Low-Cost, Old-World Living in Portugal

The following monthly budget is based on the cost of living for a couple living outside but nearby a suburban area like Lisbon or Porto.

Expense  U.S. $
 Rent (furnished two-bedroom apartment)  $1,300
Utilities (electric, water, gas, trash)  $150
Internet/phones  $65
Groceries/Food  $500
Health Insurance (will increase with age, health condition and plan)  $150
Transportation/Car or Public  $300
Miscellaneous/Eating out once a week, movie twice a month  $400
 Total:  $2,865

Portugal offers arguably the lowest cost of living in Western Europe. Just about everything, from accommodation to groceries, is affordable. Including rent, a couple can live comfortably in Portugal’s interior, or in small cities, from about $2,500 a month. A couple’s budget in Lisbon starts at about $2,500 or $2,800 a month…though you can, of course, spend more. Singles should plan on a budget of about two-thirds that of a couple.

Accommodation is the largest expense that any expat will incur, whether buying or renting property in Portugal.

Rents in small Portuguese cities and in the interior start as low as about $400 a month for a one- bedroom apartment. For a two-bedroom furnished apartment plan on doubling that figure. Do note that cheaper apartments may not have a heat source and the renter will need to buy portable space heaters. Not all apartment complexes in Portugal are equipped with elevators, so if you have problems with stairs be sure to check.

Rents in Lisbon, the capital, start at about $1,000 a month for neighborhoods an easy half-hour walk from the central tourist neighborhoods of the Baixa, Chiado, and the like. Keep in mind that cheaper finds may be available but again, as stated above, they will not have any source of heat for those cold, damp winter months. And you may likely be lugging your groceries up five flights of stairs if you choose cheaper options with no elevator. So, when choosing an apartment from a website do read the fine print.

Rents in the Alfama neighborhood, Lisbon’s oldest, can run somewhat lower. But its hills and cobbled streets may not suit all expats.

If you’re looking to buy, you can find comfortable apartments for sale in the interior for $125,000, although it may need some updating. Even in Lisbon you can find small, studio-type of apartments for around $150,000 price point in outlying neighborhoods. Closing costs on property sales in Portugal tend to run around 10% of the purchase price.

Note that the average size of apartments in Portugal, as in the rest of Europe, is considerably smaller than many North Americans are used to. A 550-square-foot apartment is considered perfectly adequate for a single person or a couple. A 1,000-square-foot apartment may have three or even four bedrooms and be considered suitable for a small family. Fortunately, Portugal’s generally mild climate means you are likely to spend lots of leisure time outside, on the beach, at outdoor cafés, or strolling Portugal’s beautiful towns and villages.

Food costs are generally low. Many cities and towns in Portugal—including Lisbon—continue to have large, thriving traditional markets, as well as supermarkets. A couple’s grocery budget can run from about $400 a month, depending on how you choose to buy. Some items that are luxuries elsewhere, such as good wine and olive oil, are locally produced and therefore inexpensive. You can get decent bottles of local wine from about $4 a bottle.

Meals out don’t have to be expensive, either. Portugal’s prato do dia (the lunch special) generally runs about $9 to $12 per person, depending on location, and is a complete, sit-down meal. Dinner for two, including wine, can run from about $35.

Utilities, including electricity, heating, water, and garbage collection, for a mid-range apartment can average around $100 a month. You may need to heat your apartment at times during Portugal’s relatively mild winter. And if you live in southern Portugal, you’ll likely want air conditioning during the hot summer months—which will increase your electricity bill.

But much of what is most enjoyable about Portugal—the friendly people, the leisurely lifestyle, mild weather, beautiful countryside, and ample beaches—is free.

Sample monthly budget for a single person

Sample monthly budget for a single person living on the Silver Coast, one-hour north of Lisbon in the city of Caldas da Rainha.

Item U.S $
Rent  (one-bedroom furnished apartment) $750
Utilities (gas, water, electric, trash) $100
Groceries/Food $250
Health Insurance (will increase with age, health condition and plan) $75
Internet/phone $65
Transportation/Car or Public $150
Miscellaneous/Eating out twice a week, movie once a month $150
Total: $1,540

Due to Portugal’s popularity in recent years along with inflation that the whole world is feeling, prices have risen. But still, most North Americans will find Portugal to be much more affordable than their lives back home, especially when it comes to healthcare.