 1st grade at 6 years of age and finish high school, in the 12th grade, at age 18. Even though Portuguese public schools are often held in high regard, they tend to exclusively teach the Portuguese curriculum and only in Portuguese. There are elective Portuguese as a Second Language classes and integration programmes, but these often tend not to be the focus.
However, there are also alternative, private options spread throughout the country. Private schools are usually more flexible and more receptive to foreign-born students, with international schools often being the preferred choice among expats and investors for children. International schools in Portugal often have classes in which the students have multiple different backgrounds, the classes follow alternative curriculums, including the IB, British, and American, and are typically taught in English.
Portugal has 55 international schools spread throughout the country. 27 of them can be found in the Lisbon area, and a family can expect to spend, on average, between €5,000 to €15,000 in yearly tuition fees, though some schools may have higher or lower fees.
Before a child starts primary school in Portugal at age 6, parents have a few options when it comes to childcare. Berçários or Infantários (nurseries) will welcome newborn children, and up to the age of 3. Kindergarten is the next level, accepting children from the ages of 3-5, though they are not mandatory, and the children can be left in the care of a nanny or a grandparent, for example.
In the same vein as the following grades in the Education system, there are both public and private options for childcare. While public childcare services are free, it is not particularly well-funded, and waiting lists are long, and parents tend to sign up their children years in advance, and there are often no vacancies.
There are institutions exclusively dedicated to providing childcare services, but some international schools offer not only compulsory grades in the Portuguese education system but also pre-school nurseries and kindergarten services. In comparison, childcare is significantly more affordable. While each institution will have its own pricing, the cost to enrol a child in a nursery or kindergarten will average between €2,000 to €5,000 yearly in tuition, not accounting for extra fees.
The simple answer to this is: yes. However, public transportation systems are only truly well-developed and functioning in larger cities, like Lisbon and Porto. A car to get around becomes a must the further away from the bustling metropolitan areas. Smaller cities have their local transportation systems too, not connected to a larger network, but typically are unreliable and exist to mostly service the older population segments.
Public Transportation in Lisbon
However, getting around in Lisbon is effortless. The capital city, corresponding to the municipality of Lisbon, is only 1 of 18 in the greater Lisbon Metropolitan area, which is highly connected, being serviced by multiple buses, an underground metro, a railway service, trams, and boats. The Lisbon Metropolitan Area includes the following municipalities:
- Lisbon, Alcochete, Almada, Amadora, Barreiro, Cascais, Loures, Mafra, Moita, Montijo, Odivelas, Oeiras, Palmela, Seixal, Sesimbra, Setúbal, Sintra, and Vila Franca de Xira.
There currently is a Monthly Transportation Card, called Navegante Metropolitano, which enables any enroling participant to access all the previously mentioned transportation methods for €40,00 per month. Alternatively, single-purchase tickets are also available, either in the transportation itself, like the Carris buses, or in machines present at the Underground Metro and CP Railway services. For instance, a single ticket purchased at a machine in a Metro station costs €1,80, though it can also be used in Carris buses. However, a single trip purchased directly on a Carris bus will cost a bit more at €2,10.
Public Transportation in Porto
The city of Porto also has its own Monthly Transportation Card called Andante Metropolitano, which covers all the transportation methods available in the larger Porto Metropolitan Area, including buses, railway services, and Underground Metro at a cost of €40,00. In Porto, the price depends on the distance of the journey rather than the transportation methods used to reach there, which means the price is the same across the board. The Porto Metropolitan Area includes the following 17 municipalities:
- Porto, Arouca, Espinho, Gondomar, Maia, Matosinhos, Oliveira de Azeméis, Parede, Póvoa de Varzim, Santa Maria da Feira, Santo Tirso, São João da Madeira, Trofa, Vale de Cambra, Valongo, Vila do Conde, and Vila Nova de Gaia.
The city is divided into 6 Zones, and journeying across them means a slight price increase when making an occasional trip, which can be for a single use or 24-hour use. For instance, making a single trip within Zone 1-2 will cost €1,45, while crossing over to Zone 3 will cost €1,80, and up to Zone 6 can cost €3,20. 24-hour tickets begin at €5,15 for within Zone 1-2, and run up to €11,80 for up to Zone 6.
Railway Transportation across Portugal
In terms of railway services, operated by CP – Trains of Portugal, Lisbon has several stations, each strategically located at key points around the main Lisbon Municipality, which also connect to the other Municipalities surrounding Lisbon. To get around within the Lisbon Municipality via a Suburban Railway service typically costs €1,45, but it might increase if there is a Railway Line crossover. There are also 24-hour tickets, some of which also include other transportation methods. A 24-hour ticket for the Metro Underground, CP Railway, and Carris Buses costs 10,80€.
Besides the prices for riding in each Metropolitan Area’s public transportation system, there is also a National Railway Card, which is exclusive to Regional Railway services, distinct from the Suburban Railway services operating in the cities of Lisbon and Porto and their surroundings. This transportation card enables more efficient cross-country journeys and has a cost of €49,00.
Portugal’s Low Cost of Living Attracts Investors, Expats and Digital Nomads
When it seems like there is not anything else that Portugal can give to its Citizens and Residents, the country continues surprising and stunning people, enticing them to stay and presenting more reasons to settle down in the country, either temporarily or permanently. For instance, Residency in Portugal enables visa-free travel to the 29 European countries within the Schengen Zone, and currently has the fastest path to EU Citizenship, taking only 5 years for the Portuguese passport.
Digital nomads, in particular, will be content to know that Portugal has one of the best Wi-Fi services in Europe, enabling high-speed internet connection. However, expats and investors are drawn to Portugal not only because of its lower cost of living but also because of the country’s pro-investment environment and the attractive tax regime.
Portugal facilitates obtaining legal Residency status through Investment Visa programmes like the Golden Visa and the D2 Visa. Between the 2 of them, the D2 stands out, with Portugal Homes offering the best solutions on the market to take full advantage of the programme, starting at a minimum investment threshold of €280,000. Centred on Mátria Co-Working, a development building in the heart of Lisbon, Mátria is a qualifiable D2 Visa investment and the perfect platform to obtain Residency in 3 months and Citizenship in 5 years.
Does Portugal have a High Quality of Life?
The only downside to Portugal is the lower salaries in comparison to other Western and European countries. On every other level, Portugal has an arguably higher quality of life than countries like the United States, the United Kingdom, South Africa, India, and many others at a decidedly lower cost of living. A high quality of life can be measured across several aspects, including safety, air quality, education, healthcare, climate, and countless others that are always so intimately subjective. Rest assured, Portugal has something for everyone.
Safety is one of the most important things to consider, as someone wanting to relocate will want to ensure that their country of choice is a secure destination with low rates of criminal and violent occurrences, especially if family is involved. The 2023 Global Peace Index, a yearly report produced by the Institute for Economics and Peace, puts Portugal in the 7th place of the World’s Safest Countries.
Even though it may not seem the most obvious reason, air quality is a crucial factor for many expats since air pollution is a rather prevalent issue, affecting quality of life and increasing the risk of development of lung diseases. Portugal has the 7th Cleanest Air Quality in Europe, far ahead of countries like China, Belgium, France, Germany, Israel, India, South Africa, Switzerland, the United Kingdom, and the United States.
Furthermore, Portugal and its people are naturally friendly and warm, welcoming of foreign expats who have come to establish Residency in the country. Communication plays an important role in this regard, and integration will prove seamless since the Portuguese people are the 8th most proficient in English in the world.
Portugal is also one of the sunniest countries in Europe, with more than 300 days of sunshine per year. With a lower cost of living, when in comparison to other Western Countries, an accessible healthcare system, and some of Europe’s best schools and universities, Portugal presents the best environment for anyone, with a family or not, to come and settle down and enjoy high standards of living.
