Cost of Living in Portugal: Ultimate Guide for Expats

The favorable cost of living in Portugal continues to attract thousands of expats, retirees, and remote professionals each year. Portugal remains one of the most affordable countries in Western Europe, offering a high quality of life, excellent healthcare, and a relaxed pace of living.

However, affordability has become more nuanced in recent years, with housing prices in urban centers like Lisbon and Porto rising steadily due to strong demand and limited supply.

In 2025, a single person can expect to spend between €1,200 and €1,800 per month in major cities such as Lisbon or Porto, including rent and basic living expenses. In smaller towns or rural regions, the budget can drop to within the range of €900 to €1,300 per month. These areas are becoming particularly appealing to digital nomads and retirees looking for long-term value.

In this blog, you’ll find a clear breakdown of the cost of living in Portugal for expats, from everyday expenses in the most popular cities to how income and taxes can affect your budget.

Housing Costs: Lisbon vs. Porto vs. The Rest

Housing remains the single largest expense when calculating the cost of living in Portugal, and costs vary dramatically depending on location. In 2025, rental prices continue to rise in Portugal’s major cities. This is primarily driven by strong demand from locals, expats, and short-term rentals.

The table below provides a clear overview of average rental prices across Portugal’s main urban areas:

Key Takeaways:

• Initial Costs: Renting a property in Portugal typically requires paying at least three months of rent upfront. This includes the first month’s rental fee, a security deposit, and sometimes an additional month as a guarantee. Prospective tenants should be financially prepared for this initial outlay.
• Utilities: Basic utilities (electricity, water, gas, and garbage collection) cost around €115 to €130 per month for an 85m² apartment. Heating costs can increase significantly during winter due to the country’s limited insulation and lack of central heating systems in many homes.
• Internet and Mobile: A combined package including TV, internet, and phone typically costs €35 to €40 per month, with high-speed fiber connections widely available across the country.

Overall, housing costs are the main factor when determining whether Portugal’s living expenses stay within or exceed one’s budget. While Lisbon and Porto are still affordable compared to Western European capitals, those seeking more value may find secondary cities or coastal towns offer a far better balance between comfort and cost.

Daily Expenses: Groceries, Dining, and Transport

When evaluating the cost of living in Portugal, daily expenses remain one of the main reasons expats find the country attractive. Housing has risen in price, but day-to-day costs such as food, transport, and healthcare are still among the most affordable in Western Europe.

Groceries (Food)

Grocery prices in Portugal are relatively stable and budget-friendly. A single person typically spends around €250 – €300 per month on groceries, depending on dietary habits and shopping choices. In 2025, you can expect the following costs for common groceries:

• 1L milk: €1.10
• 1kg rice: €1.50
• 1kg chicken breast: €6.00 – €7.00
• 12 eggs: €3.00
• 1kg apples: €2.00
• Fresh bread loaf: €1.50

Local markets and supermarket chains such as Continente, Pingo Doce, and Lidl provide affordable options, especially for seasonal produce and Portuguese staples like olive oil and fresh fish.

Dining Out

Eating out is part of Portuguese culture, and it’s very accessible. A local Prato do Dia (dish of the day) usually includes soup, a main course, drink, and coffee, and costs from €8 to €15 in a neighborhood tasca (family-run restaurant).

For a more formal evening out, a three-course meal for two at a mid-range restaurant averages €40 – €45, including a bottle of local wine.

The affordability of dining out remains one of the highlights of Portugal’s cost of living, allowing expats and locals to enjoy excellent cuisine at modest prices.

Transportation

Public transport in Portugal offers excellent value and reliability:

• Public Transport: A monthly pass in Lisbon or Porto costs about €40, covering metro, bus, and commuter train travel within the main metropolitan zones.
• Car Ownership: In contrast, maintaining a car can be expensive. Fuel costs range from €1.70 to €1.90 per liter, and road tolls on motorways quickly add up for frequent travelers. In city centers, parking costs can add up, making public transport a more practical option for urban residents.

Healthcare (Health)

Portugal’s healthcare system combines public and private options:

• Public SNS (Serviço Nacional de Saúde): Offers high-quality, low-cost medical care for residents and legal residents, though waiting times can be long.
• Private Insurance: Many expats opt for private health insurance, which ranges from €40 to €100 per month for a basic plan, ensuring faster access to specialists and private hospitals.

Overall, even with rising rents, daily costs for food, transport, and healthcare keep the average cost of living in Portugal comfortably below most Western European benchmarks.

Ready to take the first step? Get clear guidance on eligibility and a personalized immigration path, with support from our experienced immigration lawyers.

City Comparison: Where to Live on Any Budget

Portugal offers a diverse range of lifestyles, from the energy of Lisbon to the coastal regions such as the Algarve or the budget-friendly pace of smaller university towns. Understanding the regional differences is essential when assessing the cost of living in Portugal, as prices can vary dramatically from one city to another.

Lisbon: Most Expensive, Highest Salaries

The capital remains Portugal’s economic and cultural powerhouse. It’s also the country’s most expensive city, with rental prices in Lisbon being the highest in the country. On the other hand, the city has the highest salaries and fantastic professional opportunities. It’s ideal for young professionals, digital nomads, and entrepreneurs who value city amenities, international schools, and strong digital infrastructure.

Despite the rising costs of housing, Lisbon remains affordable compared to other Western capitals. Consumer prices are around 57% cheaper than in New York, and overall living expenses are far below those in cities like London or Paris.

Lisbon is a great pick for professionals, start-ups, international companies, and expats seeking an urban lifestyle.

Average living costs (single person): €1,500 – €1,900/month

Porto: The Northern Cultural Hub

The cost of living in Porto, Portugal, is roughly 5% to 15% lower than in Lisbon, making it a popular alternative for expats looking to balance affordability and quality of life. Porto offers a vibrant cultural scene, excellent food and wine, and a strong sense of community, with a lower level of tourism and congestion when compared to the capital.

Remote professionals, creatives, and families seeking a slower-paced but connected lifestyle should definitely consider Porto as one of their top options in Portugal.

Average living costs (single person): €1,200 – €1,600/month

The Algarve: Ideal for Retirees and Seasonal Expats

In Portugal’s southern coast, you will find cities like Faro, Lagos, and Albufeira. The region is known for attracting retirees and sun-seekers. While coastal rents in the Algarve can match Lisbon or Porto during the high season, moving a few kilometers inland offers far cheaper options.

You can find some one-bedroom apartments for under €700. The region’s mild climate, golf resorts, and established expat communities make it a top destination for retirees or remote professionals who prefer a laid-back lifestyle to city living.

Average living costs (single person): €1,000 – €1,400/month

Best Value: Braga and Coimbra

For those prioritizing affordability, Braga and Coimbra consistently offer the lowest average cost of living in Portugal. These mid-sized university cities provide affordable housing, strong transport links, and thriving local economies, without compromising on culture or comfort. These areas are perfect for students, young families, and long-term expats seeking the best balance between cost and quality of life.

Average living costs (single person): €900 – €1,200/month

Across the board, Portugal’s regional diversity means there’s an option for every budget,  from cosmopolitan city life in Lisbon to relaxed, affordable living in Braga or Coimbra.

The Expat Perspective: Income and Taxes

From an expat’s point of view, understanding income and taxation is essential to assessing the cost of living in Portugal. While the country remains affordable compared to much of Western Europe, the local income levels put this affordability into perspective.

Income Reality: Why Foreign Earners Have an Advantage

Portugal’s average net salary ranges between €1,100 and €1,300 per month, depending on region and industry, which is significantly lower than salaries in most Northern European countries or the U.S. This explains why Portugal feels particularly affordable to expats, retirees, and digital nomads earning income abroad.

Those earning in stronger currencies (USD, GBP, or even EUR from international contracts) often find they can either maintain a comfortable lifestyle or save more money, all while enjoying Portugal’s high quality of life, healthcare, and climate.

Taxation in Portugal

Once you become a tax resident in Portugal, you are subject to Portuguese tax on your worldwide income. The system is progressive, with tax rates ranging from 13% to 48%, depending on your income level.

Portugal offers several regimes and deductions that can significantly reduce the effective tax rate, especially for newcomers. We recommend speaking with an experienced tax advisor to help set up a tax plan for your unique circumstances!

Residency Pathway and Legal Setup

To benefit from Portugal’s lower living costs and lifestyle advantages, expats need the correct residency visa. Options such as the D7 Visa (for passive or retirement income) and the Portugal Digital Nomad Visa (for remote workers) allow non-EU nationals to live legally in Portugal while earning income from abroad.

For anyone considering this stage, professional legal guidance is invaluable. Immigration experts like Lexidy help expats secure the right visa, register tax residency, and ensure full compliance with Portuguese law, improving their chances of a successful application and transition from the outset.

If you’re planning a move to Portugal, explore our Portugal Immigration Services to understand how we can support your transition.

Conclusion 

Portugal continues to offer one of the best cost-to-quality-of-life ratios in Western Europe. No matter what area you are interested in moving to, the cost of living in Portugal remains far lower than in countries like the U.S., U.K., or Germany.

For expats, retirees, and remote professionals earning income abroad, this balance of affordability, safety, and lifestyle makes Portugal a standout choice for long-term relocation.

If you’re planning your move and want to understand your visa, tax, and relocation options, our legal team can help. Fill out the form below to connect with our Portuguese immigration and tax experts to start building your life in Portugal with confidence.