Buying Property in Lagos Portugal: A Guide to Property for Sale

Buying property in Lagos, Portugal, gives you direct access to the beautiful coastline of the Algarve region. Compared to other seasonal resorts in the area, Lagos is a working town with a year-round population, which gives it a unique charm. It is famous for its golden cliffs, stunning blue sea, and cobbled streets.

Although Lagos is one of the more expensive cities in the Algarve and Portugal, especially for real estate and rent, the cost of living in Lagos is more affordable than in other popular coastal regions like Marseille in France.

For those thinking about finding a dream property, prices significantly vary based on the neighborhood, type of property, and condition. The further the property is from the city center, the lower the total cost. This guide provides a quick overview of the Lagos, Algarve real estate market and shows how the buying process works.

Read more about:

• Why buy property for sale in Lagos?
• Best Neighborhoods to Buy Property in Lagos
• Required Documents for Buying Property in Lagos
• A Step-by-Step Guide to Buying Property in Lagos, Portugal

Why buy property for sale in Lagos, Portugal?

Lagos, in the Western Algarve, is one of the prized locations in the region and is home to some of the most outstanding beaches in Portugal. Many reasons draw investors to buy property, such as:

• High quality of life: Lagos offers an exceptional quality of life with its sunny beaches, excellent healthcare, quality international schools, and a safe, relaxed atmosphere ideal for families, retirees, and investors.
• Strategic location: The town is a true gem of the Algarve region, boasting incredible landforms and stunning beaches. Its proximity to Faro International Airport makes international travel easy and convenient, a major draw for foreign home buyers.
• Strong investment potential: According to the latest data from Property-Market Index, Portugal’s property market is expected to grow at double the rate of the US, the UK, and the rest of the EU by 2027, thanks in large part to the Algarve, among other key regions.
• High rental yields: Rental yields stand at 5.6 percent in the Algarve region, highlighting the potential of investing in the south of Portugal.
• A magnet for property investors: When it comes to Lagos Portugal real estate, the average price for property in Lagos stood at €5,066 per square meter in 2024. While this average price is higher than in other regions of the Algarve region, Lagos is one of the most popular locations to buy Portugal housing.
• Strong luxury market: In Knight Frank’s Wealth Report 2024, the Algarve is currently ranked fourth among the best-performing luxury real estate markets in the world. There is a wide selection of luxury estates, villas, and other luxury properties, with private pools and ocean views.
• Affordable property options: If you look for a property in a village a short drive inland, such as Bensafrim or Odiáxere, the prices are significantly lower, often allowing you to buy a larger home for a tight budget.

Can foreigners buy property in Lagos, Portugal?

Yes, foreigners can buy property in Lagos, Portugal. There are no restrictions on foreign ownership of real estate in Portugal, which means that citizens from any country can purchase property with the same rights as Portuguese citizens.

How to Find Property in Lagos, Portugal

In this section, we’ll arm you with some tips on how to find your dream home in Lagos. Whether you are looking for a spacious villa, an apartment close to the marina, or a great deal on commercial properties, you’ll find plenty of options when it comes to property types in and around the city of Lagos.

Define your requirements

Before you begin your search, have a clear idea of what you are looking for. A property finder in Portugal will consider your budget, desired location, and key features such as an ocean view or proximity to schools and amenities when looking for accommodations.

Commit to research

Don’t rush the research stage. Explore various houses for sale in Lagos, Portugal, to understand property prices and the types of properties available. Set up property alerts on real estate websites to stay updated on new listings. For luxury properties, you can research “villas for sale in Lagos.”

Work with property specialists

Online real estate portals are a good starting point, but they don’t replace the value of a local expert. Many real estate agents in Lagos specialize in working with international buyers. They can help you find adequate properties, arrange viewings, and provide valuable local insights.

Property viewings

Visiting properties in person can help. You can visit properties at different times of the day to get a feel for the neighborhood’s atmosphere. A real estate professional can schedule viewings to help you find the best property that meets your needs.

Navigating the legal system

A real estate lawyer can do due diligence and verify that the seller can sell the property and avoid any outstanding problems, such as debts or unpaid taxes. They will file contracts that meet the legal requirements and suggest you work with a local property surveyor in Portugal, if necessary.

Required Documents for Buying Property in Lagos, Portugal

When it comes to foreigners buying property in Lagos, it is important to ensure you have all the required documents for a smooth property purchase. We recommend working with a local real estate lawyer in the Algarve to ensure you have everything you need.

Below, you can find the key required documents for a successful property purchase.

• Photo ID: A valid form of identification that confirms your identity.
• Contrato Promessa de Compra e Venda (CPCV): The contractual agreement or deed detailing the terms and conditions of a property purchase. We recommend that the signing of this contract is officially recognized and conducted in front of a Portuguese Notary.
• Energy Certificate: This document provides details on a property’s energy efficiency and is typically provided by the seller.
• Imposto de Selo: A Stamp Duty payment is required when buying property in Portugal.
• Caderneta Predial: A document from the land registry containing property details such as location, boundaries, and registered ownership.

A Step-by-Step Guide to Buying Property in Lagos, Portugal

There are a couple of steps to take when it comes to buying property in Portugal as a foreigner. Before you begin your property purchase, you will need a Portuguese tax identification number, and it is definitely worth opening a local bank account.

Although the process is relatively simple, we suggest you work with a real estate professional and an experienced lawyer to avoid any hidden debts or costs.

When you buy a property in Portugal, you don’t just pay the price of the house or apartment. You also need to cover the property taxes that are due at the time of purchase, like Portugal’s Property Transfer Tax, Stamp Duty, and notary or registration fees.

Note: If you’re moving to Portugal as a non-EU, non-EEA, or non-Swiss national, buying property in Lagos doesn’t make you a permanent resident. You will need to apply for a temporary residency permit via the Golden Visa, D7 visa, D2 visa, or D8 (Digital Nomad Visa). After five years, you can apply for permanent residence.

Requirements for a Successful Property Purchase 

Securing a Portuguese tax identification number (NIF) and opening a local bank account are fundamental steps in the process of purchasing real estate in Lagos.

Getting your Portuguese tax identification number

Having a Portuguese tax number, known as the NIF, is essential to open a local bank account or to make any form of significant financial transactions in Portugal.

Before moving to Portugal, you can get your Portuguese tax identification number by visiting your nearest local tax office or even online. Non-EU citizens are required to appoint a fiscal representative during this process.

Opening a Portuguese bank account

While not mandatory, we highly recommend opening a bank account in Portugal to avoid hefty transaction fees. There are many different banks to consider, from international to online, and many offer mortgages to foreign buyers.

Financing Your Property in Portugal

Understanding your budget and how you are going to finance your property should be considered at the onset of your property-buying journey. Here, we provide some information about mortgages in Portugal that are available if you are searching for Lagos, Portugal homes for sale.

Get your budget straight

It’s essential to clearly define your budget that considers all expenses involved, including additional costs and taxes. If financing is necessary, it’s important to note that Portuguese residents generally need a mortgage deposit of 10 to 20 percent, whereas non-residents typically require approximately 20-40 percent of the property value as a deposit.

Financing options

You can make a one-off payment to purchase a property in Portugal. However, should you be looking for lending options to assist you with your property purchase, there are many options on the table, including BBVA, Santander, Bankinter, and Banco CTT. We recommend speaking with an expert in the field to determine the best option based on your requirements.

To get a mortgage in Portugal, you would have to reach out to banks or mortgage brokers. While residents may benefit from a wider range of borrowing options, mortgages are very accessible to non-residents as well. There are different loan-to-value ratios and interest rates, but it is certainly possible to secure a great loan.

Types of mortgages in Portugal

You have the choice between fixed-rate mortgages and variable-rate mortgages in Portugal.

• Fixed-rate mortgages: This type of mortgage comes with a premium but offers stability, safeguarding you against rate changes.
• Variable-rate mortgages: This mortgage type provides fluctuating rates tied to an indexer, usually the Euribor.
• Mixed-rate mortgages: This mortgage type will start with a fixed term before switching to a variable rate. For example, in November 2024, the Bank of Portugal reported that 76 percent of new mortgages were mixed-rate.

Lagos, Portugal, Property Taxes

Property taxes in Portugal often come at progressive rates. But different types apply to your property. In this section, we will provide a quick overview.

Taxes to consider at the time of purchase

Below, we provide information on the taxes you will pay when buying Lagos property for sale.

Property Transfer Tax (IMT)

The Property Transfer Tax varies between 0 and 10 percent. The 0 to 8 percent range is determined by factors such as the property’s price, location, type, and intended use (whether for primary residence or secondary housing). A fixed rate of 10 percent applies to buyers connected with territories that benefit from favorable tax schemes, referred to as blacklisted jurisdictions.

Stamp Duty

You will need to consider Stamp Duty on property transfer transactions in Portugal, subject to a rate of 0.8 percent.

Taxes to consider after the property purchase

Below, we outline some of the key taxes you will need to consider after purchasing your property.

The Municipal Property Tax (Imposto Municipal sobre Imóveis) is an annual tax for property owners in Portugal. Its rate varies across municipalities, typically ranging from 0.3 to 0.45 percent and, in certain circumstances, to 0.5 percent for urban properties and is set at 0.8 percent for rural ones.

It’s worth noting that IMI is calculated based on the Property Tax Value (VPT), not its purchase price. This works out nicely for you, the buyer, since the tax value is usually lower than the market value.

Additionally, if your property is situated in a rehabilitation area undergoing renovation, you may qualify for an exemption to IMI for three years, extendable to five years if the property is your primary residence.

Additional to IMI (AIMI)

For properties that are valued above €600,000, you will need to pay AIMI. There are three different brackets for this:

• For properties valued between €600,001 and €1 million: 0.7 percent tax
• For properties valued between €1 million and €2 million: 1 percent tax
• For properties valued above €2 million: 1.5 percent tax

Alongside the above details of property taxes, you will need to consider Capital Gains Tax in Portugal should you be looking to sell your property in the future.

Lagos, Portugal, Property Purchase Costs

In addition to the property cost and taxes, buying the property for sale in Lagos comes with additional costs, outlined below.

• Legal fees: €2,000-€5,000, depending on the property type, property price, and the complexities of the purchase
• Notary fees: €500-€1,000
• Land registration fees: €250

Goldcrest: How We Can Help You 

Goldcrest is a buyer’s agent that is based in Lisbon. 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, helping you with the property search and offering insightful expertise and strategic advice.

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 market, we work solely on behalf of our client 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 Portuguese property market. We have cutting-edge technology and metasearch tools at your disposal to provide full market coverage, ensuring the best investment choices and negotiated prices.
• Network of partners: We have a close network of partners, including 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.