Updated: February 12, 2024

Porto Real Estate

 

Buying property in Porto, Portugal, has become an attractive option to international buyers across the globe. Following the contemporary capital of Lisbon, Porto is Portugal’s second-largest city and is located along the magnificent Douro River.

Thanks to the unique architecture and easy blend of modern and traditional charm the beautiful city offers, digital nomads, retirees, and many expats searching for a dream property in an affordable Western European city have ignited the now growing property market.

Often compared to beautiful cities like León in Spain, Bordeaux in France, and Bristol in the UK, Porto’s vibrant cultural attractions feature a unique selection of museums, theaters, and art galleries accompanied by the symphony of authentic Portuguese cuisine and the region’s internationally renowned port wine.

In this article on buying property in Porto, we will explore more than just the rich cultural heritage and the great investment opportunity buying real estate in the Porto district presents. This comprehensive guide gives you vital insights into the essential steps of purchasing real estate, from creating a budget and finding the best Porto neighborhoods to consider to working with real estate agencies or a buyer’s agent to help you with the buying process.

Why Buying Property in Porto, Portugal, is a Good Investment

Porto has a great selection of property types available and an assortment of price ranges, from luxury abodes to more affordable properties, making buying real estate in Porto much more affordable than in Lisbon and other Western European cities. Whether you are interested in buying commercial property in Porto, Portugal, looking for affordable housing in the city center, or in search of your dream home close to the coast, you will be able to find the property that meets your requirements.

GC-ICON-102 Can foreigners buy property in Porto?

There are no restrictions to foreign investors and expats buying property in Porto or when it comes to buying property in Portugal in general. The professional assistance of local real estate agencies or buyer’s agents is not a strict requirement to buy real estate. However, working with a real estate agency or seeking buyer’s agent services will prove invaluable throughout the buying process.

It is important to note that if you buy property in Porto to live permanently or visit frequently in Portugal, you will need to secure one of the valid visa options Portugal offers. Portuguese visa options for non-EU citizens include the D7 Visa (Retirement or Passive Income Visa), the Digital Nomad Visa, and the Portugal Golden Visa program.

Key reasons to buy property in Porto

Along with the city’s beautiful beaches nestled along the Atlantic Ocean, scenic open green spaces, and the beautiful parks along Douro River, there are many great benefits to buying property in Porto.

  • Investment hub: The Porto city center and surrounding districts have become an ideal hub for property investment, with Lisbon and Porto both experiencing a real estate boom over the past few years. Property prices are affordable, and properties can be rented out as long-term rentals or short-term leases as the city’s vibrant cultural scene draws in visitors, young professionals, students, and expats with its captivating charms. Plus, Porto tourism continues to flourish, continuing to boost demand for short-term rentals.
  • Captivating city: As one of the oldest European centers with a number of historic neighborhoods, Porto was named a World Heritage Site by UNESCO in 1996.
  • Waterfront properties: The gorgeous Douro River flows beside the city, providing riverside properties, lively bars, charming cafés, and excellent restaurants with a view.
  • Low cost of living: The cost of living in Porto is generally considered inexpensive. You can find the best deals on good wine, dining out in the city is affordable, public transport is deemed reliable and quite cheap, and entry fees to museums and attractions are fair.
  • High quality of life: Porto is a very safe city that offers residents a high quality of life with access to modern amenities, quality healthcare, and a great selection of international schools, making it a top-choice city where many expats live.
  • Excellent public transport: It’s very easy to get around in Porto, as the city has an extensive public transportation network alongside an international airport, perfect for frequent international travelers.
  • Blossoming tech scene: Many international startups are moving to the city as the industrial and tech sectors continue to grow in Porto. The city has also become a hub for digital nomads, with top co-working spaces popping up across the city.

An Overview of the Porto's Real Estate Market

Porto features a broad spectrum of property types and property prices to suit every budget and need. You will find commercial properties, modern apartments with breathtaking views, modern villas in trendy neighborhoods that come with a swimming pool, and traditional Porto houses with stunning views of the city and easy access to the wider Porto area.

In 2023, the average house asking price in the Porto city center stood at €4,296 per square meter, while the average price for a house in the greater Porto municipality was €3,291 per square meter.

The average asking price per square meter for property in the different Porto neighborhoods in 2023 can be seen in the table below. 

Porto City Neighborhood

Price Per Square Meter (€)

Aldoar, Foz do Douro e Nevogilde

€5,678

Centro Histórico do Porto

€4,665

Lordelo do Ouro e Massarelos

€4,651

Bonfim

€4,404

Paranhos

€3,531

Campanhã

€3,520

Ramalde

€3,529

Note that this is the average asking price. The transaction price is often significantly lower than this as sellers aim to sell their property by a set date.

The Best Neighborhoods to Buy Property in Porto

Not only has Porto, Portugal, become an attractive investment option for investors and expats ready to start a new chapter of their lives in a vibrant city, but Porto also offers an incredible selection of property types and amenities in its neighborhoods on each side of the iconic Dom Luis I Bridge. Take a look at five of the best neighborhoods and areas to purchase property in or around Porto below.

Foz do Douro

Foz do Douro is the perfect seaside town for expats who prefer scenic walks on stunning beaches like Praia da Luz and property buyers seeking luxury apartments and homes in a quiet coastal town. It is a modern yet quaint neighborhood situated just kilometers away from the hustle and bustle of Porto’s historic center and city center.

Vila Nova De Gaia

As the iconic landmark of Porto’s wine region, Vila Nova De Gaia offers residents good wine, excellent gastronomy, a lively cultural scene, and properties for rent or sale with scenic views of the Atlantic Ocean. Vila Nova De Gaia is the perfect area for a property investment opportunity or expats seeking a relaxed lifestyle offering Porto-style coastal luxury.

Bonfim

Situated in downtown Porto, Bonfim has transformed into a vibrant area and the perfect spot to purchase properties in Porto for long-term rentals and short leases, thanks to the vibrant town’s cultural attractions. Although not a very central location, Bonfim is a good place to consider buying. What were once commercial properties are now unique living spaces presenting enticing investment opportunities and living experiences along the Douro River.

Paranhos

A parish in northern Porto, Paranhos is a vibrant community that features one of the biggest university campuses in the city, the Pólo Universitário da Asprela. Paranhos has become a prime investment location for international buyers who wish to rent out their investment properties to students long-term.

Campanhã

Campanhã is found in downtown Porto and has become sought-after for property investment despite not being the most desirable neighborhood to live in. Campanhã offers investors seeking affordable property prices and promising returns a great selection of old houses and commercial spaces for restoration.

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

Now that you have an idea of the range of property prices in Porto, Portugal, and the best neighborhoods to search for your ideal property, we can delve into the buying process and the steps the journey entails. Below, we have created a concise step-by-step guide for buyers outlining the purchase and legal process for foreigners buying property in Porto.

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.

Seek Professional Advice

You will find an array of modern apartments, luxury villas, and quaint townhouses in Porto to find your dream home, whether you want to buy in the city’s downtown district or by the coast. However, navigating the buying process in your home country can be difficult, and buying abroad adds another layer of challenges. Seeking professional assistance can be a godsend to streamline the process, saving you time, hassle, and money in the long run and ensuring you don’t run into any legal difficulties.

Work with real estate professionals

Real Estate Agent You’ll find many Porto real estate agents for international buyers. While there are real estate portals that you can use to get to grips with the market, nothing beats local guidance and expert opinions. Navigating Porto’s property market is much easier if you have an experienced real estate agent or buyer’s agent to guide you through the buying process. Their local expertise aids in finding properties that match your requirements, and their local insights can significantly streamline the process.

It’s important to note, however, that real estate agents in Portugal work on behalf of the seller and will get a higher commission for a higher sale. Buyer’s agents, on the other hand, work solely on behalf of the buyer, negotiating the best possible price. Whether you want to find spacious properties or a small house by the ocean, they will be able to help you discover the very best properties that Porto has to offer.

You can check out our article on how to find a real estate agent in Porto.

Seek the assistance of a Portuguese lawyer

Engaging a proficient lawyer is crucial when buying property in Porto, Portugal. Legal intricacies demand expert handling, safeguarding your investment, and ensuring a smooth transaction. A knowledgeable lawyer is essential for due diligence, contracts, and compliance, ensuring a secure and hassle-free acquisition.

Other professional services to consider

  • Construction companies: In cases where you are purchasing land for building or renovating an existing property, ensure you work with a reputable building company that you trust. Ensure you ask prices up-from and ask for a timeline on how long the construction work will take.
  • Interior designers and architects: For property remodeling or designing, interior designers and architects will be able to help you create your ideal space so that you can turn your dream home into a reality.
  • Property management companies: For those looking to rent out their purchased property, working with property management ensures seamless maintenance and financial management, safeguarding your property.
  • Insurance companies: Insurance companies offer comprehensive property insurance, shielding investments from unforeseen risks.
  • Surveyors: Property surveyors in Portugal can provide an extra layer of reassurance, ensuring there are no structural issues to the interior or exterior of the property.

Book a complimentary call to discuss your options with our team of experts today.

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Requirements for a Successful Property Purchase

An essential part of the process when buying real estate in Porto and Portugal is applying for a Portuguese NIF number and opening a bank account. Having these two essential items will also be handy for any other transactions you need to complete in Portugal, especially for non-EU citizens.

Portuguese tax number

You will need a NIF, the Portuguese tax number, to open a bank account in Portugal. You can apply for the NIF number yourself at your local tax office or get an attorney to assist you. If you are a non-EU citizen, you will need to have a fiscal representative. To avoid having to go to the local tax office, you can also apply for your NIF number online. Our colleagues from GetNIF can assist you with getting your Portuguese tax number and opening a bank account remotely.

Portuguese bank account

When buying property in Portugal, it is recommended to open a Portuguese bank account to avoid transaction fees when making your purchase. There are a variety of Portuguese banks to consider, many of which offer mortgages for international buyers.

Required Documents for Buying Property in Porto, Portugal

Documents required for the NHR ProgramOnce you start the purchase process, it is important to have all the essential documents ready to ensure the property purchase journey is seamless and legally compliant with Portuguese real estate law. Working with a real estate lawyer will prove to be an invaluable asset as they will be able to assist you with getting the documents you need in order and completing due diligence checks on the property on your behalf.

To purchase property in Porto, you will need the following documents:

  • Photo ID: A valid identification document that verifies your identity.
  • Contrato Promessa de Compra e Venda (CPCV): The buying contract or property deed that outlines the terms and conditions of the property purchase.
  • Energy Certificate: This document provides information about the energy efficiency of the property and must be presented to you by the seller. Read our guide, Portugal’s Energy Performance Certificate Explained, to learn more.
  • Imposto de Selo: The stamp duty payment, which is a tax required by the Tax Authority for property transactions.
  • Caderneta Predial: The land register document that contains information about the property, including its location, boundaries, and registered owner.

Potential Pitfalls of Buying Property in Porto, Portugal

As with every kind of investment, there are a few potential pitfalls you may encounter when buying property in Porto, Portugal. You’re even more likely to encounter potential issues if you don’t enlist the services of a real estate attorney, real estate agent, or a buyer’s agent like Goldcrest, who has extensive experience with international property acquisition.

A few of the potential pitfalls you may encounter that you may need the help of an expert navigating include but are not limited to:

  • Legal complexities with property title deeds or debts attached to the property may lead to lengthy legal battles
  • Unknowingly neglecting to account for additional expenses beyond the property’s listed price, such as mortgage costs for foreign buyers, property taxes, notary fees, and registration expenses
  • Overlooking local regulations or tax laws may lead to fines or unexpected financial obligations
  • Investing in a location that does not meet your lifestyle needs or bring you the return on investment you hope for
  • Unforeseen issues, such as zoning changes or environmental concerns, can affect the property’s value or intended use

Seeking the professional services of a buyer’s agent or experienced local real estate agent will help you understand the intricacies of property purchases in Portugal, navigate setbacks successfully, and save you from a number of potential roadblocks along the way.

Financing Your Property in Portugal

Once you have decided on the perfect location and property for your investment in Porto real estate, you can begin planning how you will finance your purchase. In this section, we take a look at how you can plan your budget and the financing options Portugal offers for buying a home.

Get your budget straight

Creating a clear budget that takes the various costs into account, from initial application fees to property taxes, is crucial. If you need to finance your purchase, also bear in mind that for Portuguese residents, mortgage deposits usually range between 10 percent and 20 percent, while non-residents typically require around 30 percent of the property value as a deposit.

Financing your property: Main options

If you have the capital, one-off payments on your property purchase price will be possible. However, there is also a great selection of mortgage options available from financial service providers, including BBVA, Santander, Banco Best, Bankinter, and Banco CTT.

Mortgages in Porto, Portugal

Getting a mortgage in Portugal involves approaching banks or mortgage agents for an initial estimate. While residents enjoy broader borrowing options, non-residents face different criteria. Typically, non-residents should budget for a 30 percent deposit and consider factors like the Loan-to-Value (LTV) ratio, which usually hovers around 70 percent. Fixed-rate mortgages, lasting between three and 30 years, currently stand at approximately 3.9 percent for up to five years.

Types of mortgages

Fixed-rate mortgages come with a premium but offer stability, protecting against rate changes. However, non-residents face a capped LTV ratio of 75 percent. Variable-rate mortgages, tied to the Euribor, provide fluctuating rates; currently, mortgage spreads sit around 0.85 percent. Monthly payments fluctuate over time, and early repayments might incur a 0.5 percent charge on the repaid capital.

Cost and fees for mortgages in Portugal

Aside from application and valuation fees, there are significant costs involved in securing a mortgage in Portugal. Notary, registry, and tax office fees for mortgage deeds, along with Stamp Duty Tax (IMI) at 0.8 percent of the property price, add to the financial considerations. The Property Purchase Tax (IMT) varies from two percent to eight percent of the property price.

Navigating the mortgage landscape in Portugal demands a clear understanding of the available options, associated costs, and varying requirements for residents and non-residents. This clarity ensures a smoother path towards property ownership.

buy-to-let-mortgage-calculator-PortugalNavigating the property purchasing process in Portugal entails so much more than the excitement of finding the perfect home. Here, we share a brief explanation of the applicable property taxes you will have to pay for property acquisition and ownership in Portugal. 

Municipal Property Tax (IMI)    

The IMI (Municipal Property Tax) is an annual tax of which the amount is determined by the municipality in which the property is located. The rates range from 0.3 percent to 0.8 percent based on the property type and location. 

Property Purchase Tax (IMT)   

Calculated based on the property’s value or declared amount in the deed, the IMT (Municipal Tax on Onerous Transmissions of Real Estate) is a property transfer tax that needs to be paid before the purchase is completed. The property transfer tax rate varies from zero to eight percent based on factors like property type, location, purchase price, and intended use. Our Portugal property tax calculator can help you calculate the IMT (property transfer tax) on your potential property. 

Stamp Duty  

The Stamp Duty (Imposto do Selo) is an additional transaction tax charged by the Portuguese state for real estate transfers. It amounts to 0.8 percent of the deed’s total value and must be paid at the time of purchase.   

AIMI (Wealth Tax)    

The Portuguese Wealth Tax (AIMI) is a post-purchase tax that applies to property worth more than €600,000. There are three levels of taxation based on property value:    

  • 0.7 percent tax for properties valued between €600,000 and €1 million   
  • one percent tax for properties valued between €1 million and €2 million   
  • 1.5 percent tax applied to property worth more than €2 million 

Capital Gains Tax    

Capital gains refer to the profit made from the property’s sale that may be subject to taxation. When you sell your Portuguese property, you will need to submit the purchase details of the property to the tax authorities for a capital gains assessment. If you reinvest the total selling price in a new home, you may be exempt from capital gains tax.

Our article, Property Taxes in Portugal 2024: An Overview, is a comprehensive guide to property tax in Portugal that you may find beneficial. 

Property Purchase Costs

When preparing to purchase property in Porto, Portugal, it’s crucial to factor in the various one-off costs essential for the transaction. These include notary and registration fees, attorney fees, transfer tax (IMT), stamp duty fees, and potential expenses related to the land registry. Additionally, there might be fees associated with lawyers, especially if legal counsel is sought during the property purchase process.

Is it worth buying property in Portugal?

There are many good reasons to buy property in Porto, Portugal. Some of these key advantages include:

  • No restrictions on foreign property ownership 
  • Investing in a dynamic market with a high return on investment potential   
  • Low cost of living compared with other Western European cities
  • Sublime climate with incredible summers and mild winters   
  • Top-quality education and healthcare services   

Consider these benefits and take into account the potential pitfalls that you may encounter during the process, which we explored above, to decide if Porto is the right place for you.

Goldcrest: Our Expertise Can Help You Find Your Dream Property

Goldcrest is a buyer’s agent based in Porto, Lisbon, and the Algarve. Equipped with local knowledge, extensive networks, and international experience, we provide expert, impartial advice on real estate investments and how to buy property in Porto, Portugal. From scouting out the perfect property through to property acquisition, we have you covered throughout the process. Our team of skilled experts is available to cater to all your real estate needs, offering insightful expertise and strategic advice. Book a complimentary call with us today.

Frequently Asked Questions about Buying Property in Porto, Portugal

Do I need a lawyer when buying a property?

Working with a real estate lawyer is not a strict requirement for purchasing property in Porto. However, having the professional services of a real estate agent, real estate lawyer, or preferably a buyer’s agent is recommended for a seamless and compliant purchase process.

Additional fees besides standard property prices include notary and registration fees, attorney fees, transfer tax (IMT), stamp duty fees, and potential expenses related to the land registry.

The deposit for the property usually lies between 10 to 25 percent of the purchase price based on the condition that the mortgage offer is accepted. However, non-residents and foreign buyers are encouraged to budget 30 percent of the property purchase price for the deposit payment on a property in Porto, Portugal.

This depends on the type of house you are interested in purchasing. However, real estate prices in Porto are generally lower than they are in Lisbon or other Western European cities. In 2023, the average house asking price in the Porto city center stood at €4,296 per square meter, while the average price for a house in the greater Porto municipality was €3,291 per square meter.

When it comes to investment opportunities in Porto property, you’ll find an array of options. The city offers a great quality of life and ease of living. Some of the best neighborhoods in Porto for real estate investment include Campanhã, Paranhos and Bonfim, which offer strong returns on investment.

The vibrant city of Porto attracts expats, students, and digital nomads from across the globe. You will find expat communities living in the areas of Baixa, Bonfim, Foz do Douro, and Paranhos.

You will find many properties close to Porto with fantastic views of the Atlantic Ocean. Start looking for beachfront properties online by checking real estate websites and real estate agencies. Once you have an idea of what you are looking for and the location you are interested in, you can contact a real estate agent for assistance with the process. A buyer’s agent like Goldcrest will be of great value as they will have access to exclusive listings through their network and solely work on your behalf as the buyer.

There are a number of potential pitfalls you could encounter when buying property in Porto, which is why seeking the professional services of a buyer’s agent is highly recommended. Potential issues may include legal complexities with property title deeds or debts, issues with understanding local regulations or tax laws, or unforeseen issues related to location such as zoning changes that may impact your investment’s value.

Calculated based on the property’s value or declared amount in the deed, the IMT (Municipal Tax on Onerous Transmissions of Real Estate) is a property transfer tax that needs to be paid before the purchase is completed. The property transfer tax rate varies from 0 to 8 percent based on factors like property type, location, purchase price, and intended use.

For expats buying property in Porto, prioritize understanding local regulations, working with a reputable real estate agent or buyer’s agent who is fluent in English, considering proximity to amenities, and seeking legal advice to ensure a stress-free buying process.

You should also utiliize expat groups. There are already countless expats living in Porto and you will be able to tap into their personal experiences, which will likely help you with your move and adjusting to life in Porto.

Yes, you will find affordable Porto houses for sale. Explore suburban areas, consider fixer-uppers, and engage with local real estate agents or buyer’s agents that can assist you in shortlisting affordable properties that meet your requirements. Properties in Vila Nova de Gaia, on the other side of the Douro River are also worth exploring, as the average house price is lower than in Porto.

Discover beach houses for sale in or around Porto, Portugal in sought-after places like Foz do Douro and Matosinhos. These coastal gems offer stunning views of the Atlantic and close proximity to stunning beaches, making them ideal for those seeking a relaxed lifestyle by the sea. If you want to live in coastal town, you will find several charming locations not far from Porto, whether you head north or south. If you are looking to buy outside the city altogether, you will be able to find the perfect quiet seaside town on the Silver Coast to get a glimpse of authentic Portuguese life.

The average asking price for property in Vila Nova de Gaia stood at €2,989 per square meter in 2023. Vila Nova de Gaia, on the other side of the Douro River from Porto, offers more affordable property prices than Porto. With all the amenities you need, fabulous beaches nearby with stunning views of the Atlantic Ocean, and top restaurants, the city could be an excellent option, whether you are working remotely or moving with a family.