Cost of Living Comparison: Israel vs. Portugal
Portugal, Europe’s westernmost country, annually attracts a diverse group of tourists and expatriates who choose it as their destination for relocation, retirement, or extended visits. The country’s rich history, stunning beaches, and unique cities are among its main attractions. Life in Portugal moves at a gentle pace, allowing you to slow down, absorb the atmosphere, and truly relax.
Most notably, beyond its beaches and climate, Portugal’s most attractive feature is its highly accessible average cost of living, particularly when compared to Israel, the United States, and Northern European countries. While Portugal offers affordable living, it doesn’t compromise on quality of life. However, careful budget planning is essential as living costs naturally vary according to your lifestyle. The key is striking a balance that allows you to both save money and enjoy life in the country simultaneously.
In this article, we’ll explore Portugal’s cost of living, covering various aspects of international living that you should be aware of.
What is the Cost of Living in Portugal? Comparison and Data
Portugal is recognized as having the lowest living costs in Western Europe. From food prices to rental costs, everything is relatively affordable compared to other European countries. According to the international cost comparison website Numbeo, Portugal’s average living costs are 29.2% lower than France and 27.5% lower than Germany, excluding housing costs.
Comparing living costs between Spain and Portugal, Spain’s average cost of living is 4.4% higher than Portugal’s (excluding housing costs), particularly in major cities like Madrid, the Spanish capital. However, living costs will vary depending on your lifestyle and expenses. It’s important to consider your income, financial situation, and spending habits. When you do so, you’ll find that Portugal’s quality of life compared to any other foreign country is exceptionally affordable.
Cost of Living Comparison: Israel vs. Portugal
Summary of Living Costs in Israel:
- Estimated monthly costs for a family of four in Israel are €3,297.2 (13,619.2 ILS) excluding rent
- Estimated monthly costs for a single person in Israel are €936.2 (3,867.0 ILS) excluding rent
- The cost of living in Israel is, on average, 42.6% higher than in Portugal
- Rent in Israel is, on average, 9.7% higher than in Portugal
In Portugal:
- Estimated monthly costs for a family of four are €2,364.7 excluding rent
- Estimated monthly costs for a single person are €671.3 excluding rent
Housing Costs in Portugal
Note that in recent years, Portuguese real estate has experienced cost increases, somewhat narrowing the previously more significant gap in rental prices compared to Israel. However, the rate of increases has recently moderated.
Portugal’s lower housing costs make property purchase often a better choice than renting. In 2023, the average asking price per square meter in the Lisbon metropolitan area is €4,061, while in the Porto metropolitan area, it’s €3,291. You’ll find more accessible property prices in Portugal’s central, northern, and Alentejo regions.
Mortgages in Portugal
Both residents and non-residents can obtain mortgages from Portuguese banks through a straightforward application process. Mortgages are a common way to finance real estate investment in Portugal, with many banks offering various options. Mortgage rates in Portugal start at 3.3% annually based on a 30% loan-to-value ratio. Rates vary if you need more credit, for example, 60% or 70% loan-to-value ratio. Additionally, fixed rates are available at 4.1% for periods up to five years based on a loan-to-value ratio of up to 70%.
Restaurant and Service Pricing Tables in Portugal
Portuguese cuisine offers not only exceptional flavors but also remarkable value for dining out compared to what we’re accustomed to in Israel. Below is a comprehensive breakdown of restaurant costs in Portugal. Of course, as in any country, you’ll find high-end establishments and luxury venues with significantly higher prices, but this table represents typical costs you’re likely to encounter:
| Restaurants | Price | Range |
|---|---|---|
| Meal at an inexpensive restaurant | € 10.00 |
7.00 |
| Dinner for two, mid-range restaurant, three courses | € 40.00 |
30.00 |
| McDonald's meal (or equivalent) | € 8.00 |
7.00 |
| Local beer (0.5 liter draft) | € 2.50 |
1.20 |
| Imported beer (0.33 liter bottle) | € 3.00 |
2.00 |
| Cappuccino (regular) | € 1.82 |
0.80 |
| Coke/Pepsi (0.33 liter bottle) | € 1.62 |
1.00 |
| Water (0.33 liter bottle) | € 1.16 |
1.00 |
This pricing guide helps illustrate why Portugal has become increasingly popular among those seeking high-quality dining experiences at reasonable costs. The combination of traditional Portuguese cuisine, fresh ingredients, and affordable prices makes dining out a particularly attractive aspect of life in Portugal. While these prices represent averages in typical establishments, you can find both more budget-friendly local restaurants (especially in smaller towns) and high-end dining experiences in luxury establishments, particularly in tourist areas and major cities like Lisbon and Porto.
Grocery and Household Shopping Prices in Portugal
One of the most significant advantages of living in Portugal comes from supermarket prices, and it’s not just about the cost! The raw ingredients available in Portuguese supermarkets will likely transform your post-relocation diet into something healthier and more delicious due to the pricing structure. Moreover, you’ll discover that the ingredients are notably fresher and of exceptionally high quality.
| Markets | Price | Range |
|---|---|---|
| Regular Milk (1 liter) | € 0.93 |
0.80
|
| Fresh White Bread (500g) | € 1.36 |
0.70
|
The price difference also often leads expatriates to naturally adopt more aspects of the Mediterranean diet, which is central to Portuguese cuisine. This typically includes more fresh vegetables, olive oil, fish, and seasonal fruits – all of which are both more affordable and fresher in Portuguese markets than what you might be used to in other countries.
Transportation Costs and Options in Portugal: A Practical Guide
While public and private transportation costs aren’t significantly cheaper than other European countries, there are some notable differences worth understanding. Ride-hailing services like Uber and Bolt offer very competitive prices, and while public transportation costs are similar to Israel, the system is generally more efficient and reliable than what you might be familiar with in Israel.
| Markets | Price | Range |
|---|---|---|
| Regular Milk (1 liter) | € 0.93 | 0.80 1.15 |
| Fresh White Bread (500g) | € 1.36 | 0.70 2.53 |
| White Rice (1kg) | € 1.38 | 1.00 2.00 |
| Regular Eggs (12) | € 2.74 | 1.80 3.60 |
| Local Cheese (1kg) | € 10.11 | 6.00 20.00 |
| Chicken Breast (1kg) | € 6.85 | 3.50 9.00 |
| Ground Beef (1kg) | € 11.96 | 7.99 17.00 |
| Apples (1kg) | € 2.01 | 1.00 3.00 |
| Bananas (1kg) | € 1.27 | 1.00 2.50 |
| Oranges (1kg) | € 1.60 | 1.00 3.00 |
| Tomatoes (1kg) | € 2.21 | 1.00 3.00 |
| Potatoes (1kg) | € 1.47 | 0.72 2.50 |
| Onions (1kg) | € 1.75 | 1.00 2.96 |
| Lettuce (1 head) | € 1.37 | 0.71 2.30 |
| Water (1.5 liter bottle) | € 0.70 | 0.28 1.50 |
| Local Beer (0.5 liter bottle) | € 1.13 | 0.70 2.00 |
| Imported Beer (0.33 liter bottle) | € 2.09 | 0.95 4.00 |
| Cigarettes 20 Pack (Marlboro) | € 5.50 | 5.00 6.00 |
| Mid-Range Wine (Bottle) | € 4.58 | 3.00 8.00 |
Monthly Bills and Subscriptions in Portugal: A Practical Overview
Here too, there aren’t any particularly groundbreaking price differences compared to what we’re familiar with in Israel. However, let’s break down the costs and understand what you’re getting for your money:
| Monthly Utilities & Subscriptions | Price | Range |
|---|---|---|
| Basic Utilities (Electricity, Heating, Cooling, Water, Garbage) for 85m² Apartment | € 117.35 |
80.00 |
| Mobile Phone Monthly Plan with Calls and 10GB+ Data | € 19.12 |
12.00 |
| Internet (60 Mbps+, Unlimited Data, Cable/ADSL) | € 38.08 |
30.00 |
Regarding basic utilities, the costs can vary significantly based on several factors. In Portugal, many homes rely on electric heating rather than central heating, which can impact winter bills. However, the mild climate often means lower overall heating and cooling costs compared to more extreme climates.
For mobile phone plans, Portugal offers competitive packages from several providers like MEO, Vodafone, and NOS. These plans typically include EU roaming benefits, which can be particularly valuable for those who travel frequently within Europe.
Internet services in Portugal are generally reliable and modern, with fiber optic coverage expanding rapidly in urban areas. Many providers offer bundle deals combining internet, TV, and phone services, which can provide better value than individual subscriptions.
It’s worth noting that while these prices might seem similar to Israeli costs, the service quality and coverage, particularly for internet and mobile services, is often very good in Portugal, even in more rural areas. Additionally, many providers offer special deals and discounts for new customers or long-term contracts.
the costs of fitness and leisure activities in Portugal
| Sports and Leisure | Price | Range |
|---|---|---|
| Fitness Club Monthly Fee, One Adult | € 37.16 |
25.00 |
| Tennis Court Rent (1 Hour on Weekend) | € 12.92 |
7.00 |
| Cinema, International Release, One Seat | € 7.50 |
6.50 |
Fitness Club Memberships: The average monthly fee of €37.16 typically includes access to modern facilities with standard equipment. Many Portuguese gyms offer flexible membership options, including off-peak rates that can be more economical. The quality of facilities varies significantly between budget gyms (around €25) and premium health clubs (up to €58), with higher-end establishments often including additional amenities like swimming pools, spa facilities, and group classes within the membership fee.
Tennis and Sports Facilities: The weekend rate of €12.92 per hour for tennis courts reflects the general pricing for recreational sports facilities in Portugal. Many municipalities also maintain public courts and sports facilities at even lower rates. During weekdays, these rates often drop by 20-30%. Some sports clubs offer membership packages that can make regular play more economical.
Cinema and Entertainment: The cinema ticket price of €7.50 represents standard pricing for international releases, though you’ll find numerous ways to reduce this cost. Many theaters offer discount days (typically mid-week), student rates, and loyalty programs. Portuguese cinemas generally show films in their original language with Portuguese subtitles, particularly in urban areas, making them accessible to English speakers.
Beyond these specific activities, Portugal offers many free or low-cost leisure options that aren’t reflected in these prices. The country’s extensive coastline provides free beach access, and many cities maintain excellent public parks and cultural spaces. During summer months, you’ll find numerous free outdoor cultural events, concerts, and festivals that can significantly enhance your leisure options without impacting your budget.
Children's Education Costs: A Detailed Overview
The cost of private education in Portugal can indeed reach substantial levels. It’s worth considering integration into local educational systems while supplementing children’s international exposure through summer camps or extracurricular activities. Let me break this down in detail:
| Childcare Services | Price | Range |
|---|---|---|
| Private Preschool/Kindergarten, Full Day, Monthly, One Child | € 428.17 |
300.00 |
| International Primary School, Yearly, One Child | € 9,941.82 |
5,500.00 |
Understanding the Portuguese Education System and Costs:
Early Childhood Education (Ages 3-5): The private preschool cost of €428.17 monthly reflects full-day care with educational components. However, Portugal offers public preschool options (jardim de infância) that are significantly more affordable or even free for residents. These public facilities maintain good educational standards and help children integrate into Portuguese society naturally.
Primary Education (Ages 6-15): The annual cost of €9,941.82 for international schools represents a significant investment. This pricing typically includes:
- English-language instruction
- International curriculum (often IB or British)
- Smaller class sizes
- Additional language support
- Modern facilities and resources
Alternative Educational Approaches:
Public Education Integration: Portuguese public schools are free and offer several advantages:
- Natural language immersion for children
- Cultural integration opportunities
- Social connections within the local community
- Strong academic standards, particularly in mathematics and sciences
- Additional Portuguese language support for foreign students
Hybrid Solutions: Many families opt for a balanced approach:
- Enrolling children in Portuguese public schools
- Supplementing with private language tutoring
- Participating in international summer programs
- Engaging in extracurricular activities that maintain connections to their home culture
Cost-Effective Strategies:
- Language Support: Instead of full international school tuition, consider investing in private language lessons (€20-40 per hour) to maintain native language skills.
- Cultural Programs: Many cities offer weekend cultural programs in various languages at a fraction of international school costs.
- Summer Opportunities: International summer camps (€300-800 per week) provide intensive language and cultural experiences while maintaining primary education in the public system.
- Extra-Curricular Activities: Sports clubs, music schools, and art programs often offer instruction in English or other languages, providing additional international exposure without the full cost of private education.
How Much Do Clothes Cost in Portugal?
Note that Portugal offers numerous sales opportunities and outlet locations, such as the Freeport Fashion Outlet near Lisbon. However, if you don’t make an effort to find deals, you’ll encounter higher prices at shopping malls and brand-name stores. Here’s a detailed breakdown of clothing costs:
| Clothing & Footwear | Price | Range |
|---|---|---|
| Pair of Jeans (Levi's 501 or similar) | € 76.37 |
25.00 |
| Summer Dress (Chain Store like Zara, H&M) | € 34.13 |
20.00 |
| Nike Running Shoes (Mid-Range) | € 75.39 |
47.00 |
| Men's Leather Business Shoes | € 86.02 |
49.00 |
Understanding Shopping in Portugal:
Shopping Strategies and Options:
Portugal offers diverse shopping experiences that can significantly affect what you pay for clothing. The key to managing clothing costs lies in understanding the various retail channels available:
Outlet Shopping: The Freeport Fashion Outlet near Lisbon represents one of the best opportunities for finding brand-name clothing at reduced prices. These outlets typically offer discounts of 30-70% off regular retail prices. Similar outlets can be found near other major cities, offering year-round deals on both local and international brands.
Regular Retail: Standard retail prices in shopping malls and city centers tend to be comparable to other Western European countries. Major international chains like Zara, H&M, and Primark maintain similar pricing structures across Europe, though seasonal sales can offer significant savings.
Local Markets and Smaller Shops: Many Portuguese cities have local markets and smaller boutiques that often offer better prices than major retail chains. These can be excellent sources for both casual wear and traditional Portuguese textiles.
Seasonal Sales: Portugal has two major sale periods:
- Winter sales (January-February)
- Summer sales (July-August) During these periods, discounts can reach up to 70% off regular prices, making it an ideal time for major clothing purchases.
Smart Shopping Tips:
- Timing Your Purchases: The end of each season offers the best deals, particularly for seasonal items like winter coats or summer wear.
- Loyalty Programs: Major retailers often offer loyalty cards that can provide additional discounts and early access to sales.
- Online Shopping: Portuguese online retailers frequently offer better prices than physical stores, plus the convenience of home delivery.
- Price Comparison: Due to the significant price ranges shown in the table, it’s worth comparing prices across different stores and outlets before making larger purchases.
- Quality Considerations: While budget options are available, Portuguese consumers often prioritize quality over price, particularly for shoes and business wear, as these tend to offer better value over time.
Rent: A Major Monthly Expense in Portugal
The rental market in Portugal requires careful navigation, especially for newcomers. It’s essential to physically visit and get a feel for different neighborhoods before committing to a rental, as prices and living conditions can vary significantly even within the same area. Here’s a detailed breakdown of the rental landscape:
| Monthly Rent | Price | Range |
|---|---|---|
| Apartment (1 bedroom) in City Centre | € 945.04 |
600.00 |
| Apartment (1 bedroom) Outside of Centre | € 721.38 |
450.00 |
| Apartment (3 bedrooms) in City Centre | € 1,660.05 |
1,000.00 |
| Apartment (3 bedrooms) Outside of Centre | € 1,203.90 |
800.00 |
Key Challenges for Foreign Renters:
Security Deposits and Guarantees: Foreign renters face unique challenges in Portugal due to their lack of local credit history and guarantors. Landlords often require:
- Higher security deposits (typically 2-3 months’ rent)
- Cash payments upfront
- Sometimes additional guarantees or longer advance payments This is primarily because newcomers lack the local credit history and personal references that Portuguese landlords traditionally rely on.
Understanding the Local Market:
Location Considerations: The significant price variations between city centers and outlying areas reflect more than just location. Important factors include:
- Access to public transportation
- Proximity to schools and amenities
- Building age and condition
- Neighborhood safety and character
Negotiating the Rental Process:
Documentation Requirements: To improve your chances of securing a rental, prepare:
- Proof of income (employment contract or bank statements)
- Passport and residence documentation
- NIF (Portuguese tax number)
- References if available, even from other countries
Finding Local Rates: To access better rental prices, consider:
- Working with local real estate agents who know the market
- Building connections in the community
- Using Portuguese rental websites and apps
- Joining local expat groups for insider information
- Considering short-term rentals initially while exploring neighborhoods
Long-term Planning: Understanding that initial rental costs might be higher for foreigners, consider:
- Budgeting for larger upfront payments
- Planning for a possible transition to better rates after establishing local history
- Building relationships with local property managers or agents
- Considering areas slightly outside the most popular expat zones for better value
Property Purchase Prices in Portugal: A Detailed Analysis
The table below provides a rough estimate of property prices, but it’s crucial to understand that prices can vary significantly based on the specific city, neighborhood location, and property type. Let me break this down to give you a complete picture:
| Property Purchase Prices | Price | Range |
|---|---|---|
| Price per Square Meter to Buy Apartment in City Centre | € 3,392.63 |
2,000.00 |
| Price per Square Meter to Buy Apartment Outside of Centre | € 2,240.40 |
1,300.00 |
Understanding Property Prices in Context:
Let’s consider what these numbers really mean for potential buyers. For example, if you’re looking at a typical 80m² apartment, you might pay:
- In the city center: approximately €271,410 (80m² × €3,392.63)
- Outside the center: approximately €179,232 (80m² × €2,240.40)
Key Factors Affecting Property Prices:
Geographic Variations: The prices vary significantly between different Portuguese cities. For instance:
- Lisbon tends to have the highest prices, particularly in historic districts
- Porto follows as the second most expensive market
- Smaller cities and coastal towns often offer better value
- Interior regions typically have the most affordable properties
Property Characteristics: Several factors can influence the price beyond location:
- Age of the building
- Presence of an elevator
- Parking availability
- Views (especially river or ocean views)
- Floor level
- Renovation status
- Energy efficiency rating
Market Considerations:
Current Market Dynamics: The Portuguese property market has seen significant changes in recent years:
- Steady price increases in major urban areas
- Growing interest from international buyers
- Development of new luxury properties in prime locations
- Renovation of historic buildings in city centers
Investment Potential: Different areas offer varying investment opportunities:
- Urban regeneration zones may offer tax incentives
- Tourist areas can provide rental income potential
- Up-and-coming neighborhoods might offer better value appreciation
- Historic centers often have strict renovation guidelines but high tourist appeal
Practical Considerations for Buyers:
Purchase Process: Understanding the buying process is crucial:
- Legal requirement for a Portuguese tax number (NIF)
- Importance of working with a reputable real estate agent
- Need for a local lawyer to review contracts
- Various taxes and fees to consider (IMT, stamp duty, etc.)
Additional Costs: Beyond the purchase price, buyers should budget for:
- Property transfer tax (IMT): varies from 0% to 8%
- Stamp duty: 0.8% of the purchase price
- Notary and registration fees: approximately 1%
- Real estate agent fees: typically 5%
- Annual property tax (IMI): varies by municipality
Salaries and Financial Landscape in Portugal
| Salaries and Financing | Amount | Range |
|---|---|---|
| Average Monthly Net Salary (After Tax) | € 1,096.78 | Not Available Not Available |
| Mortgage Interest Rate (%), 20 Years Fixed Rate | 4.60% |
1.68% |
Understanding Portuguese Salaries:
The average monthly net salary of €1,096.78 requires some important context to understand fully. This figure represents the nationwide average, but actual salaries can vary significantly based on several key factors:
Geographic Variations:
- Lisbon and Porto generally offer higher salaries than other regions
- Tech hubs and international companies typically pay above the national average
- Coastal tourist areas might offer seasonal variation in income opportunities
Industry and Role Differences: The technology sector tends to offer higher salaries, often 30-50% above the national average, while traditional industries might offer lower compensation. For example:
- IT Professionals: €1,800-3,500 net monthly
- Teachers: €1,200-1,800 net monthly
- Service Industry: €800-1,200 net monthly
- Management Positions: €2,000-4,000 net monthly
Understanding Portuguese Mortgages:
The mortgage rate of 4.60% (with a range of 1.68% to 5.43%) reflects the current lending environment in Portugal. Let’s break down what this means for potential homebuyers:
Mortgage Structures:
- 20-year fixed rates provide stability in monthly payments
- Variable rates might offer lower initial payments but carry more risk
- Most Portuguese banks offer up to 80% financing for residents
- Non-residents typically receive different terms, often with higher rates
Qualification Requirements: To help you understand the mortgage process, here’s what banks typically look for:
- Monthly mortgage payments should not exceed 35% of net monthly income
- Proof of stable income or employment
- Clean credit history
- Additional insurance requirements
Making Sense of the Numbers:
To put these figures in perspective, let’s consider a practical example: For a €200,000 property with a 20-year mortgage at 4.60%:
- Monthly payment would be approximately €1,270
- Total interest paid over the loan term would be about €104,800
- This represents roughly 116% of the average annual salary in monthly payments
Cost of Living Context:
To better understand how these salaries work in practice, consider that:
- A family of four might need €2,500-3,000 monthly for comfortable living
- A single person might need €1,500-2,000 monthly in a major city
- These figures include rent/mortgage, utilities, food, and basic expenses
This helps explain why many Portuguese households often have multiple income earners and why location choice is crucial for financial planning. The relatively low average salary compared to other Western European countries is partially offset by lower living costs in many areas, though this balance is changing in major cities.
Expense Distribution According to Our Statistical Model:
