The 18-55 kit lens is a good performer. Check out
https://www.pentaxforums.com/forums/lens-clubs/45425-kit-lens-club.html to draw your own conclusions (note that that club includes lenses other than the 18-55).
You'll get lots of different opinions as to portrait lenses, especially regarding focal length. But you can certainly get an excellent portrait lens within your budget. (Indeed, if you're willing to delve into the world of old manual focus and even manual exposure lenses, you have loads of choice at a small fraction of your budget.) If you want a zoom lens your choices will be more limited, because for portraiture you want something fast (i.e., a lens with a large maximum aperture, indicated by a small aperture value, f/2.8 or lower) and fast zooms are expensive.