Cost Of Living In Portugal:
Guide For Expats In 2026

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Portugal has firmly established itself as one of Europe’s premier destinations for expats and retirees,  known for its high quality of life, vibrant culture, and laidback lifestyle. 

A primary driver of its popularity, however, is a cost of living that is significantly more affordable than most of Western Europe and the United States, allowing for a comfortable and fulfilling lifestyle without breaking the bank.

While it is an affordable country overall, it is important to note that costs can vary considerably depending on your lifestyle and where you choose to live. 

Expenses in the vibrant capital of Lisbon, for example, will differ from those in the sunny coastal towns of the Algarve or the quiet countryside. This guide provides a comprehensive and detailed breakdown of the expenses you can expect, from real estate and utilities to healthcare and groceries, to give you a realistic financial picture of a new life in Portugal.

Factors That Make Portugal Affordable

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Portugal’s reputation as an affordable destination is built on several key factors that allow expats to live well for less than in many other parts of the world.

Lower Costs Than The U.S. and Western Europe

Compared to its Western European neighbors like France, Germany, and the UK, Portugal consistently offers a lower cost of living across almost every category. Expenses for housing, daily groceries, dining out, and transportation are significantly more manageable, allowing a retirement income or salary to stretch that little bit further.

Favorable Tax Programs

For many years, Portugal has offered attractive tax programs for new residents. The most well-known of these was the Non-Habitual Resident (NHR) tax program, which provided significant tax benefits on foreign income. While this original program has been modified for new applicants, the government continues to offer attractive tax incentives for expats and certain skilled professionals, which can substantially reduce your overall tax burden.

Access to Public Healthcare

The country’s public healthcare system, the Serviço Nacional de Saúde (SNS), is available to all legal residents, including expats. While many choose to supplement this with private insurance, the existence of a high-quality, low-cost public option helps to keep overall healthcare expenses down, a major financial benefit compared to the U.S. system where private insurance is mandatory and expensive.

Real Estate and Housing Costs In Portugal

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Housing is typically the largest expense for expats in Portugal, and the costs can vary dramatically depending on the location and type of property. 

Renting or buying in the main cities like Lisbon and Porto, or in popular hotspots like the Algarve can be significantly higher than in the country’s interior.

Buying Property

Foreigners can buy property in Portugal with the same rights as EU citizens, and the market has been popular with international buyers for decades. In the center of Lisbon, the price per square meter to purchase an apartment can range from $500 to $700, while outside the city center, prices are closer to $300 per square meter.

In the popular Algarve region, a two-bedroom apartment can be found starting from around $250,000, though prices rise for properties with ocean views or prime locations.

Renting Property

Renting is a popular option, and rental properties can yield significant returns for investors. In central Lisbon, a one-bedroom apartment can range from $1,000 to $1,500 per month. In the city of Porto or in the coastal towns of the Algarve, a similar apartment might cost between $700 and $1,100. In smaller towns and the countryside, rental prices can be significantly lower, often less than $600 for a one-bedroom apartment.

Sample Breakdown of Monthly Expenses

Apart from accommodation expenses, your monthly budget in Portugal will include everyday costs for utilities, food, transportation, and healthcare. These costs are generally quite affordable and a single person or a couple can live quite comfortably for less than in the United States. 

Utilities (Electricity, Water, and Internet)

For a couple in a two-bedroom apartment, a typical monthly budget for all utilities would be between $120 and $200. This includes electricity, which can vary depending on heating or air conditioning usage, as well as water, waste, and gas. High-speed internet and mobile phone packages are competitive, often bundled together for $40 to $60 per month.

Groceries and Dining Out

Food is a highlight of Portuguese life and can be very affordable. A monthly grocery bill for a couple who primarily shops at large supermarkets like Continente or Pingo Doce and local markets will generally fall between $400 and $550. Dining out is a popular pastime and offers great value. A lunch special, known as a “prato do dia,” can often be found for under $10, while a three-course dinner for two at a good mid-range restaurant typically costs between $40 and $60.

Transportation

Public transportation in Portugal is efficient and inexpensive. Major cities like Lisbon and Porto have excellent metro, bus, and tram systems with a monthly pass costing around $45. For travel between cities, the train network is comfortable and reliable. While owning a car is a popular choice for exploring the countryside, gasoline prices are higher than in the U.S., and tolls on major highways can add up.

Healthcare Costs

Private healthcare in Portugal is high-quality and affordable. A visit to a general practitioner in a private clinic typically costs between $50 and $80, with specialist consultations being slightly higher. Many expats choose to have private health insurance for faster access and more choice. 

Comprehensive plans for a couple in their 60s can range from $200 to $350 per month, which is very reasonable for the quality of care provided.

Entertainment and Leisure

Leisure activities in Portugal can be surprisingly affordable. For example, a cup of coffee (a “bica”) at a local cafe will typically cost less than a dollar. A ticket to the cinema is usually around $8. 

Taking in the culture and sights doesn’t have to cost money; walking through historic city streets, relaxing on the country’s beautiful public beaches, or visiting famous landmarks is often free. 

Sample Monthly Budgets For Portugal

To provide a clearer picture of the cost of living in Portugal, the following are estimated monthly budgets. These figures represent a moderate lifestyle in a major city like Lisbon or Porto; costs can be lower in smaller towns and the interior of the country. 

Please note that these budgets are for illustrative purposes only and are based on our own research and experiences. 

Sample Budget for a Single Person

This budget assumes renting a one-bedroom apartment and using public transportation.

• Rent (one-bedroom apartment): $1,100
• Utilities (electricity, water, internet): $100
• Groceries: $250
• Transportation (public transport pass): $45
• Entertainment and Dining Out: $250
• Private Health Insurance (optional): $100

Estimated Monthly Total: $1,845

Sample Budget for a Couple

This budget assumes renting a one-bedroom apartment and using public transportation.

• Rent (one-bedroom apartment): $1,100
• Utilities (electricity, water, internet): $150
• Groceries: $450
• Transportation (two public transport passes): $90
• Entertainment and Dining Out: $400
• Private Health Insurance (optional): $250

Estimated Monthly Total: $2,440

Living Affordably In Portugal

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While Portugal is already an affordable country, adopting a few local habits can help you lower your monthly expenses even further and live very well on a modest budget.

One of the best ways to save money is to shop for groceries like a local. While large supermarkets are convenient, you will often find fresher produce and lower prices at the local farmers’ markets, or “mercados,” found in most towns and city neighborhoods.

For dining out, the best value is almost always the “prato do dia,” or dish of the day. Most traditional restaurants and cafes offer a fixed-price lunch menu, which usually includes a main course, a drink, and sometimes a soup and coffee, for around $10.

In the major cities, relying on the excellent public transportation system is far more cost-effective than owning a car. A monthly pass for the metro, bus, and tram systems in cities like Lisbon can help you avoid the high costs of gasoline, insurance, and highway tolls.

Finally, significant savings can be found in housing by choosing to live outside of the prime tourist centers of Lisbon and Porto. Rents in the suburbs or in equally charming but smaller cities can be hundreds of dollars less per month, offering a more authentic and affordable Portuguese lifestyle.

Our Thoughts on the Cost of Living in Portugal

Portugal offers an exceptional quality of life at a cost that is significantly lower than most of North America and Western Europe. 

The combination of affordable housing, inexpensive local food, and a low-cost public healthcare system allows expats to live very comfortably on a modest budget. Whether you are looking for a vibrant city life in Lisbon or a sunny retirement in the Algarve, Portugal offers a financially accessible and rewarding lifestyle.