Real cost of living on the Algarve

Hi all

New to this forum and hoping for some guidance!

We are currently living and working in Hong Kong but the plan in the next couple of years is to retire to the Algarve.

The one thing we can't seem to agree on is what is a sensible budget for living!

The idea would be to buy a property outright with savings so it is really just a guide on day to day living costs!

Thanks so much in advance!


Hello Jen,

Welcome on our forum.

Take the time to read:
- Guides located under the "discover" tab
- Old discussions that you can even filter using the magnifying glass located next to your avatar.

Most of your questions have probably been debated many times. … tugal.html

Hi Jen,

Why Algarve? Portugal has lower budgeting options, such as in Center and Alentejo, much less touristic, but with good quality of living, and also with english expats living there.

Please see these Youtube Channels: 1.OK Portugal, 2.Cindy Vine, 3.Our Portuguese Homestead

1. "OK Portugal": UK couple who bought a farm near Fundão, Center Portugal.
At the Youtube Channel OK Portugal, please see episode #35 Quinta do Ancinho -The Marsh Family Homestead who are originally from the UK. They described here why they moved to Portugal just over 4 years ago and bought a property in Center of Portugal, instead of choosing Algarve.

2. "Cindy Vine": Cindy bought a farm near Castelo Branco a couple of days ago. She described in detail her journey from Norway to Portugal, having this goal in mind. All the process of buying a farm... pros and cons of each one, and why did one of the farms touched her heart.

3. "Our Portuguese Homestead": Eco-sustainable life in the Center countryside with a young couple from Netherlands.

Please also read one of my previous answers in "Portuguese possibilities" discussion/topic here in this forum, two weeks ago.

These are just suggestions, look by yourself and find the best place that suits better your purposes of living.  :)

I could echo the OP's question.
I know there are sites offering cost comparisons on such things as a pint of milk or a loaf of bread but I too would be interested to know what the national and local taxes are for rubbish collection etc, and the Council Tax, as it's called in the UK.
Personally I'm looking to the Algarve for mild(er) winters, vicinity of the sea, and a degree of expat integration possibilities.
I'm sure the inland north is wonderful but for the first two factors I mentioned above it  immediately disqualifies itself for me.
I had enough damp and rain while living in the UK; I have had enough of the cold, humid winters in northern Italy. In my future decades I want sunshine, milder winters and the ocean on my doorstep.

The Council Tax as it is called in UK, means IMI in Portugal (IMI, imposto municipal sobre imóveis), which means Council Property Tax and assumes different values in different municipalities, since each municipality has autonomy to define its rate. It is the main tax for a property owner.

Despite the freedom granted to local authorities, IMI rates are governed by law and may not exceed certain limits pre-defined by the Central Government.

The tax is applied on all urban property (for housing, industry, commerce or services) and rustic property (land outside urban centres that is not for construction and that is used for agriculture, as well as warehouses/other constructions related to agricultural activity).

IMI rates are reviewed every year and may change, both in an increasing and a decreasing way. You should check each year what rate applies in your municipality.

To reach the final value and find out how much tax you will pay, you will also have to multiply the IMI rates defined by your municipality for that year by the value that the Finance Government Department settle for the property (patrimonial tax value or VPT), usually lower than what you have payed by your property.

What is present in the VPT calculation:
To calculate the VPT it is necessary to multiply different values. The calculation formula is as follows:

VPT = Vc x Ab x Ca x Cl x Cq x Cv.
The abbreviations indicated in the formula mean:

Vc - Base value of the buildings built;
Ab - Gross construction area added from the excess area to the implantation area;
Ca - Coefficient of the purpose for which the building is intended, for example, commercial activity or housing;
Cl - Location Coefficient;
Cq - Quality and comfort Coefficient;
Cv - Aging Coefficient (age of the property)

Eg. An appartment of VPT = 100000 eur in Albufeira (rate 0,3), has IMI = VPT * Council Rate = 300 eur/ yearly.

Check Council Rates for all municipalities at:
(Choose first letter of your municipality at TAXAS DE IMI POR CONCELHO section)

In 2020, these Council Taxes range from 0.3% to 0.45% for urban buildings and 0.8% for rustic buildings.

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