The year 2026 is just around the corner, and with it come concrete changes to the finances of residents in Portugal—whether local or expats. Between rising everyday costs, tax adjustments, and developments in the job market, here's what you need to know to start the year off right and plan your finances. What will the cost of living be like in Portugal in 2026? I'm Lisbob, the expat assistant, and I'm here to tell you everything that will become more expensive in Portugal in 2026.

Price Increases: It’s Not Great News

In 2026, several essential costs will rise:

Rent

Landlords can increase rents by about 2.24 %. If the last update is older than two years, they may even “catch up” on years without increases, pushing that growth up to nearly 11.34 % in some cases. There are strict rules: no update before one year after the contract is signed, and then once per year.

Telecommunications

The three main operators (MEO, NOS, Vodafone) are raising their prices in 2026. At MEO, mobile plans increase by about €0.50 from January 1, and other services (internet, TV) will follow inflation with new pricing from February.

Energy

In the regulated market, energy tariffs are increasing by about 1 %, which amounts to just a few extra cents per month for an average household.

Tolls

Some toll sections will be eliminated, but prices are rising elsewhere. On the A1 (Lisbon–Porto), for example, the toll for a light vehicle goes up to €25.05.

Public Transport and Vehicle Inspections

Monthly passes stay stable in Lisbon and Porto, but single tickets are increasing (typically €0.05–€0.15). Technical inspections for vehicles are also becoming more expensive — from a few extra cents to over one euro, depending on the vehicle type.

Health Insurance

Health insurance prices may rise significantly in 2026, as some providers plan noticeable tariff adjustments.

Income: Minimum Wage and Pensions Rising

Not everything is bad news — some incomes are rising in 2026:

The national minimum wage increases to €920 per month, up from €870 in 2025. And thanks to a mechanism called the “minimum subsistence level,” it remains completely exempt from income tax (IRS), which protects low wages.
In the public sector, the guaranteed minimum salary increases to €934.99.
Pensions also rise, but not all at the same pace. The increases are structured in brackets, with smaller increases at higher pension levels.

Taxes: Some Relief With Conditions

2026 does not bring a tax revolution, but there are notable adjustments:

Income Tax (IRS)

The IRS tax tables are slightly revalued (indexed to inflation), and the intermediate brackets (2nd to 5th) are reduced by 0.3 percentage points each. This should slightly lower the tax burden for middle incomes — especially if you are not in the very top brackets.

Deductible Expenses

The rules for deductible VAT-paid expenses have changed: now books, shows, museums and other cultural activities can be included as deductible expenses if you keep your receipts.

IMT (Property Tax)

IMT tax brackets have been revised. In practice, buying a first home at a reasonable price costs less tax, and for young people up to 35 years old, there is partial or total tax exemption on the purchase of a first home up to a certain threshold.

Economic Context

Official projections estimate moderate GDP growth of about 2.2–2.3 %, and inflation continuing to slow down to around 2.1 %. These are stable figures, but they don’t eliminate pressure on household budgets.