Buying Property in Portugal: Your 2025 Guide

Increased demand amongst foreign investors and expats has sparked a boom in the Portuguese property market. With 300+ days of sunshine a year, a high standard of living, a thriving property market, and excellent education and healthcare, buying property in Portugal has proved irresistible in recent years.

Foreign buyers enjoy the same rights as Portuguese citizens when it comes to buying and owning property in Portugal, and the buying process is largely straightforward, two of the many perks of snapping up your dream home here.

In this complete guide to buying property in Portugal, we’ll provide you with key insights for you to buy with confidence, delving into the process, locations, taxes, and tips for an easy purchase.

Why buy property in Portugal?

Portugal’s real estate market has experienced significant steady growth and has become an attractive and profitable investment option in recent years. Factors such as the country’s stable economy, affordable prices, and high quality of life have contributed to its appeal among both domestic and foreign buyers.

Ten reasons to buy property in Portugal 

1. An investment in a dynamic, growing real estate market with significant investment return potential. Rental yields stand at 6.8 percent for the Greater Lisbon Area and 6.6 percent for the Greater Porto Area. 
2. Low cost of living compared to other countries in Western Europe
3. Excellent climate with incredible summers, and mild winters
4. Robust infrastructure, with world-class education and healthcare services  
5. A safe place to live – seventh safest country in the world, according to the Global Peace Index – and with a high level of political stability
6. The Portuguese, in general, speak excellent English (Portugal places sixth on the Global English Proficiency Index, ahead of Denmark, Germany, and South Africa) 
7. Incredible and diverse gastronomy (Lisbon holds the crown for Europe’s best culinary city)  
8. Cultural and recreational activities galore, and a world-class location for surfing and golfing
9. Festivals and events throughout the year 
10. No restrictions on foreign property ownership

Can you buy property in Portugal as a foreigner?

The short answer is yes! One of the great aspects of Portugal is that there are no restrictions for foreigners looking to purchase a home in the country. The Portuguese government actively encourages foreigners to invest in real estate in Portugal. Non-Portuguese nationals will have the same rights as locals when it comes to buying and owning property, including land, with the property buying process designed to be easy to navigate and transparent, making it straightforward for international buyers to buy property in the country.

Can US Citizens buy property in Portugal?

Yes, buying property in Portugal as an American is totally possible and you will face no restrictions. The Portuguese government encourages foreign property ownership in Portugal, although you will need to get a Portuguese NIF number and, as a US citizen, you will need to have a fiscal representative. If you would like to live in the country for more than three months (in a six-month period), you will need to get a residence permit.

Where to Buy Property in Portugal

Portugal offers a range of beautiful locations for expats and foreign investors seeking to buy property in Portugal. The perfect spot for you will depend on your lifestyle preferences, budget, and investment goals. 

Firstly, determine which area of Portugal appeals to you. Each region and city will have its own unique charm and perks, so take the time to ensure you get to know the country and the diverse range of locations on offer. Here are some of the best places to consider.  

Lisbon  

Lisbon, the Portugeuse capital, manages to blend innovation and tradition together perfectly. This mesmerizing city effortlessly embraces the past and the present, enchanting all who grace its streets.

From the cobbled streets of Alfama to the dynamic neighborhood of Baixa, with boutique shopping and buzzing nightlife, you’ll find something for any buyer. Families should consider Estrela, with its wide open parks ideal for spending time outdoors. You also have Parque das Naçōes, with its futuristic cable cars, top-quality restaurants spilling out on the street, and fabulous views of the River Tejo.

You can consult our article, Buying Property in Lisbon, for more information.

Algarve  

Does the Algarve need any introduction? This sublime part of southern Portugal is renowned for its stunning coastline, golden beaches, and excellent climate. It has become somewhat of a mecca for tourists, expats, and retirees seeking a sunny, beachside lifestyle. Particularly in peak tourism season, the coastal towns in the region come alive with internationals from all over the world seeking a slice of the Algarve.

Besides its natural beauty, the Algarve offers world-class golf resorts, charming fishing villages, and a lively social scene. Areas like Faro, Albufeira, and Lagos are particularly popular among property buyers.

If you are thinking about moving to the Algarve, it shouldn’t take you long to settle in. There is an array of activities to get involved in, such as water sports, yoga classes, and cooking classes, where you’ll be able to get to know fellow expats.

As with any other part of Portugal, foreign nationals can buy property in the Algarve without any restrictions, enjoying the same purchasing rights as Portuguese citizens. However, it’s crucial to understand local legal requirements, including necessary documentation and legal procedures to ensure a smooth transaction. For prospective buyers considering the Algarve, our article, Buying Property in Algarve, Portugal, has you covered, running over the intricacies of how to buy in Southern Portugal.

The second biggest city of Portugal, Porto, has evolved quite drastically over the years, now competing with Lisbon as the country’s most talked-about city. Yes, Porto can certainly hold its own, with its charming narrow streets, fabulous riverside restaurants and cafes, and boutique stores.

If you are looking for beautiful beaches, you’ll find many close to Porto and many activities to get involved in, such as surfing, yoga, or even cooking classes. Both local and foreign investors will find long-term rentals to be an attractive option, with many students, remote workers, and young professionals creating demand for this type of accommodation in the city, leading to high rental yields.

If you are considering buying Portuguese property in this charming city, our article, Buying Property in Porto, Portugal, will provide you with everything you need to know.

Cascais  

Located just a short drive from Lisbon, Cascais is a charming coastal town that has become synonymous with luxury living.

Its beautiful beaches, excellent restaurants, and thriving cultural scene make it a favorite among affluent residents and tourists alike.

Cascais also boasts top-notch golf courses (Penha Longa Resort golf course is a must-visit for keen golfers), marinas, and a relaxed ambiance, making it an ideal place for those seeking a more refined and laid-back lifestyle.

You can find out more in our article, Buying Property in Cascais. 

The Silver Coast  

The Silver Coast in Portugal is a captivating region renowned for its pristine beaches, historic towns, and vibrant culture. Situated on the Western Coast between Lisbon and Porto, the Silver Coast is characterized by rugged cliffs, golden sands, and charming fishing villages.

If you are looking for a more authentic part of the country, to truly enjoy the local life and embrace staggeringly beautiful landscapes, then the Silver Coast could be the place for you.

If you’re thinking about buying property in this area, look into Nazaré, where you’ll find stunning beaches and world-famous surfing waves, a favorite among expats. Óbidos offers a picturesque medieval setting with a vibrant local culture. Peniche is another great option, famous for its fishing heritage, rugged coastline, and some of the best surfing spots in Europe.

This list is by no means exhaustive, other stand-out locations include the Alentejo, with its green rolling hills, Comporta and Melides, for luxury properties in the heart of nature, and the autonomous islands of Madeira and the Azores.

Where to Look When Buying Property in Portugal

What is the best way to go about finding your ideal property in Portugal? The real estate market in Portugal is fragmented and there is no one place like a Zillow Portugal to find all the properties available, which can make the process of going it alone, using online sites, difficult.

As such, when buying property in Portugal as a foreigner, it’s always a good idea to consult with an experienced real estate professional. A property expert will provide full market access in addition to making the process of buying a home in Portugal much easier, guiding you from sourcing your ideal property through to acquisition. They will also answer any questions you may have, such as the pros and cons of buying property in Portugal.

Bear in mind that a strategic move can be to work with a buyer’s agent. This is because, in Portugal, real estate agents work on behalf of the seller. Working with a buyer’s agents means that there is no conflict of interest, as they work solely on behalf of you, the buyer.

Required Documents to Buy Property in Portugal

What documents do I need to buy property in Portugal?

• NIF number: Tax identification number
• Photo ID: A valid identification document that verifies your identity. This can be a passport or Portuguese ID card (Cartão de Cidadão)
• Contrato Promessa de Compra e Venda (CPCV): The buying contract or property deed that outlines the terms and conditions of the property purchase.
• Portugal Energy Certificate: This document provides information about the energy efficiency of the property and must be presented to you by the seller.
• Imposto de Selo: The stamp duty payment, which is a tax required by the Tax Authority for property transactions.
• Caderneta Predial: The land registry certificate that contains information about the property, including its location, boundaries, and registered owner. The land registry certificate, issued in paper format, serves as evidence of the legal status of a property as of the date of issuance. The land registry certificate compiles and describes the current registrations applicable to that property.

We recommend working with an independent lawyer who will be able to assist you with determining the documents you need. Lawyers will also complete thorough due diligence on your property, and conduct legal and title checks, to avoid any hidden issues.

Getting a NIF number

To purchase property in Portugal, whether you are a resident or non-resident, you will need to have a Portuguese tax number (NIF). This is a tax number that is crucial for buying property in Portugal, opening a bank account, or making financial transactions in Portugal. If you are a non-EU citizen, you will need to have a tax representative in Portugal to get a NIF.

Opening a Portuguese bank account

It’s advisable to open a bank account to avoid fluctuations in exchange rates that could cost you financially.

Step by Step: How to Buy Property in Portugal

Buying a house in Portugal can be tricky, particularly if you don’t speak Portuguese or are unfamiliar with the buying process. Fortunately, the procedures are not too tricky in Portugal, with less paperwork than in other countries and no restrictions on foreign buyers.

• Step 1: Financing your property – Assess your finances and work out whether you want to take out a mortgage and what plan works for you while also making sure you understand the associated costs, such as property taxes.
• Step 2: Finding your dream property – Set a budget, research properties online, and consider location, amenities, and rental potential.
• Step 3: Making an offer and negotiation – Make an offer and negotiate with the seller to reach a mutual agreement.
• Step 4: Reservation Agreement and Promissory Contract (CPCV) – Pay a reservation fee, sign the Promissory Contract with a deposit, and review the terms carefully.
• Step 5: Sign the Escritura (Final Deed) – Sign the Final Deed in front of a Notary, pay the remaining balance and fees, and officially become a property owner in Portugal.

We strongly recommend having a real estate professional to help you secure your ideal home and assist with the negotiation phase, a lawyer to ensure all legal requirements are met, and a mortgage broker, to help you find the best deal for you. With these three experts to guide you, you are well on the way to a successful purchase!

Property Purchase Costs

In addition to the payment for the property and the associated fees, you should be aware of the following additional costs when buying properties in Portugal.

• Legal fees: A lawyer will cost you approximately €2,000-€5,000, depending on the type of property, the price, and the complexities of the purchase.
• Land Registry Fee: There is a public fee for the Land Registry, amounting to €250.
• Notary Fees: Notary fees will cost you around €500-1,000.

Financing a Property in Portugal

Acquiring a new property, especially abroad, requires focus and careful observation when it comes to financing your property.

Mortgages in Portugal

Getting a mortgage, either from a Portuguese bank or one at home and using the property itself as a guarantee against defaulting, is a more common option than a one-off payment.

There are more than 15 Portuguese banks that provide mortgages for foreign buyers looking to invest in Portuguese property. Mortgage terms usually range from 3 to 30 years. To be eligible, you will need to:

• Have a solid credit history in order to have your loan approved.
• Have proof of a solid income, which you will need to show through pay slips or tax returns to show you can manage monthly mortgage payments.
• Be aged above 18. While there is no statutory maximum for obtaining a mortgage, banks usually set their own limits, often requiring the mortgage to be fully paid by the time the owner reaches 70-80 years old.

For residents in Portugal seeking a mortgage, a deposit or down payment typically falls between 10 percent and 20 percent. On the other hand, non-residents looking for a mortgage usually require a deposit of approximately 20-40 percent. Consulting with a mortgage broker can provide further guidance on this matter.

How to Finance a Property in Portugal

Before thinking about buying a property in Portugal, you should reflect on what finances you have available to purchase real estate and how much you want to invest. It’s important to find a safe balance between savings (if you already have the full amount, that simplifies the equation) and the need to finance part of the costs.

If you decide on monthly installments, be aware that these should not exceed 35-40 percent of your monthly net income, just to be on the safe side.

When it comes to how to actually buy your property, there are several options on the table:

1. One-off payment: This option, pagamento a pronto, in Portuguese, involves paying the wholesale price of the property to the seller in one go, normally via a bank check that you hand over when you sign the property deed

2. Mortgage loans: Getting a mortgage is a very common way of securing financing for a property in Portugal.

3. Mortgage subrogation: If there is an outstanding mortgage on the property from the previous property owner, you can change the name of the debtor to your own name, taking on all the rights and responsibilities and making you the new mortgage payer.

Before making an offer on a property, it’s advisable to determine the maximum mortgage amount you can secure. This will give you a clear understanding of how much you can afford, ensuring your budget aligns with your financing options.

Property Taxes in Portugal

When it comes to buying properties in Portugal, you will need to be aware of your tax obligations that you will need to pay that will fall at time of purchase and on an annual basis.

Property Purchase Tax/Property Transfer Tax (IMT)

IMT (Imposto Municipal sobre as Transmissões Onerosas de Imóveis ) varies from 0 to 10 percent and is levied over the purchase price of the property. This tax needs to be paid at the time of puchase.

The 0 to 8 percent range depends on the price, location, property type, and purpose for which the property will be used, for instance, whether it will be used as your permanent residence or secondary housing. The 10 percent rate applies in cases where the buyer has connections with territories that benefit from favorable taxation schemes, known as blacklisted jurisdictions. When calculating the Property Purchase Tax (IMT), the following criteria are taken into consideration:

Stamp Duty (Imposto do Selo)

Stamp Duty, is one of the oldest state taxes and an additional transaction cost for property buyers on real estate transfers. The rate for purchasing a property in Portugal is 0.8 percent of the value of the property or the deed’s total value and must be paid at the time of purchase.

Municipal Property Tax (IMI)

IMI (Imposto Municipal sobre Imóveis) is an annual tax, determined by the municipality. The IMI is levied on the Property Tax Value (VPT) and not on the property price paid upon purchase. For urban properties, the IMI rate ranges from 0.3 to 0.45 percent of the VPT, which can increase to 0.5 percent in some instances. The IMI rate applied for rustic buildings is 0.8 percent.

AIMI Tax (Additional to IMI Tax)

AIMI is charged on real estate assets owned by natural or legal Portuguese residents who own properties with a high Tax Asset Value (VPT) of more than €600,000. AIMI can be calculated as follows:

• 0.7 percent tax on owning property valued between €600,001 and €1 million
• 1 percent tax on property valued between €1mil and €2 million
• 1.5 percent tax on property if its total value is above €2 million

The €600,000 threshold applies individually. If the property is jointly owned with your partner, AIMI will only apply if the property’s value exceeds €1.2 million.

Capital Gains Tax

When you sell your Portuguese property, any capital gain from the sale may be taxable. Capital gains refer to the profit made from the property’s sale. Capital Gains Tax is levied on property sales in Portugal, and the amount you pay depends on your residency status.

Capital Gains Tax is levied differently for Portuguese residents and non-residents who sell property in the country. For Portuguese residents, the tax on capital gains is only levied on 50 percent of their whole capital gain.

When your real estate capital gain is added to your other yearly income, taxation will take effect. It may range from 14.5 percent to 48 percent, depending on the income tax scale rates, with the income tax rate determined by your earnings. Non-residents are taxed at a rate of 28 percent and on the full amount of the capital gain from the property sale.

Portuguese Capital Gains Tax on real estate is based on the real estate added value, which is the amount obtained by subtracting it from the property’s sale value. The Capital Gains Tax rate is applied to this result.

Inheritance tax

There is no Inheritance Tax in Portugal. However, a 10 percent Stamp Duty will apply to the assets passed on as inheritance. Spouses, descendants, and ascendants inheriting said assets are exempt from paying the Stamp Duty fee.

Portugal Buying Property: Can I buy a property in Portugal with crypto?

Yes, in Portugal, it is now possible to purchase a property using Bitcoin, with the country having attractive policies and regulations for crypto investors.

Is it worth buying property in Portugal for rent?

Buying a property in Portugal is a good financial investment in 2025, whether you are looking for capital appreciation or renting out your property for long-term gains. Rental yields continue to increase year-on-year in many key areas of the country. At the moment, there is more demand for accommodation than what is currently available in many hotspot locations— especially in Lisbon and Porto.

Renting versus Buying Property in Portugal

While there is no right or wrong answer to this – it will depend completely on your personal situation and budget – buying property is the better financial option in the long term. Renting a place while you search for the perfect property to buy is also a good idea so that you have a base to explore neighborhoods or areas of the country.

Is there a real estate bubble in Portugal?

The Portuguese economy has experienced a steady increase following the financial crisis and recession. The boom in tourism and a thriving housing market are key indicators of this recovery. Currently, major cities are experiencing a surge in demand for property that surpasses the available supply, resulting in a significant uptick in property prices.

Many factors are needed to create a property bubble, mainly banks not financing property and no construction taking place. As banks are still providing financing and construction is still taking place, this is not the case in Portugal. If you shop smart when seeking your ideal property for sale in Portugal, you should still be able to get great deals and affordable investment opportunities ripe for the picking– if you know where to look. 

Goldcrest: How We Can Help You Secure Your Dream Home

Goldcrest is a buyer’s agent that is based in Lisbon, Porto, and the Algarve. We provide expert, impartial advice on real estate investments and how to buy property in Portugal. From scouting out the perfect property through to property acquisition, we have you covered throughout the process.

If you are looking to purchase property in Portugal, don’t hesitate to get in touch. Our team of skilled experts is available to solve all your real estate doubts, offering insightful expertise and strategic advice. We also provide comprehensive after-sales services and can assist with property set-up and property management, amongst other services.

What’s more, with our residency and citizenship division, Global Citizen Solutions, we are your one-stop-shop for all things related to residency, citizenship, and setting up your NIF number in Portugal. Why not book a non-binding call with us today to find out more about your options?

Why choose Goldcrest?

• Local knowledge: With offices located across Portugal, our presence nationwide allows us to assist you personally across the country.
• Independent service: As an independent buying agent, we do not represent any development or project. Our service is entirely tailored toward each individual client, providing you with everything you need to secure the perfect property at the best possible price. As an impartial advisor on the real estate market, we work solely on behalf of our clients and provide a service tailored to your needs and requirements.
• Streamlined process: Our real estate agents speak English and Portuguese, and our service is completely focused on providing you with a hassle-free buying experience, saving you time.
• Experienced team: Our expert real estate team has a vast local knowledge of the real estate market. We have cutting-edge technology and metasearch tools at our disposal to provide full market coverage, ensuring the best investment choices and negotiated prices.
• Network of partners: Our network of contacts includes lawyers, property management services, builders, architects, designers, and landscape gardeners, again saving you time and hassle by providing you with trusted experts in their field of work.