In recent years, Portugal has emerged as a desirable destination for Americans seeking an escape from the fast-paced lifestyle and high living costs in the United States. 

With its warm climate, stunning beaches, and vibrant culture, Portugal has become an ideal place to settle down. Additionally, the favourable cost of living in Portugal compared to the USA adds to the allure of making the move.

The expected difference between the cost of living in Portugal and the USA.

When considering a relocation, it's crucial to assess the cost of living in the prospective country. Portugal stands out as one of the most affordable countries in Western Europe, offering a high quality of life favoured by expats. 

In terms of cost of living, Portugal outperforms the United States, ranking 13th in' the Quality of Life Index compared to the US at 39th. According to Numbeo, consumer prices, rent, and restaurant prices are significantly lower in Portugal, making eating out, grocery shopping, and renting properties more affordable compared to the US.

Comparison between the capital cities of the above countries.

To provide a detailed comparison of the cost of living, we will focus on the capital cities of Lisbon, Portugal, and Washington, DC, USA. According to Numbeo's data (last updated in April 2023), Lisbon offers a significantly lower cost of living compared to Washington, DC. 

Consumer prices in Lisbon are approximately 38 per cent lower than in Washington, DC (excluding rent), while rent in Lisbon is 51 per cent lower. Additionally, restaurant prices and groceries are around 42 per cent and 47 per cent lower, respectively, in Lisbon compared to Washington, DC. However, it's important to note that the local purchasing power in Lisbon is 61 per cent lower than in Washington, DC, indicating a relative difference in income levels.

Day-to-day expenses of Portugal and the USA

When comparing living expenses between Portugal and the United States, grocery prices in Portugal tend to be more affordable overall. Fresh produce like fruits, vegetables, seafood, and meat are particularly inexpensive in Portugal, especially if locally sourced. For example, a kilogram of apples may cost around €1.70 ($1.80) in Portugal, whereas it could be priced at $4.84 (€4.22) in the US.

However, it's worth noting that brand-name products can be pricier in Portugal compared to the US. Items like cereals, toothpaste, and cleaning products may have higher costs in Portugal.

Here is a comparison of prices for selected grocery items in Portugal and the United States:

Alcohol cost comparisons

When comparing alcohol costs, Portugal offers considerably lower prices compared to the US. For instance, a decent bottle of wine in Portugal costs around €4, while it would cost approximately €12 in the US. Domestic beer is also more affordable in Portugal, with prices around €1, compared to over €2 in the US.

Eating cost comparisons

Eating out in Portugal is known for its affordability. A lunch menu at a pastry shop can be as low as €5, while a coffee, especially an espresso, rarely costs more than €1. Inexpensive restaurants offer dinner for less than €10, and mid-range restaurants typically charge around €35 to €40 for a two-course meal for two people. In the US, a typical meal costs around €65.

Transportation cost comparisons

In terms of transportation costs, local transport in Portugal tends to be cheaper overall. Gas/petrol costs €1.89 per litre in Portugal, compared to €0.91 in the US. Public transport, such as monthly local transportation passes, is also more affordable in Portugal, with a cost of €40 compared to €64 in the US.

School cost comparisons

Regarding school costs, Portugal provides free public schooling for citizens and foreign residents. However, many expats opt for international schools in Portugal, which can range in price from €6,000 per year and up. In the US, private school tuition fees average around €9,394.60 nationally.

Travelling Costs

Travelling around Portugal is known for being affordable. As one of the least expensive countries in Western Europe, you can explore Portugal's natural landscapes, beaches, and historical towns for approximately €80 per day, depending on the type of accommodation you choose.

In comparison, travelling within the United States tends to be more expensive, with an average daily cost of around $224 for accommodation, food, and sightseeing.

Healthcare Costs

Portugal offers an excellent healthcare system, which is ranked among the best in the world. While not entirely free, medical fees in Portugal are generally reasonable, and the country has a hybrid system that combines excellent public and private services. Children and seniors receive free medical care, while others are required to make a small contribution.

Housing Costs

Housing costs in Portugal are significantly lower than in the United States, with prices generally around 40-50 per cent cheaper. Rent prices can vary depending on the location, with smaller or remote cities offering more affordable options starting at €400 per month for a one-bedroom apartment. In Lisbon, rents are higher, averaging around €861 for a one-bedroom apartment outside the city centre and €2,449 for a three-bedroom apartment in the city centre.

Property Prices

When buying property in a major city like Lisbon, Portugal, you can expect prices to range from around €3,207 per square metre for smaller properties in the outskirts to up to €500,000 depending on factors such as location, condition, and property type. It's important to note that the average size of apartments in Portugal is generally smaller compared to those in North America.

Electricity and Bills Expenses

In Portugal, the cost of utilities including electricity, heating, water, and garbage collection for a mid-sized apartment is approximately €112 per month. However, this can vary depending on factors such as usage, particularly during the hot summer months with air conditioning or mild winters with heating. It's worth mentioning that good insulation is important for maintaining warmth during the colder months.

In the United States, utilities are generally around 52 per cent more expensive, averaging around €169 per month. The cost of a prepaid mobile tariff is comparable in both Portugal and the US.

The cost incurred when relocating to Portugal

The cost of moving to Portugal includes various expenses that should be taken into consideration. One significant cost is shipping your belongings from the United States to Portugal. Shipping a 20ft container box from New York to Lisbon typically costs around €1,229.11 and takes approximately 14 days. Alternatively, if you prefer faster transportation by air, the cost increases to approximately €2,705.

In addition to shipping costs, you should budget for a plane ticket to Portugal, which averages around €382 per person for a one-way trip. Other expenses to consider are putting down a deposit when renting a property, acquiring a new phone plan, and purchasing necessary items to help you settle in.

How does one relocate to Portugal?

To move to Portugal, it is essential to have the legal right to reside in the country. There are two popular options to consider: the Portugal Golden Visa and the Portugal D7 Visa.

The Portugal Golden Visa offers immediate legal residency in exchange for an investment in the country, typically through purchasing real estate worth €500,000. After five years, you can apply for permanent residence and even Portuguese citizenship, provided you meet the requirements. It is advisable to consult with a Portugal Golden Visa consultant to navigate the process smoothly.

Please note that the Portugal Golden Visa program is coming to an end, so it is recommended to initiate the application process promptly.

Another option is the D7 Visa, which is suitable for individuals with a passive income from pensions or investments. You can assess your eligibility through a free test and find more information about the visa scheme. Our dedicated D7 Visa specialists can assist you in initiating your visa application.

If you are considering a move to Portugal, reaching out to relocation specialists like us can provide valuable guidance and support throughout the relocation process.

Portugal retiree's cost of living

Portugal is a popular choice for US retirees looking to enjoy their retirement years. The cost of living in Portugal, as we have discussed earlier, is significantly lower compared to the US, making it an attractive destination for retirees.

Retirees in Portugal can take advantage of affordable groceries, excellent healthcare services, and the opportunity to dine out at top-quality restaurants without breaking the bank. The Mediterranean lifestyle and pleasant coastal atmosphere provide a relaxing and enjoyable retirement experience.

For more detailed information on retiring in Portugal as an American, we recommend reading our comprehensive article on American Retirement in Portugal, which provides further insights and guidance.

Important factors to consider when relocating to Portugal. 

Visa and Residency

 Determine the appropriate visa or residency permit for your situation, whether it's the Portugal Golden Visa, D7 Visa, or another option. Understand the requirements, application process, and any financial obligations associated with obtaining and maintaining residency.

Cost of Living

Consider the cost of living in Portugal compared to your home country. Research housing prices, utilities, transportation, healthcare, groceries, and other daily expenses to ensure they align with your budget.

Healthcare System

Familiarise yourself with the Portuguese healthcare system and determine how you will access medical services. Explore public and private healthcare options, understand insurance requirements, and consider obtaining international health insurance for comprehensive coverage.

Language

While many Portuguese people speak English, especially in tourist areas, learning the Portuguese language can greatly enhance your experience and integration into the local community. Consider taking language classes or using language-learning resources to become proficient in Portuguese.

Housing and Neighbourhoods

Research different regions, cities, and neighbourhoods in Portugal to find the one that best suits your lifestyle and preferences. Consider factors such as proximity to amenities, transportation options, safety, and community atmosphere when choosing a place to live.

 Financial Considerations

Familiarise yourself with the Portuguese banking system and determine how you will manage your finances. Open a local bank account, understand currency exchange rates, and consider tax implications both in Portugal and your home country.

Social and Cultural Adjustment

Embrace the Portuguese culture, traditions, and way of life. Make an effort to engage with the local community, learn about Portuguese customs, and participate in cultural events to fully immerse yourself in the Portuguese way of life.

Transportation

Understand the public transportation system in Portugal, including trains, buses, trams, and metros, as well as options for owning or renting a car if needed. Familiarise yourself with driving regulations and obtain the necessary driver's licence if you plan to drive in Portugal.

Education and Schools

If you have children, research the education system in Portugal and explore schooling options. Determine whether you prefer public, private, or international schools and consider enrollment requirements, curriculum, and language of instruction.

Social Security and Taxes

Understand the impact of relocating on your social security benefits and tax obligations. Consider consulting with a tax advisor or financial expert to ensure compliance with both Portuguese and home country tax laws.

By considering these factors and doing thorough research, you can ensure a smoother transition and make the most of your relocation to Portugal.

FAQ

How much does it cost to live in Portugal?

The cost of living in Portugal depends on your budget, lifestyle, and location within the country. On average, the cost of living for a family of four is €2,073 per month, excluding rent.

How expensive is Portugal?

Portugal is relatively inexpensive compared to other Western European countries. The average cost of living in Portugal is around €1,608 (€1,500) per month, varying based on the region you reside in. It is generally 50 percent cheaper than living in the United States.

How much is the rent in Portugal?

The cost of renting a decent one-bedroom apartment in Portugal is approximately €776 per month near the city center and around €590 per month outside the city center.

What is the average cost of living in Lisbon, Portugal?

Lisbon, being the capital and a more expensive city, has an average cost of living of around €1,700 per month. However, the overall cost of living in Portugal per month will be lower than this average, as Lisbon has its own higher price range.

What is the cost of living in Portugal vs the USA?

Compared to the USA, the cost of living in Portugal is roughly 50 percent cheaper. This makes Portugal an attractive choice for expatriates, as living costs are more affordable compared to the USA.

How can I move to Portugal?

The process of moving to Portugal depends on your visa status. If you are an EU/EEA/Swiss national, you can move to Portugal without a visa.

However, if you are a US citizen, you will need a visa. One option is to participate in Portugal's Golden Visa scheme, which involves making an investment, such as purchasing a qualifying property in Portugal. Once the visa paperwork is completed, you and your family will be granted legal residency in Portugal. It is advisable to apply for the Portugal Golden Visa as soon as possible, as the program is coming to an end.

What is the cost of living in Portugal vs California?

Consumer prices in Lisbon, Portugal (excluding rent), are approximately 38 percent lower than in Sacramento, the capital of California. Rent prices in Lisbon are around 31 percent lower than in Sacramento. Additionally, restaurant prices are 41 percent lower, grocery prices are 51 percent lower, and local purchasing power is 55 percent lower in Lisbon. It's worth noting that Lisbon is the most expensive city in Portugal, and other parts of the country, particularly the countryside, offer even more affordability.

How much money do you need to live comfortably in Portugal?

Portugal is exceptionally affordable compared to other European countries. A couple with a mid-range income can comfortably live in Portugal's cities on around €1,700 per month. In Lisbon, a couple can live on approximately €2,000 per month. For a single person, the cost of living in Lisbon or Porto would be around €1,200 per month, and even less in smaller towns throughout Portugal. Keep in mind that the definition of living comfortably may vary, and your lifestyle will greatly impact the cost of living.

Is it cheaper to live in Portugal or the USA?

Living in Portugal is cheaper compared to the USA. Portugal is widely regarded as one of the most affordable countries in Europe, making it an attractive option for those seeking affordability.

What are the pros and cons of living in Portugal?

Portugal offers numerous advantages as a place to live, including over 300 days of sunshine per year, a high quality of life, and a low cost of living. Other pros include excellent education and healthcare systems, friendly locals, and the tax benefits provided by the Non-Habitual Residence (NHR) Scheme, which allows for significant tax advantages for up to ten years.

Some cons of living in Portugal include relatively low salaries and a sometimes slow bureaucratic process. However, Portugal remains an attractive destination for foreigners seeking to live in Europe. For more detailed information, you can refer to our article on the pros and cons of living in Portugal.

What is the cost of living in Portugal for a couple?

Depending on your lifestyle, a couple can manage with a monthly budget of €2,332 to €2,798 ($2,500 to $3,000) in Portugal outside major cities. In major cities, especially in the city center, a slightly higher budget may be necessary. Regardless, Portugal offers one of the most affordable costs of living among Western European countries, such as the UK, Spain, and France.

What is the cost of living in the Algarve, Portugal?

Living in the Algarve region of Portugal is generally affordable, although the cost of living will depend on your specific lifestyle and the area within the Algarve. As a general reference, you can dine out at an inexpensive restaurant in the Algarve for around €12. Renting a one-bedroom apartment in the city center would cost approximately €900, and basic utilities would add up to just over €100 per month. For more detailed information, you can refer to our Living in the Algarve Guide.

What is the cost of living in Portugal compared to Canada?

Portugal is considerably more affordable than Canada. Consumer prices in Canada are nearly 46 percent higher than in Portugal, rent prices are 47 percent higher, and restaurant prices are 62 percent higher.

What is the cost of living in Portugal compared to the UK?

Portugal is more affordable than the UK. Consumer prices in the UK are around 38 percent higher than in Portugal (excluding rent), rent prices are approximately 40 percent higher in the UK, and restaurant prices are about 77 percent higher. It's important to note that these comparisons are relative, and Portugal's average salaries are generally lower.

What is the cost of living in Portugal compared to India?

Portugal is one of the most affordable countries in Europe. However, when comparing the cost of living between Portugal and India, consumer prices in India are around 53 percent lower than in Portugal (excluding rent), rent prices are approximately 77 percent lower, and restaurant prices are about 62 percent lower.

Can you live in Portugal for $1000 a month?

Living on $1000 a month in Portugal is possible if you live frugally and in an affordable part of the country. However, with rising rental prices and housing costs in major cities like Lisbon, it may be challenging to live comfortably on $1000 a month in those areas.

What is the cost of living in Portugal for international students?

The cost of living for international students in Portugal is relatively affordable. However, the expenses will vary depending on your lifestyle and the specific location within Portugal. On average, a single person can expect monthly costs of around €595.4, excluding rent.