May 19, 2020

Residence by Investment in Portugal in 2020: Cost of Living

If you have not obtained a residence permit yet, just planning this important step in your life, may we assure you that the right time is right now.

In the middle of the pandemic it would be too simplistic to suggest that many tasks could be more urgent these days than planning and preparing for the future. We believe that obtaining a residence permit in Portugal by real estate acquisition in 2020 is a reasonable and justified step. However, it’s common sense that while applying for the Golden Visa program you should equip yourself with essential information about local life, work, healthcare, taxes, and other aspects.

This article is to help you become better aware of the ongoing situation and its possible impacts on the cost of living in Portugal.

You should not postpone, nor suspend until better times your applications for Portuguese residence by investment or citizenship by investment in Portugal.

Before the offices of SEF (Servico de Estrangeiros e Fronteiras, Office for Foreigners and Frontiers) reopen, our experts will prepare your portfolio of necessary documents and help you select the most promising property for your investment. Just send us your request by email, and our experts will provide you information and support

Instead of wishful thinking that things would return to how things were, let us project what new direction our life will take.

Residence by Investment in Portugal in 2020: Property Transfer Costs

The Golden Visa Program, also known as the Golden Residence Permit (GRPP) or Residency by Investment (RBI), provides the basis for the Portuguese residence permit. It involves several investment options, including some business-oriented schemes not related to real estate. In this article we will not go into their details. Let us consider the benefits of property investment opportunities.

Property investment options are the following ones:

– the Golden Visa Portugal 500K EUR. This is the standard option of residence by property acquisition free of any restrictions regarding the category of real estate, its location, or technical condition. This sum of money is quite sufficient for the acquisition of a good villa or apartment with a plot of land (up to 400-700 m2) with a swimming pool and many other attributes of a prosperous life. Our customers have continuously expressed their interest in the property located in the so-called Big Three regions of Porto, Lisbon, and the southern coast of Portugal (Lagos, Luz, Portimao, Carvoeiro, Armacao de Pera, Albufeira, Faro, etc.).

– the Golden Visa Portugal 350K EUR. This is the second basic option of residence by investment, with the acquisition of some property built 30 years ago which requires restoration/ refurbishment, or is located in areas to be reconstructed or restored. If you decide to choose this option, please take into account that you will also need to cover the repair and other expenses (but they are counted as part of the total investment).

the Golden Visa Portugal 400K EUR. / 280 thousand EUR. These two options of property acquisition are available at 20% discounts on the above-mentioned 500K EUR and 350K EUR plans. They are designed for residence by investment in sparsely populated and/or economically underdeveloped districts. It may be a good offer for people in the 50+ age category because most younger people get bored in the outlying districts.

Property Transfer Taxes and Fees in Portugal in 2020 include:

  • The Stamp Tax (IS, Imposto do Selo) at the 0.8% rate from the transaction value quoted in the contract.
  • The municipal property transfer tax (IMT) at the rates from 0% to 8%,depending on the transaction value as well as the type and location of the property.
  • The annual municipal property tax (IMI) at the rates from 0.3% to 0.8%.
  • The notary and/or lawyer services at  1% (roughly).
  • The Individual Tax Identification Number (NIF, Numeros de Identificacao Fiscal) is issued at 3.5 EUR.

If you decide to contract the professional services of our experts, the total value of our agreement will include all your applicable fees and charges.

Basic Taxes and Fees in Portugal in 2020 given below are quoted in EUR per one person / a family of 4 / a family of 6:

  • 5173.3 / 20694.8 / 31042.2 – the state duty for the residence permit issuance.
  • 200 – the NIF (Numeros de Identificacao Fiscal) issuance fee.
  • 517.4 / 759.2 / 920.4 – the biometric data analysis fee.
  • 200 / 800 / 1200 – the medical insurance fee.

Please note that if you move with your family members (especially if the application includes minor children and elderly parents), you should be ready to cover extra expenses. For more information on this and any other issues please contact our experts at

Residence by Investment in Portugal in 2020: Utility Expenses

The value of your utility bills depends on the size of the property. For example, utilities in an apartment of about 40 m2 will cost you about 70 EUR / month. However, this type of property would not be sufficient for you to qualify for a residence permit by the Golden Visa rules.

Reputable apartments or villas that are much more interesting to investors require bigger expenses, but not too much bigger. Saving money on utilities is not in the Portuguese lifestyle, and everyone is expected to pay utility bills on time.

Public utility bills (EUR, mean value per person):

  • Basic (Electricity, Heating, Cooling, Water, Garbage) for 85m2 apartment: 100.18 EUR
  • Water / Electricity: 120
  • Private insurance (depends on age, coverage) : 20 – 50 / month
  • Internet (60 Mbps or More, Unlimited Data, Cable/ADSL): 33.16
  • 1 min. of Prepaid Mobile Tariff Local (No Discounts or Plans) 0.17 EUR
  • Prepaid sim card package (one of many): 3 GB and 500 mins/SMS and apps for 30 days: 9.90

Residence by Investment in Portugal in 2020: Average Wages

To some of you this piece of information might seem out of place in a post on residence permits through solid investments in upmarket property. However, quite many expats, having moved into Portugal, get confused about how to establish themselves in their new country whilst they decide on their next entrepreneurship or career choice. If you are not planning to start looking for a job or business opportunity immediately, it is still worth getting a general idea of the potential income.

A typical wage in Portugal is around 4,860 EUR per month on the average, with 50% of wages ranging from 660 to 4,860 EUR, and half ranging from 4,860 to 21,500 EUR (the actual maximum salary can be higher).

Wages depend on experience, location, and career field as well. Employees with up to 5 years of experience often earn 32% more than newcomers but 36%  less than professionals with experience of more than 5 years. On average, the salary of a person with the 10 year experience is double the salary of the same person a decade ago.

Qualified and certified staff earn on average 17% more than their peers who have just started a professional career. Employees with a Bachelor’s Degree earn 24% more than their peers with a certificate or diploma. Professionals with a Master’s Degree earn 29% more than those with a Bachelor’s Degree. Ph.D. holders earn 23% more than their peers with a Master’s Degree.

Gender should not affect the pay, but in reality male employees in Portugal earn 6% more than their female peers. The average salary increases within one year (12 months) in Portugal by 7% (early 2020). Many employees receive bonuses, so their actual incomes are higher than their wages.

Typical wages by profession (EUR, rough estimations of Gross Monthly Average):

  • Accounting and Finance: 4,700 EUR
  • Advertising / Graphic Design / Events 4,250 EUR
  • Architecture: 4,120 EUR
  • Banking: 5,490 EUR
  • Counseling: 5,190 EUR
  • Drivers: 3,280 EUR
  • Engineering: 4,320 EUR
  • -Executive and management: 6,590 EUR
  • Fashion and Apparel: 4,520 EUR
  • Food / Hospitality / Tourism / Catering: 4,000 EUR
  • Government and Defence: 5,380 EUR
  • Health and Medical: 6,760 EUR
  • Import and Export: 4,720 EUR
  • IT: 4,700 EUR
  • Legal: 5,340 EUR
  • Marketing: 5,690 EUR
  • Media / Broadcasting / Arts / Entertainment: 4,590 EUR
  • Oil / Gas / Energy / Mining: 4,580 EUR
  • PR: 5,170 EUR
  • Recreation and Sports: 4,120 EUR
  • Teaching / Education: 5,060 EUR
  • Science and Technical Services: 5,330 EUR

The best paying job in Portugal is Surgeon – Neurology: 18,700 EUR / Month

According to several resources, the average single person in Portugal spends around 76% of their income and saves approximately 24%.

Residence by Investment in Portugal in 2020: Economic and Business Status

Since joining the European Community in 1986, Portugal has become a diversified and increasingly service-based economy. The Global Competitiveness Report of the World Economic Forum released in the 2018 edition ranked Portugal 34th out of 140 countries.

Several notable companies with worldwide reputation are headquartered in Portugal.

In 2019 Portugal ranked 39th (of 190 economies) by the Ease of Doing Business index in the rating compiled by the World Bank.

Since 2014, the Portuguese economy had been steadily expanding and the unemployment rate shrinking – before the COVID-19 pandemic demolished livelihood in tourism, hospitality, and other industries. It has caused extreme turbulence in the world. Some experts say that for Portugal the worse is likely to come in the second quarter. As of April 2020, both Fitch Ratings and S&P Global Ratings revised their outlooks to stable from positive and affirmed at BBB. However, the government forecasts a prudent yet comfortable recovery in two to three years.

According to Santos Silva, Minister of Foreign Affairs, the current confinement and the closure of economic activities has forced countries “to learn some lessons that could be an opportunity for Portugal and Europe”. He says, “The first axis [of the Portuguese strategy] is that Portugal wants to be at the forefront of Europe’s reindustrialization and wants to put its enormous industrial capacities at the service of Europe”.

130,000 foreign citizens have moved to Portugal during the Covid-19 pandemic. They had filed their cases at the Foreigners and Borders Service before 18 March, when it was decided to enact a state of emergency. Having arrived in Portugal, they enjoy guaranteed access to healthcare, social security support, and various rights, such as entering into a contract lease or employment contract.

There are some issues for new expats in Portugal to take into consideration, though. That is why we are ready to take over all organizational matters and help you avoid the pitfalls of starting a new business. Please write to our e-mail address, or contact us by any other preferred channel of communication.

Residence by Investment in Portugal in 2020: Food Prices and Food Service

You can buy food in markets, regular shops, or supermarkets. The locals prefer supermarkets, but this choice depends largely on the region and the number of retail outlets in the neighborhood. However, the food quality is quite high everywhere, irrespective of the point of sale.

Here are current food prices in EUR:

  • Milk, 1 liter: 0.5
  • White bread, 0.5 kg: 0.7
  • Rice groats, 1 kg: 0.6
  • Pasta, 1 kg: 1.5
  • Eggs, 12 pcs.: 1.2
  • Hard cheese, Portuguese, 1 kg: 5
  • Olive oil, 1 l: 5
  • Chicken, 1 kg: 3.5
  • Beef (other than more expensive loin) – 6, ham – 15
  • Squids, octopus (1 kg): 8
  • Fish, 1 kg: dorada – 5, tuna – 8, trout – 10
  • Fruit, 1 kg: apples – 1, bananas – 1, oranges – 0.9
  • Vegetables, 1 kg: tomatoes – 0.8, potatoes, onions, salad leaves (cabbage) – 0.5
  • Water, 1.5 l: 0.2
  • Beer, 1 bottle, local: 0.6
  • Wine, 1 bottle, local: 3
  • Cigarettes, 1 pack: 4.5

Supermarket chains Pingo Doce, LIDL, Alisuper, Continente Bom Dia, and Mini Preco offer a fairly large range of products and are open till 7-9 pm.

Gourmets and fans of healthy food buy from farmers’ markets. They are not open every day, but their products are all-natural, often organic, and always fresh.

Eating habits should be also mentioned here. Although there are many restaurants and cafes in the country (especially in big cities and resorts), local residents prefer eating at home. But on special occasions, they book tables at decent establishments. Restaurants open at 07:00 or 07:30 pm and close around 10:00 or 11:00 pm. The busiest time is usually around 8:30 to 09:00 pm.

You’ll get a better value for money if you keep away from tourist-oriented restaurants and eat where the locals go to lunch. The portions served in traditional Portuguese restaurants are huge and are often designed for two. More modern and fancier restaurants serve smaller portions.

The average check depends on the category of the restaurant, but anyway you could hardly qualify it as exorbitant or unreasonable for an average person: under 30 EUR in a diner and under 80 EUR in a reputable restaurant. A more affordable option would be a business lunch at a snack bar – at only 5 EUR. Of course, we do not mean you could order anything like Michelin cuisine at such prices, but the appearance, taste, smell, texture, and consistency of dishes at a local restaurant or café are usually fresh, creative, delicious, quite appealing to most visitors.

Residence by investment in Portugal in 2020: Transport

In cities and large settlements, public transport is very well developed, so you do not have to make a rush purchase of a private car. The public transport is quite varied and convenient: buses, trams, subways, funiculars, and lifts. The metro system is clean, efficient, and safe.  Wi-Fi is available on buses and in some other means of transport. Children under 12 years are entitled to a special card and ride for free. Prudent adults can also buy a prepaid refillable Zapping card at any train station at special rates, so it usually works out cheaper than buying one-way tickets. The card itself costs 0.50 EUR, and you can charge it with 3, 5, 10, or 20 EUR at any time.

Standard vs Special Zapping rates per ride per person, whatever the distance (EUR):

  • Bus, tram: 1.85 / 1.33
  • Metro: 1.45 / 1.33
  • Funicular: 3.7 / discounts
  • Lift (for example, in Lisbon it is Sta. Justa, 2 trips): 5.15
  • 24-hour pass (incl. all types of transport except taxis): 6.3
  • Monthly pass (Lisbon, for example): 6.3: 36.7
  • Transtejo/Soflusa Ferry, 1 trip: 1.25 – 2.7
  • Cacilhas travel card* (+ ferry): 9.35
  • Traveling-all-Lisboa* (+ some commuter trains): 9.35
  • Train (regular and high speed): 24 – 40 / 40 – 65
  • Simple suburban train: 3 – 7
  • Express Bus: 20 – 35

Alternative modes of transportation are also well developed:

  • Bicycle rental, per day: 15 – 20.
  • Taxi: 3.5 (per order) + 0.9 per 1 km. There is a 20% surcharge at night.
  • Rent a car: from 15 / day. This amount does not include DT (1.3) or gasoline (from 1.5). You will also pay the toll on some roads (1.7 – 19.3).

Many expats think that cars are one of only a few items that go against the general rule of Portugal’s low cost of living. You are allowed to import one vehicle per person to the country tax-free, but you must have owned the vehicle for six months.

Just to give you an idea of new car prices in Portugal, here are 3 examples. You can buy:

  • Volkswagen Golf 1.0 TSI 110 Advance 5p. at about 24.5K EUR;
  • Toyota Corolla HB 1.2T 116 Comfort+Pack Sport 5p S/S at 25K EUR;
  • BMW Serie 1 F40 116d 116 5p at 30K EUR.

The Portuguese environmental mindset is increasingly shifting the buyers’ preferences and market towards electric cars. There are about 2.500 hybrid electric vehicles (HEVs) on the roads. However, the national policy is in favor of pure EVs powered by domestic renewable energy.

At the moment Portugal does not comply with the EU legislation requiring the norm of a maximum of ten cars per each charging station. Considering the ongoing de-carbonization of transportations via electrification, there has to be a huge investment in the public network of charging stations.

Residence by Investment in Portugal in 2020: Shopping

All well-known international and many national clothing brands are present in Portugal. Shops close at 08:00 p.m. Besides, from 12:30 p.m. to 03:00 p.m., employees leave for the siesta, so the shopping is never 24/7. You can buy clothes in large shopping malls that work until midnight, but prices are slightly higher there.

Examples of some prices of clothing (EUR):

  • Short-sleeve Summer T-shirt: from 10
    • Dresses, swimsuits: from 20
    • Jeans, branded sneakers, leather shoes: from 50
    • Leather bags: from 100

There are two large annual sales seasons: from January 7 to the end of winter and from August 7 to the end of September. During these periods, it is realistic to count on good discounts, often reaching 80%. You can save on buying branded clothing in small outlets in the suburbs.

There are many large shopping centers in big cities (Porto, Lisbon). For example, Centro Comercial Amoreiras, Rua do Carmo, Centro Commercial Colombo / Circular, Avenida da Liberdade, Chiado, Avenida Eduardo Pacheco, Forum Tivoli.

There are some issues for new expats in Portugal to take into consideration, though. That is why we are ready to take over all organizational matters and help you avoid the pitfalls of starting a new business. Please write to our e-mail address, or contact us by any other preferred channel of communication.

Residence permit in Portugal in 2020: Taxes, Healthcare

We will discuss the details of taxes and fees in one of the next articles, but as for now we will only outline the standard contributions to the state budget.

Income taxes and fees in Portugal

Personal Income Tax (IRS) is levied on the totality of the tax resident’s revenues, including those obtained abroad, at progressive rates varying from 14.5% to 48%. We just have to accept this and contribute to the state half of the salary if we earn over 80.000 EUR. In return, residents get quality education and healthcare for free (many find these services, programs and provisions quite satisfactory). It is not acceptable to be an evader in Portugal, and the taxation authorities are very strict about it.

Corporate Income Tax (CIT) is levied on profits derived by both resident and non-resident entities. The standard rate is 21%. It is automatically summed up with two other rates – the municipal surcharge (1.5%) and the state surcharge (progressive scale under 30%). The total amount can be quite big  – up to 31.5%, but this is only if the profit exceeds 7.5 million EUR. The tax-free income is 1850 EUR. The IRS depends on the size of the dependent family unit, a minimum living income. Pensioners are treated on a different basis.

– Corporation Tax (IRC) is charged at a rate of 17% (on the first 15K EUR earned)  and 21% (on amounts over 15K EUR) on profits made by corporate resident entities and non-resident entities with head office and management in Portugal. In the case of resident entities, IRC is charged on all income, including income arising out of Portugal. In the case of non-residents, IRC is charged only on income arising in Portugal.

Capital gains and losses are integrated into the taxable basis of the IRC (by adding the taxable gain to the taxable income). The taxable profit is subject to certain adjustments. The Capital Gains tax on the sale of a property in Portugal is levied at 28% for individuals and 25% for companies (non-residents). In case the seller reinvests the money from a sale, then only 50% of the net taxable income is subject to capital gains tax.

– VAT: the standard rate is 23%. There are also lower rates – 13% and 6%. Some transactions can be VAT exempt.

– Stamp duty (levied in case of especially important documents) can vary from 0.5% to 10%.

There are many nuances in taxation, tax incentives, tax exemptions, and other taxation-related questions.

Social security contributions consist of various types of funds. There are also social security contributions which are mainly paid by the employers and the employee. The typical amounts deducted are as follows: Social Security of the employee 11%, Social Security of the employer 23.75%.

Healthcare is particularly important this year, and often quite extensive. The country’s public healthcare services are free or low-cost for anyone, including expats, who pays dues to the Portuguese social security program.  Retirees from other EU countries with a residence card and a state pension are also entitled to free or low-cost medicine.

In 2019 according to the Health Care Index Portugal ranked 22nd out of 89 countries, with a high score for quality of infrastructure. Most prescription drugs are reasonably priced.  The state healthcare standard is relatively good, though not consistent. Not all types of treatment are available for free.

Some expats prefer to take out private health insurance for shorter waiting times, better facilities, a wider choice, and fewer language barriers. The cost of private health insurance varies (from 50 EUR to 70 EUR / month) depending on the type and coverage.

There are some issues for new expats in Portugal to take into consideration, though. That is why we are ready to take over all organizational matters and help you avoid the pitfalls of starting a new business. Please write to our e-mail address, or contact us by any other preferred channel of communication.

Residence by Investment in Portugal in 2020: Education

Educação Pré-Escolar (Pre-school education for 3-5-year-old kids) is optional. There are 3 types of kindergartens (Jardins-de-Infancia): free; partially paid; for full payment. Pre-school establishments are founded and run by different organizations, that is why their programs and fees are different.

3 levels of Basic Education (4+2+3 years) in Portugal are compulsory and free for all 6-15 years old kids.  The study materials are purchased by parents. When students turn 15 years old they have to choose which type of schooling to take next.

Secondary Education (3 years) of 15-18-year-old students is provided at either state schools (generally free), private schools, or cooperative schools. The tuition fee depends on the school. The curriculum at this level can be standard (general plus technological courses) or diversified (with science & humanities, arts, technology, vocational training tracks). Secondary education is post-compulsory and prepares students for high school. The Portuguese diploma of secondary education is recognized in all EU countries.

Post-secondary-level technological specialized courses (CET) provide professional competencies and qualification. Graduates can continue their career-based education at polytechnics.

Tuition at public and private Portuguese universities and polytechnics is not free.

Full-time students in bachelor’s and master’s programs pay tuition fees of approximately 950 – 1250 EUR per academic year. Doctorate programs cost around 2500-3000 EUR per year. Tuition fees at private establishments are usually a bit bigger than at public ones. Scholarships and discounts are available to some students, depending on their academic merits and other criteria.

Residence by Investment in Portugal in 2020: Recreation and Leisure

There are plenty of opportunities for Leisure and Recreation pursuits. The options vary by type, location, and prices.

The average prices for urban entertainment (EUR) are:

  • Cinema: up to 10
    • Theatre: from 10
    • Museums, palaces: from 5

The most popular options for recreation (EUR):

  • Diving: South coast
    • Lazy beach holidays: Madeira, Azores archipelago
    • Nightlife, amusement parks: Cascais
    • Casino: Estoril
    • Children’s recreation: all over Portugal (water parks, theme parks, and fun areas)
    • Specialized water parks, aquariums
    • Wildlife: Badoca, Safari Park

Residence by Investment in Portugal in 2020: General Cost of Living

Let us try to get a general idea of the typical living expenses in Portugal for a family of 3 members (one child, Lisbon, EUR):

  • Food, hygiene: 500.
    • Utilities: 115.
    • Insurance: from 150.
    • Telecommunication services: 32.
    • Kindergarten (public): about 30.
    • Urban transport passes: 72. If a child has not reached the age of 12 years, her travel is free.
    • Entertainment: from 50.

Experts estimate the cost of living in Lisbon compared to other cities as following:

  • 48% cheaper than New York
  • 22% cheaper than Munich
  • 9% cheaper than Madrid
  • 14% cheaper than Brussels
  • 33% cheaper than Paris
  • 45% cheaper than London

General advice:

  • Buy a house. Choose only reasonable options. This applies to both the area, the technical specifications, as well as the district. And if you are interested in a residence permit in Portugal in 2020, it is better to invest in multiple properties with the total value meeting your objectives and qualifies for one of the Golden Visa options.
    • Buy insurance which covers a wider range of health problems and related services. Paid treatment is much more expensive, so chose the insurance with the biggest possible coverage.
    • Shop at retail supermarkets and small grocery stores.
    • Cook at home.
    • Purchase a month’s travel card, and do not make hasty decisions when buying your car.
    • If you decide to sell a residence bought on the Golden Visa plan, you should wait at least until you get a permanent residence permit (approximately 5-6 years). Otherwise, you will have to pay a 28% sales tax.

If you have already decided to apply for a residence permit or a second passport of Portugal, please apply for rapid and exhaustive consultation on all relevant matters by writing to our email address, or by any other convenient means.

If you need our recommendations on planning your trip to Portugal, we suggest the following itinerary:

Day 1: Lisbon (St. George’s Castle, Aqueduct, Basilica da Estrela, Rue Augusta).

Day 2: Lisbon suburbs (Mafra).

Day 3: Sintra (Pena Palace, Moorish castle).

Day 4: Coimbra (Torre de Anto gate, Se-Vella, and Se-Nova cathedrals).

Day 5: Douro Valley (the highlight of the trip, can be by train).

Day 6: Porto (Luis I Bridge, Ribeira district). Porto is a perfect place to stay in for one more day visiting museums.

Having received a residence permit in Portugal in 2020 by the Golden Visa program, many people get complacent and mistakenly believe that the most difficult stage is over. However, even on short visits, moreover – after becoming a resident of some country, one may feel challenged by certain situations and be at a loss without sufficient knowledge of the local transport, taxes, wages and price levels, healthcare services, and other aspects of the standard of living in the country.

To avoid unrealistic estimations and further frustration, you are welcome to ask our professional experts’ advice and cooperation, especially in matters related to taxes and fees.

We would be also glad to discuss with you all options for opening and developing your business and accounts in Portugal, find the best offer, and negotiate the most favorable terms for your property acquisition and residence permit application.

More articles can be found on our web page.

We look forward to hearing from you soon by e-mail or any other convenient means.

Stay well and safe — especially as we begin to step out of our homes again!