Updated: May 2, 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, 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 expatriates 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 2023 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 beautiful beaches. 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
When 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.
You will also find a wide selection of 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.
Should you be looking to buy land for sale in Lagos, Portugal, this is also an option. This 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.
For a hassle-free purchase process, we highly recommend that you work with a real estate professional and an experienced lawyer.
Step | Description |
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 deal, often with a 10 percent deposit, signed 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. |
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 real estate lawyer 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.
- 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 required by the Tax Authority for property transactions.
- 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
You’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!
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
Relying on the expertise of a buyer’s agent or experienced local real estate professional will help you navigate these complexities 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 agents 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. Fixed-rate mortgages, spanning from three to 30 years, presently average around 3.9 percent for terms up to five years.
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 Euribor. For non-residents
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)
The initial tax to consider is the Imposto Municipal Sobre as Transmissões Onerosas de Imóveis (IMT), or Municipal Tax on Onerous Transfers of Real Estate. This transfer tax is imposed on property acquisitions in Portugal and varies from 0 to 10 percent, depending on factors like property type, property price, location, and whether the buyer intends to use it as a primary or secondary residence.
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 0.5 percent for urban properties and up to 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.
Portuguese Wealth Tax 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 €600,000 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: €1,200
- Land registration fees: €250
Is it worth buying property in Lagos?
As 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.
Goldcrest: How Can We Help You Find Your Dream Property
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
Is Lagos, Portugal, expensive to live in?
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.
Is Lagos, Portugal, a good place to live?
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.
How much are apartments in Lagos, 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.
Can foreigners buy property in Lagos?
Yes, foreigners can buy property in Lagos, Portugal, with relatively straightforward processes and no restrictions on ownership for non-residents.
Where should I buy property in Lagos?
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.
How can I find affordable beachfront villas in Lagos Portugal for sale?
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.
Where can I find investment properties in Lagos Portugal with high ROI?
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.
Are there new development condominiums in Lagos Portugal?
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.
Can I find a Lagos Portugal property for sale with a private pool?
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.
