Hmm, you could write pages on that question but keeping it brief and from my family’s experience:
The basic cost of living is cheaper but not by as much as you think, certain things tend to be a lot more expensive than here in the UK (bread & veg for example) whereas others are much cheaper (meat). As a very rough guide from what my mum told me is if your weekly shop in the UK was £40 then it will be approx €40 in Corfu, not an exact science I know but it gives an idea. It’s also worth remembering that it is much much cheaper to eat out. My Mum bought a big freezer for winter and stocked up at LIDL in Corfu Town, this saved them loads and has proved to be a really good idea, there is an English Store in Corfu Town but as Eggy pointed out be prepared to pay a premium for this items you know and love as they are specially imported, a pack of 40p crumpets was over €2, tasted damn good though. English bacon was my other vice but that was quite reasonable especially in summer as all the tourists demand it for their “Full English”.
If I remember this correctly you pay a set tax to live on the island and I believe this includes your water charge and road tax, memory is a little hazy on this. Your house will have en electricity meter which either you or your landlord will read, as a rule fuel is cheaper than back home but in Winter these houses do not retain heat so be prepared for high heating costs, I know people who have diesel heating systems and the costs to run this over a cold winter can be as high as €1000, my Mum and Paul have a real open fire which has saved them a lot but they only heat one room all day and use radiators in the bedroom at night. Bear in mind much like back in the UK prices are going up all the time, especially property.
When you put things side by side it is cheaper to live in Corfu but a lot of the conveniences we have here are missing, never underestimate how much we take 24hr supermarkets for granted these days. On the flip side you have the sense of community in Corfu so if you are stuck for something there is always somebody to help. My Mum and Paul love it and don’t regret it for a second, the pace of life suits them perfectly, it would still be a little but to quiet for me but perhaps some day in the future. I hope this helps a bit, any other questions please ask.
