The Cost of Living in Portugal

Portugal provides a very attractive destination for people looking to move to the Mediterranean not least for the fantastic climate and culture but also for the cheaper costs of living.

The cost of living in Portugal has however risen significantly over recent years although is still cheaper than the UK in general, especially in rural areas. The cost of living in Portugal is reported to be on average, around 35% lower than the UK, however this does depends on the area.

Portugal is generally cheaper than the UK with regard to expenses such as accommodation, food, alcohol and eating out.

Rents are generally cheaper in Portugal, your weekly shop will be around 10-15% cheaper and eating out.. well, its hardly worth eating in! Depending on your circumstances you may benefit from considerable tax advantages for you too which make any additional costs insignificant to the bigger picture.

The costs of living in the cities such Lisbon, Cascais and Estoril are much higher than in other areas and can be comparable with other north European cities depending on lifestyle. Areas such as the Silver Coast, Central Portugal and parts of the Algarve still offer a cost of living much cheaper than in the UK.

Public transport in Portugal is efficient and  relatively cheap in most areas too. As car and petrol expenses can be quite high in Portugal, this can offer a good value option.

Whilst some things are more expensive, the costs of some utility bills can be higher in Portugal when compared with the UK, essentials such as toiletries and tea tend to be more and clothing can be more expensive – depending on where you shop of course.

You can enjoy a beer in Portugal for about €3 and you can pick up a fairly decent bottle of local Portuguese wine from €3! A cup of coffee costs on average around €1.50.

The costs of living for those working in Portugal does not generally represent good value as the lower costs are relative the wages in Spain which are much lower than in the UK. Taxes have also been increasing over recent years. IVA (VAT) in Portugal is also at 23%.

For anyone considering the costs of moving to Portugal, you should also factor in additional expenses such as flights back to the UK to visit family, any healthcare and health insurance costs and professional fees to help manage your taxes and accounts in Portugal.

If you are thinking of moving to Portugal, you should make sure you do your research about the area that you are planning to live in the make sure that your calculations add up as the costs of living does vary dramatically depending on the area of Portugal you live in.  For the most part however Portugal does provide a fantastic way of life and great value for money.

If you require any assistance with your plans to move to Portugal, download our helpful guide here,  or contact us on 01244 478 911 or at

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Article published: September 13, 2016