Updated: October 7, 2024

 

Boasting one of the finest coastlines in the world, Portugal’s incredible Algarve region never ceases to amaze. With its gorgeous beaches, endless electric blue skies, and panoramic ocean views, countless expats have been settling down in this famous Portuguese region for decades now. 

For those considering snapping up their dream property in the Algarve, Lagos comes highly recommended. In this article, we’ll provide you with everything you need to know about buying property in Lagos Portugal . 

Why Lagos?

Lagos PortugalLagos, in the Western Algarve, stands out as one of the prized locations in the Algarve, home to some of the stand-out beaches in the region and surrounded by jaw-dropping landforms, such as the Benagil Caves and Ponte de Piedade, in addition to an array of incredible properties, from swish villas to modern apartments, many of which come with outrageous views of the Atlantic Ocean. 

With a rich history, where you can see insights into the past in the Medieval Castle of Lagos, and Moorish influences all over the region, quaint villages close by, each with their own local customs, and close proximity to Faro and its international airport, making overseas travel incredibly easy, Lagos stands out as a true gem of the Algarve.  

Can foreigners buy property in Lagos?

Foreign investors and expats will face no restrictions when purchasing property in Lagos or elsewhere in Portugal. We do recommend working with property experts and securing the services of a real estate lawyer to assist you with the purchase, to ensure a streamlined process that considers any legal restrictions that you may not be aware of. 

It’s worth emphasizing that securing one of Portugal’s valid visa options is essential for those intending to reside permanently or visit frequently after purchasing property in Lagos or elsewhere in the country. Popular residency options include the D7 Visa, the Golden Visa, and the Digital Nomad Visa. 

Key reasons to buy property in Lagos

In all the Algarve region, Lagos is one of the most stunning, with a range of properties to suit any buyer profile. 

Below are some of the key draws of buying a property in Lagos. 

  • High quality of life: In Lagos, it is very easy to live a high quality of life. Whether you are seeking a place to move to with your family, to retire, or a property investment, you won’t be disappointed by what Lagos can offer. The relaxed pace of life in Lagos is infectious, where you can enjoy endless sun-filled days by the beach throughout the year.
  • Excellent education options: There are 12 international schools in the Algarve, with two located in Lagos, the Barlavento International Primary School and the Vale Verde International School. 
  • Easy access to healthcare: You will find three main hospitals in the Algarve, with one located in Lagos. There are also several private clinics with almost all healthcare practitioners having good command of English. 
  • Safety: Portugal was ranked as the seventh safest country in the 2024 Global Peace Index. When it comes to Lagos, the city is a very safe destination. 
  • Stunning beaches: Beach lovers will be spoilt for choice when it comes to finding a beautiful beach. Some of the best include Praia Dona, Ana Meia Praia, Praia do Porto de Mos, Praia do Canavial, and Praia do Camilo. 
  • Water sports galore: For water sports enthusiasts, there is probably no better place to be, and surfers can enjoy the waves in Sagres, a little to the west. 
  • World-class golf courses and other activities: Keen golfers will find countless golf courses close at hand, while yoga, tennis, and countless other sports and activities can also be found here, making it easy to live an active lifestyle and spend valuable time with your family or meet other expats. 
  • Invest in a strong real estate market: As a top tourist destination and a favorite with expats, you can expect a strong return on your investment. 

Real Estate Market in Lagos

Marina-Lagos-PortugalWhen it comes to Lagos Portugal real estate, the average price for property in Lagos stood at €4,476 per square meter in 2023. While this average price is higher than in other regions of the Algarve region, Lagos is one of the most popular locations to buy. Note also that this average price is the asking price, and the sales price is often significantly lower than this. Also, bear in mind that property in the city center and property with ocean views tends to be more expensive. Should you look outside the city center and further inland, you will find prices fall. 

You will also find a wide selection of luxury estates and luxury properties in and around Lagos, many of which come with private pools and stunning ocean views. 

Rental yields stand at 5.6 percent in the Algarve, highlighting the investment potential of investing in the south of Portugal. 

Out of all the Algarve region, Lagos has become one of the most sought-after. Should you be looking to buy land for sale in Lagos, Portugal, this is also an option. Buying plots of land is the best way to build your dream home from scratch, turning your vision into reality.  

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

Now that you have an overview of Lagos, in this section, we’ll provide a comprehensive outline of the key steps to buying property in Portugal.

As we’ve mentioned, for a hassle-free purchase process, we highly recommend that you work with a real estate professional and an experienced lawyer.

Before you begin your property purchase, you will need to get a NIF number, and it is definitely worth opening a Portugeuse bank account (see the next section for more information).

Step

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Step 1: Secure financing for your property

Assess your finances, explore mortgage options from Portuguese banks, and understand associated costs such as taxes, legal fees, and property registration expenses.

Step 2: Find the perfect property

Set a budget and research the Portuguese real estate market, focusing on location, amenities, and rental potential. Seek guidance from real estate professionals like buyer's agents or real estate agents.

Step 3: Make an offer

Once you find a suitable property, negotiate an offer with the seller, potentially facilitated by a real estate professional. Consider having a buyer's agent representing your best interests during negotiations.

Step 4: Reservation Agreement and CPCV

After an offer is accepted, a Reservation Agreement may require a refundable fee. The Promissory Contract (CPCV) finalizes the promise of acquiring real estate between the two parties and includes a deposit to secure the transaction. We recommend that the signing of the CPCV is officially recognized and conducted in front of a Notary. 

Step 5: Signing the Escritura

The Escritura, or Final Deed, officially transfers property ownership. Signed before a Notary, it involves paying remaining balances and fees. After signing, the buyer becomes the official owner, concluding the process.

You will also need to pay the property taxes that are required at the time of purchase. Should you be looking to relocate to Portugal and are a non-EU, non-EEA, or non-Swiss national, you will also need to consider residency options.

Requirements for a Successful Property Purchase 

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

Getting your Portuguese NIF number

Having a Portuguese tax number, known as the NIF, is essential to open a bank account or to make any form of significant financial transactions in Portugal. You can get your NIF number by visiting your nearest tax office or even get your NIF online before moving to Portugal. 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 transaction fees. There are many different banks to consider, from international banks to online banks, and many offer mortgages to foreign buyers.

Required Documents for Buying Property in Lagos

When 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 lawyer who specializes in real estate 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. 

How to Find Property in 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 or an apartment close to the marina, you’ll find plenty of options when it comes to property types in and around the city of Lagos.  

Define your requirements  

When looking for the perfect property in Portugal, you’ll want to have a clear idea of your requirements and budget. When you have defined both, you can then begin your search. 

Take into consideration whether you want an ocean view, if you need to be close to the school should you be moving with family, where the closest restaurant or supermarket is, and so on. Alongside this determine what is essential to have and what would be nice to have. This will help you narrow down your search in a logical way. 

Commit to research 

When it comes to finding houses for sale in Lagos, Portugal, don’t stint on the research stage. Research the real estate market in Lagos to understand the ballpoint figures for property prices, the type of properties on the market, and so on. You can also set up property alerts to keep up to date with the property market in the Western Algarve.  

Work with property specialists 

lagos portugal real estateYou’ll discover numerous real estate agents in Lagos catering to international buyers. While online real estate portals and websites provide market insights and can be a good starting point, nothing surpasses the value of local expertise and professional guidance. Having an experienced real estate agent or buyer’s agent by your side can greatly simplify navigating Porto’s property market. 

The knowledge of real estate agents in Lagos, Portugal, can prove to be instrumental in identifying properties matching your criteria, and their assistance can significantly streamline the buying process. They can assist in setting up property viewings and provide insights into the property that you may not have considered. They can also provide a market analysis of the property, evaluate property prices, and determine investment potential. 

It’s essential to understand that Portuguese real estate agents represent sellers and earn higher commissions with higher sales, meaning that there is a conflict of interest. In contrast, buyer’s agents, such as Goldcrest, work exclusively for the buyer, striving to negotiate the most favorable prices and the best property based on their requirements. 

Property viewings  

Buying property is a major investment, and you’ll want to ensure that you exhaust the market to find the property that meets your exact requirements. Make sure that you visit as many properties in Lagos as possible, visiting both in the daytime and nighttime, as neighborhoods can have a different vibe depending on when you visit. As we’ve mentioned, real estate professionals will be able to schedule viewing on your behalf. 

Navigating the Portuguese legal system 

We can’t stress enough the importance of working with an experienced real estate lawyer to ensure you will face no issues with the property purchase. They will be able to assist with due diligence to ensure that the seller has the legal right to sell and that there are no issues with the property, such as outstanding taxes. Make sure that you fully commit to due diligence, working with a property surveyor in Portugal if required. 

Take a look at our guide to buying property in the Portugal to kickstart your journey!

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Buying Property in Lagos Pitfalls

If you’re considering investing in property in Lagos, Portugal, it’s important to be aware of the potential pitfalls that could arise. Without the guidance of a real estate attorney, agent, or buyer’s agent like Goldcrest, you might encounter various challenges: 

  • Legal complications related to property title deeds or existing debts could result in lengthy legal battles 
  • Failing to account for additional expenses beyond the listed price, such as mortgage costs, property taxes, notary fees, and registration expenses, can catch you off guard 
  • Being unaware of local regulations or tax laws that may lead to fines 
  • Investing in a location that doesn’t align with your lifestyle needs or deliver the anticipated return on investment 
  • Unexpected issues like zoning changes or environmental concerns might impact the property’s value or intended use 

When seeking Lagos property for sale, relying on the expertise of a buyer’s agent or experienced local real estate professional will help you find your dream property and help you navigate these complexities of buying property effectively, help you understand the nuances of property purchases in Portugal, and avoid potential setbacks.  

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. 

Get your budget straight 

It’s essential to clearly define your budget that considers all expenses involved, including additional fees 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 30 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. 

Securing a mortgage in Portugal entails reaching out to banks or mortgage brokers to obtain an initial estimate. Residents benefit from a wider range of borrowing options compared to non-residents, who encounter distinct criteria. 

Generally, non-residents should anticipate a 30 percent deposit and factor in aspects such as the Loan-to-Value (LTV) ratio, typically set at around 70 percent. 

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. Bear in mind that non-residents face a capped LTV ratio of 75 percent. 
  • Variable-rate mortgages: This mortgage type provides fluctuating rates tied to an indexer, usually Euribor. 

Property Tax 

When buying property in any country, you’ll need to be aware of the real estate taxes that you will need to pay both at the time of purchase and on an annual basis. In Portugal, this is no different.  

In this section, we’ll provide you with an overview of the taxes that you will need to bear in mind when buying property in Lagos. 

Taxes to consider at the time of purchase 

Below, we provide information on the taxes that you will need to pay at the time of purchase. 

Property Purchase Tax (IMT)  

This 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 that you will need to consider after you have purchased your property. 

Municipal Property Tax (IMI) 

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 mil: 0.7 percent tax  
  • For properties valued between €1 mil and €2 mil: 1 percent tax  
  • For properties valued above €2 mil: 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. 

You can find out more about property taxes in Portugal, in addition to taxes on rental income, in our article: Property Taxes in Portugal 2024: An Overview. 

Property Purchase Costs 

In addition to the property cost and taxes, there are additional property purchase costs, outlined below. 

  • Legal fees: €2000-€5000, depending on the property type, property price, and the complexities of the purchase  
  • Notary fees: €500-€1,000
  • Land registration fees: €250  

Is it worth buying property in Lagos?

Buying-property-in-Lagos-PortugalAs one of the most desirable locations to snap up property in the Algarve, Lagos is a good investment. Retirees will find a charming place to enjoy their golden years, being able to enjoy a relaxed pace of life and an active lifestyle, while families looking for a better quality of life will find excellent international schools and an environment where it’s very easy to make time for spending quality family time together.  

For investors, given the popularity of the region for tourists and, increasingly those looking for long-term rentals here, properties provide an excellent opportunity to secure a nice return on your investment. 

With a wide array of property types available, all the amenities you could want are close at hand, and nature galore, look no further. Lagos can certainly deliver. 

Finding Properties in Lagos, Portugal

In all the Algarve region, Lagos has quickly become one of the most sought-after locations, with its gorgeous beaches, stunning landforms, and abundance of incredible properties with sweeping ocean views.

From families looking for a spacious home and seeking a higher quality of life to retirees looking for the ultimate retirement spot to relax in style, Lagos looks set to continue to increase in popularity in the future. With a blossoming expat population, you will easily be able to establish your network here.

If you are looking to buy a property in Lagos, you should bear in mind that the real estate market is fragmented, and there is no one website or platform to find all the listings. As such, working with real estate professionals can help no end to make sure you have complete access to all the properties on the market. Alongside this, they will be able to assist you in pinpointing specific locations, shortlist properties, and organize property viewings.

Bear in mind that real estate agents in Portugal work on behalf of the seller. Buyer’s agents, on the other, work on behalf of the buyer, ensuring that their interests are protected, negotiating the best price possible for the property and guiding you through the entire property buying process and beyond.

Discover Your Dream Property with Goldcrest

Goldcrest is a buyer’s agent based in Porto, Lisbon, and the Algarve. As the first buyer’s agent in Portugal, we have helped hundreds of expats settle down in Portugal or invest in the Portuguese real estate market. 

From scouting out the perfect property through to property acquisition, we have you covered throughout the process and beyond. With access to more properties, including those that you will not find on any website, we can help you find the perfect property for sale that meets your exact requirements. We know that no two clients will have the same requirements when it comes to finding houses in Lagos, which is why we provide a completely tailored approach, working with you to discover your ideal property.  

Our team of skilled experts is available to cater to all your real estate needs, offering insightful expertise and strategic advice. 

Contact us today! Book a complimentary call with us! 

Frequently Asked Questions about Buying Property in Lagos Portugal

Lagos, Portugal, offers affordable living costs compared to many European cities, with reasonable rent, food, and entertainment expenses. While properties are more expensive than in other parts of the Algarve region, they remain reasonable when compared with equivalent properties in other Western European countries.

When it comes to property, the average price was €4,476 per square meter in 2023. While this average price is higher than in other regions of the Algarve region, Lagos is one of the most popular locations to buy. Note also that this average price is the asking price, and the sales price is often significantly lower than this. 

Yes, Lagos, Portugal, in the Western Algarve, is an excellent place to live, boasting a vibrant culture, beautiful beaches, great weather, and a welcoming expat community. All the Algarve region boasts a high quality of life that has seen expats from across the world seek out this incredible part of Portugal. 

Apartment prices in Lagos, Portugal, vary based on location, size, and amenities. The average price for an apartment was €4,444 per square meter in 2023. Note that this average price per square meter is the average asking price, and the sales price is usually lower than this, although, in some situations, it can also be higher.  

Yes, foreigners can buy property in Lagos, Portugal, with relatively straightforward processes and no restrictions on ownership for non-residents. 

Consider buying property in Lagos’ historic center for charm or near beaches like Praia da Dona Ana or Meia Praia for convenience and scenic views. Properties close to Porto de Mós could also be excellent options. 

After an online search to get to grips with the real estate market, contact a real estate agent or buyer’s agent to help you find the property that meets your requirements.  

You’ll find properties close to the marina and in the city center to be good investment options. However, we recommend that you speak with a real estate professional, such as a buyer’s agent, to discuss your needs and to pinpoint properties with high investment potential. Their local insights will prove to be incredible useful and may make you consider options you would not have considered.

Yes, you should be able to find new development condominiums in Lagos by conducting targeted online searches to get to grips with the market and then speaking with real estate agents or buyer’s agents to discuss which option could be best suited to your personal requirements.  

Yes, you will find several properties in Lagos that come with a private pool. After an online search to get to grips with the real estate market, seek the assistance of a real estate agent or buyer’s agent to help you find the property that are aligned to your requirements. 

The buying process in Portugal can be broken down into the following steps:

  • Step 1: Find your ideal property
  • Step 2: Secure financing for your property
  • Step 3: Negotiate and make an offer
  • Step 4: Secure a Promissory Contract (CPCV)
  • Step 5: Sign the Escritura or Final Deed

To find a reliable local real estate agent in Lagos, check reviews online, ask for recommendations, and speak with friends and acquaintances who have bought properties in the Algarve previously. It is worth bearing in mind that real estate agents in Portugal work on behalf of the seller. As such, working with a buyer’s agent can be the smarter move to ensure that your interests are fully protected.

Consider location, property type, maintenance costs, rental potential, and legal requirements before buying a vacation home in Lagos. Also, assess proximity to amenities, transport links, and the property’s resale value. Are you looking to be close to vibrant nightlife? Close to a beautiful beach? Top restaurants? These are all things that you should bear in mind.

Non-EU citizens face no restrictions when buying property in Lagos, Portugal. However, they should be aware of visa and residency requirements if they plan to stay long-term or rent out the property.

Verify property documents through a qualified lawyer who will conduct due diligence, including checking the land registry, ensuring there are no debts or legal issues, and confirming the seller’s ownership.

Avoid pitfalls such as not verifying property documents, underestimating renovation costs, and overlooking local market conditions. Thorough research and professional guidance are essential. Not working with an experienced lawyer can also lead to troubles further down the line.

In all the Algarve region, you will be able to enjoy long summer days and a mild climate throughout the year. Lagos enjoys a Mediterranean climate with hot, dry summers and mild, wet winters. Summer temperatures average 25-30 Degrees C (77-86 Degrees F), while winter temperatures range from 10-15 Degrees C (50-59 Degrees F), making it a year-round destination.

 

Popular property types in Lagos include villas for luxury and privacy, apartments for convenience and amenities, and townhouses for a blend of space and community living. Each type offers unique advantages depending on lifestyle needs. You will also find several properties with outrageous ocean views, making Lagos one of the most sought-after spots in the Algarve.

The best neighborhoods in Lagos, Portugal, for buying property include Meia Praia for beachfront living, the historic Old Town for charm, Porto de Mós for luxury villas, and Montinhos da Luz for peaceful surroundings. These areas offer a blend of amenities, scenery, and investment potential.

Property prices in Lagos, Portugal, depend on factors like location, size, and amenities. In 2023, the average asking price was €4,476 per square meter for a property. However, actual sales prices can vary, often being lower than this average, though occasionally higher depending on market conditions.

Legal requirements for buying property in Lagos include obtaining a Portuguese tax number (NIF), conducting due diligence with a lawyer, ensuring that there are no issues with the property title, and signing a promissory contract and final deed (Escritura) in front of a Notary. Legal representation is strongly recommended to help you navigate through the legal processes, which can be complex.

When foreigners buy property, they need to be aware of both the purchase and annual property taxes. Upon purchase, you’ll need to pay the Property Transfer Tax (IMT) and Stamp Duty. Annually, you’ll be liable for the Municipal Property Tax (IMI) and AIMI, should the property value be above €600,000.

Additionally, don’t forget to account for legal fees, real estate agent fees, notary fees, and land registration fees.

Yes, buying property in Lagos, Portugal, is considered a good investment due to strong demand, potential for rental income, and steady appreciation. The area’s popularity among tourists and expats, combined with its beautiful scenery and amenities, adds long-term value.

Benefits of buying property in Lagos, Portugal, include access to stunning beaches, a mild climate, a laid-back lifestyle, and potential rental income. Additionally, Portugal offers tax incentives, residency options through the Golden Visa, and a safe, welcoming environment for expats.

The property market in Lagos, Portugal, is generally more affordable than in hotspots like  Vilamoura, yet offers similar appeal with historic charm, stunning beaches, and a relaxed lifestyle. It’s increasingly popular with expats, driving steady growth but still offering value.

There are more than 15 banks that offer mortgage options in Portugal. To get a mortgage in Lagos, Portugal, you’ll need a Portuguese bank account, proof of income, and a credit history check. Mortgages typically cover up to 70 percent of the property’s value for non-residents. Loan terms vary, with fixed or variable rates available from local banks.

Over the past five years, Lagos’ property market has seen steady growth, with increased demand from foreign buyers driving up prices. New developments and a focus on luxury properties have also emerged, while the overall market remains robust, benefiting from tourism and lifestyle appeal.

To negotiate property prices in Lagos, research comparable properties, understand market conditions, and consider the seller’s situation. Working with a buyer’s agent can ensure you get the best price for the selected property, as they work solely on behalf of the buyer. This is in contrast to real estate agents who work on behalf of the seller.