What is Cost of Living Index? Definition & Guide
A numerical measure that compares the relative expense of living in different locations, covering housing, food, transportation and healthcare.
A cost of living index assigns a numerical score to a city or country based on the prices of goods and services relative to a reference point, usually New York City (index = 100) or the national average. Categories measured include housing, groceries, transportation, utilities, healthcare and entertainment.
For investment migration planning, the cost of living index helps applicants estimate their ongoing expenses after relocation. A country with a low Golden Visa investment threshold but a high cost of living may not be cheaper overall than a country with a higher investment minimum but lower daily expenses.
Numbeo is the most widely referenced source for consumer cost of living data. The OECD and the Economist Intelligence Unit also publish comparative data. As of 2025, Portugal scores approximately 45 on Numbeo's index (with New York at 100), Greece approximately 42, and Hungary approximately 38. The United States overall averages approximately 70.
The index does not capture all costs relevant to Golden Visa holders. Property taxes, private health insurance, international school fees and travel costs for minimum stay requirements are not included in standard cost of living calculations.
Why It Matters for Golden Visa Applicants
Understanding the cost of living in your target country prevents financial surprises after relocation. A €250,000 Golden Visa investment in Greece looks attractive, but ongoing costs determine whether the move is sustainable long-term. Applicants should compare their current US expenses against the destination's index, factoring in items not captured by standard indices: private health insurance, international school tuition and annual trips to meet minimum stay requirements.
Example
"Lisbon's cost of living index of 45 (versus New York's 100) meant the family's monthly expenses dropped from $8,000 to approximately $4,500 after relocating."