Latest news and stories about cost of living in finance in Portugal for expats and residents.
Soaring housing costs are forcing households to share single properties, with extremes of up to six families under one roof, while many workers are taking on additional employment — including third jobs — to meet rent and mortgage bills. The situation points to a shortage of affordable accommodation, rising pressure on the local property market and public services, and wider impacts on health, education and the labour market.

According to the Observatory for Energy Poverty, 15.7% of Portuguese households do not have the financial means to keep their homes warm.
Financial literacy is based on a very simple premise: the higher an individual's level of financial education, the more informed and effective their decisions tend to be throughout life. This relationship between knowledge and the quality of choices ceased long ago to be merely intuitive and is now widely recognised by organisations ...
Pensioners will see slightly higher net payments from this month after routine inflation adjustments and new IRS withholding tables were applied; simulations show, for example, a gross €1,000 pension could yield roughly €27 more net. The change reflects updated income‑tax (Imposto sobre o Rendimento das Pessoas Singulares or IRS) withholding rates rather than a direct benefit increase. Pension recipients should check payslips to confirm new net amounts.
The IRS withholding tables are government-published schedules used by employers, pension payers and other payers to calculate how much personal income tax (personal income tax (Imposto sobre o Rendimento das Pessoas Singulares) — IRS) must be deducted from each pay period. They take into account gross pay, pay frequency, marital status and dependents; updates (usually published annually or when the budget changes) affect your monthly take-home pay and are reconciled with your annual tax return (Modelo 3).

Soaring rental costs and a shortage of affordable housing have pushed many Portuguese families to take in unrelated flatmates or move into shared accommodation as their only viable option.
House rents per square metre rose by 4.9% in December 2025 compared with the same month in 2024 and recorded an average annual change of 5.3% over the whole of last year.

The Finance Minister will be at next week's annual meeting of the World Economic Forum in Davos, and will use the presence of policymakers and investors to 'sell' the progress the national economy has made in recent years. In remarks to ECO, Joaquim Miranda Sarmento highlights this year's event theme, ...

In Lisbon, Vitória lives with her boyfriend and her daughter in a three-bedroom flat shared with another family — a mother who has two daughters. In Porto, Gabriela sleeps in the same room as her two 16-year-old daughters. There are increasing cases of families sharing homes.

Portugal faces a mixed outcome from the EU–Mercosur trade agreement. Export-oriented sectors such as wine, olive oil and cheese see expanded market access to Argentina, Brazil, Paraguay and Uruguay as growth opportunities, while domestic meat and rice producers fear increased competition, downward price pressure and quota-driven market disruption. The deal thus creates winners and losers within Portugal’s agricultural and food industries, highlighting the need for safeguards, support measures and sectoral adaptation strategies.
Update: The trade agreement between the European Union and Mercosur is due to be signed this Saturday. The impending signature has intensified debate in Portugal: wine, olive oil and cheese sectors are positioning to capture growth in the four South American markets, while meat and rice producers renew warnings about heightened competition, downward price pressure and quota effects. Stakeholders are pressing for concrete safeguards, transitional support and clear implementation timetables to mitigate adjustment costs and protect sensitive domestic producers.

Economist João Rodrigues de Santos warns that a public guarantee scheme is encouraging young people to take on mortgages with high repayments and minimal financial headroom, just as Portugal faces major international uncertainty. With wages among the third‑worst in the EU, the end of pandemic-era supports and the prospect of rising interest rates, many borrowers — including first-time buyers and expats — are exposed to rapid financial distress. The combination of weak income growth, a heated property market and policy incentives to lend underestimates downside risks; the commentator argues for tighter underwriting, better safety nets and targeted borrower support to reduce systemic vulnerability.
Update: The economist reiterated in a CNN Portugal piece that the public guarantee is actively pushing young buyers into mortgages with high repayments and little buffer amid heightened international uncertainty. He highlighted that the withdrawal of pandemic-era supports and the prospect of rising interest rates mean many borrowers — notably first-time buyers and expatriates — could rapidly fall into financial distress, strengthening his call for stricter underwriting standards and targeted safety nets to contain systemic risk.

Is there a crisis in the restaurant industry? Between declines in consumer spending and rising costs, restaurants are under severe pressure. Chefs and restaurateurs are speaking out. “I foresee a very difficult 2026,” says Rui Paula.

The price of standard diesel at the pump is expected to be around €1.56 per litre.

Home News Will Spotify price increase affect Portugal? Will Spotify price increase affect Portugal? The music streaming platform has once again increased the prices of its monthly plans.

ECO reports the Euribor moved higher for the three‑ and six‑month tenors while the 12‑month rate fell; the three‑month rose to 2.033%, the six‑month to 2.143% and the 12‑month stood at 2.248%. These short‑term oscillations can influence variable‑rate mortgages and refinancing costs in the weeks ahead. Mortgage holders and prospective buyers should check loan indexation clauses and lender notices for immediate impacts.
Euribor (Euro Interbank Offered Rate) is the benchmark interest rate at which European banks lend to one another and is widely used as the reference for variable‑rate mortgages in Portugal. Changes affect monthly payments directly: the recent figures reported were 2.034% (3‑month), 2.104% (6‑month) and 2.255% (12‑month), so a rising Euribor typically increases costs for borrowers with tracker or variable loans.

Diário de Notícias and Correio da Manhã report the Portuguese government describes the long‑running EU–Mercosur agreement as an economic opportunity, while domestic producers and farming groups urge Brussels to proceed cautiously to protect local sectors. The coverage highlights continuing divisions over market access, environmental and regulatory safeguards after 25 years of negotiation. Exporters and agricultural businesses should monitor EU negotiations and any safeguards that may affect competitive conditions.

Mercosur is the South American trade bloc (Southern Common Market) whose main founding members are Argentina, Brazil, Paraguay and Uruguay. An EU–Mercosur trade agreement — which the story says may be approved and signed soon — would reduce tariffs and open markets on both sides, affecting agricultural and industrial trade flows and therefore prices and business opportunities relevant to residents and companies in Portugal.

Mercosur is the South American trade bloc (Southern Common Market) whose main founding members are Argentina, Brazil, Paraguay and Uruguay. An EU–Mercosur trade agreement — which the story says may be approved and signed soon — would reduce tariffs and open markets on both sides, affecting agricultural and industrial trade flows and therefore prices and business opportunities relevant to residents and companies in Portugal.

Dinheiro Vivo reports that buying a house in metropolitan and tourist areas in Portugal can be up to seven times more expensive than elsewhere, with Lisbon averaging around €650,000 and other hot spots like Madeira and Faro also well above national norms. The data underline stark regional price divergence that affects affordability and relocation choices. Those searching for housing should factor in significant local premiums and consider suburban or inland alternatives.
Housing prices in Portugal are highest in Lisbon and many coastal areas (notably parts of the Algarve), often two to three times more expensive than interior regions, while Porto and other coastal cities sit in between and inland areas can be much cheaper. Nationally the typical price per square metre is lower than the EU median, while Lisbon is pricier than most Portuguese regions but still generally cheaper than central Paris or London, so prospective buyers should compare city, coastal and interior markets before deciding.

Portuguese reporting indicates a sharp rise in monthly fees at some care homes — increases of roughly €500 — driven largely by a persistent labour shortage and higher operating costs. The hikes are prompting families to withdraw elderly relatives, intensifying pressure on informal care networks and raising equity and access concerns for vulnerable patients. Economically, the trend highlights how rising labour costs and constrained staffing can be passed directly to users in minimally regulated markets, with implications for social policy, funding models and workforce recruitment/retention. Separately, French coverage notes a demobilisation of farmers’ protests in Paris, underscoring a wider context of labour and sectoral tensions across services and primary production.

Official reporting says average house rents rose 5.3% in 2025, with the largest regional increase in Madeira (6.9%). The rise will matter most to tenants and those searching for rentals — renters should expect continued pressure on budgets and factor increases into housing searches and lease negotiations.

INE confirmed annual inflation eased to 2.3% in 2025, a 0.1 percentage‑point drop from 2024; food was the largest contributor to price increases over the year. The data come from the Consumer Price Index as compiled by the National Institute of Statistics (Instituto Nacional de Estatística or INE). For residents balancing household budgets, slower headline inflation may ease pressure but food-price rises mean grocery bills remain important to monitor.
The INE is Portugal's National Statistics Institute (Instituto Nacional de Estatística), and its housing price index measures changes in residential property prices used by policymakers, lenders and markets. That index—published regularly with monthly and quarterly releases for different housing statistics—helps legislators assess price trends and justify measures when prices are rising steadily.
The Consumer Price Index (CPI) is a statistical measure that tracks the average change over time in the prices paid by households for a fixed basket of goods and services. Portugal’s statistics office (INE) reported the CPI rose by 2.3% last year (0.1 percentage points less than in 2024), and this figure helps expats understand changes in cost of living, rent indexing and adjustments to wages or benefits.
The National Institute of Statistics (National Institute of Statistics (Instituto Nacional de Estatística, INE) is Portugal’s official body for collecting and publishing data on population, economy and travel; it reported that trips by residents abroad rose 21.9% year-on-year to 975,000 in Q2 2025. Expats can use INE data for planning travel, business decisions or understanding tourism trends in Portugal via its website and published bulletins.

Reports claim more than 700,000 homes are currently empty in Portugal, with many left off the market because owners feel insecure and others needing renovation. Coverage highlights both market and structural issues that keep properties unused. For expats looking to buy, rent or renovate, this signals opportunities in some areas but also warns of renovation costs and local regulatory or fiscal hurdles.

New data from Portugal's Survey on Living Conditions and Income show one region has the country's highest incidence of monetary poverty, with 17.9% of residents living below the poverty threshold. Analysts and local actors attribute the rise to a combination of state neglect, insufficient social-protection measures, the growth of precarious immigration and unstable work, and wider cost-of-living pressures — factors that together depress incomes and worsen social indicators. The figures point to a need for targeted regional policies on social security, employment quality and integration to reverse the trend.

Presidential candidate André Pestana said Portugal should prioritise domestic social and environmental needs rather than increased defence spending, declaring he does not want “a single euro more for NATO”. He argues the fight should be against low wages and pensions, environmental degradation and the deterioration of public services, and proposes that funds currently transferred to private health providers be redirected into the National Health Service (SNS), claiming a large share of the state health budget is going to private companies.

Housing prices have risen to levels that many describe as obscene, driven by a mix of constrained local supply, strong demand, low borrowing costs and investor activity. The resulting price inflation has undermined affordability, altered living choices and intensified regional disparities in property markets. Policy responses and planning changes will be central to cool inflation and expand accommodation options in affected areas.

Nuno Leal, co‑CEO of Doutor Finanças, says the tax measures in the government’s housing plan — due to be debated in Parliament on Friday — should help increase supply in the market. He concedes the package tends to favour property owners and landlords but considers it “relatively balanced”, noting the measures are centred on those who hold property while aiming to ease supply constraints. The assessment focuses on likely effects on rental supply and owner incentives rather than specific legislative detail.

Economist Vera Gouveia Barros argues that the most effective element of the Construir Portugal programme is tax relief on rentals, citing an ‘almost mechanical effect’ from a proposed 10% autonomous IRS rate for rents up to €2,300. She suggests this tax cut will directly influence rent levels and landlord behaviour, with likely quick transmission into the market. However, the package omits a dedicated room‑rental option — a gap that could limit lower‑cost housing supply and options for students, workers and expats. Barros’ analysis implies policymakers should pair fiscal incentives with targeted measures for small‑unit and shared accommodation and monitor market adjustments to avoid unintended rent inflation or supply imbalances.

During a heated parliamentary debate, Prime Minister Luís Montenegro warned that moderation in residential property prices — for both buying and renting — is inevitable after what he described as recent 'risky measures.' He framed the policy changes as drivers of a market correction, signalling likely cooling pressures on affordability and activity in Portugal’s housing market and prompting renewed scrutiny of government housing and economic policy.

JP Morgan analysts Aditya Chordia and Matteo Mamprin assign a roughly 50% probability that Moody’s will upgrade Portugal’s sovereign credit rating at its scheduled review in May, putting an upgrade within about four and a half months. The bank’s view reflects an assessment that Portugal’s improving economic fundamentals, fiscal position and lower borrowing costs have materially strengthened its credit profile, reducing downside risks. An upgrade as soon as May would tighten financing spreads, reinforce investor confidence and mark another step in Portugal’s long post‑crisis recovery; market participants should monitor sovereign metrics and rating signals in the run‑up to the review.

Real-time analytical coverage of financial markets and economic developments on 6 January, including market moves, key data releases and macro indicators. Commentary focuses on consumer confidence and cost pressures, investor sentiment and flows, implications for investors and expat households, and the significance of today’s indicators for policy and markets.

A wave of policy and market changes due to take effect in 2026 will raise the cost of housing for Portuguese households and alter incentives across the sector. Measures affecting rents, mortgage lending rules and tax treatment of construction and property are set to impact owners, tenants and prospective buyers, with knock-on effects for affordability, market dynamics and the state budget. The package will reframe public incentives and regulatory risk for investors and households alike, requiring households and professionals to reassess financing, renting and development decisions.

A rise in the guaranteed national minimum wage to €920 gross per month, together with higher employer Social Security contributions, will raise labour costs by about €866 a year for each worker on the minimum wage. The increase reflects both direct pay and associated employer charges and will squeeze firm margins — particularly in low-margin sectors — with potential knock‑on effects on prices, hiring decisions and informal employment. Policymakers and businesses will need to weigh targeted support, phased implementation or productivity measures to offset the impact on competitiveness and employment.


Portugal Resident •