Buying Property in Porto, Portugal: Your Complete Guide

Buying property in Porto, Portugal, has become an attractive option for international buyers worldwide. Following the stunning capital. Lisbon, Porto is Portugal’s second-largest city, located along the magnificent Douro River in the north of the country.

Porto’s unique architecture and blend of modern and traditional charm attract digital nomads, retirees, and expats searching for their dream property or an investment in a Western European city with a 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 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 excellent investment opportunity of purchasing real estate in the Porto

district. This comprehensive guide gives you vital insights into the essential steps of buying real estate, from creating a budget and outlining the best Porto neighborhoods to consider to working with real estate agencies or a buyer’s agent to help you navigate the buying process.

Why Investing in 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 purchasing commercial property in Porto, Portugal, looking for affordable housing in the city center, or searching for your dream home close to the coast, you can find the property that meets your requirements.

Can foreigners buy property in Porto?

Foreign investors and expats are not restricted from buying property in Porto or Portugal in general. However, the professional assistance of local real estate agencies or buyer’s agents is not a strict requirement for buying a house in Porto, Portugal. 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 are buying a house in Porto to live in permanently or visit Portugal frequently, you must secure one of Portugal’s valid visa options. Portuguese visa options for non-EU citizens include:

• The D7 Visa (Retirement or Passive Income Visa).
• The Digital Nomad Visa.
• 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 the Douro River, buying property in Porto offers many significant benefits which we explore in further detail below:

• Investment hub: The Porto city center and surrounding districts have become ideal hubs for property investment, with Lisbon and Porto both experiencing a real estate boom over the past few years. Despite this, property prices in Porto remain
• affordable, and properties can be rented out as long-term rentals or short-term leases. The city’s vibrant cultural scene draws in visitors, young professionals, students, and expats with its captivating charms. Plus, Porto tourism continues to flourish, boosting demand for short-term rentals.
• Captivating city: One of the oldest European centers with several 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 relatively 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 four top-quality international schools, it is a top-choice city for many expats.
• Excellent public transport: It’s easy to get around Porto, as the city has an extensive public transportation network alongside an international airport, which is perfect for frequent international travelers.
• Blossoming tech scene: Many international startups are moving to the city as Porto’s industrial and tech sectors grow. The city has also become a hub for digital nomads, with top co-working spaces like CRU Creative Hub, Porto i/o, and Synergy popping up.

An Overview of the Porto's Real Estate Market

Porto features a broad spectrum of property types and prices to suit every budget and need. You will find commercial properties, modern apartments with breathtaking views, modern villas in trendy neighborhoods with a swimming pool, and traditional houses with easy access to the broader 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 table below shows the average asking price per square meter for property in the different Porto neighborhoods in 2023.

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 types of property and amenities in its neighborhoods. Look below five of the best neighborhoods and areas to purchase property in or around Porto.

Foz do Douro

Foz do Douro is the perfect coastal 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 village. It is a modern, yet quaint neighborhood situated just kilometers away from the hustle and bustle of Porto’s historic center and city center. Foz do Douro is the perfect quaint suburb for families or investors looking for a tranquil location with spacious properties, enhanced parking options and more.

Matosinhos

Just a short twenty-minute drive northwest of Porto lies Matosinhos, a coastal gem renowned for its pristine beaches like Praia de Matosinhos and Praia de Leça da Palmeira. Matosinhos offers an enticing blend of accessibility and affordability in its property market. Recent investments in urban renewal have elevated the city’s livability, making it a prime choice for discerning buyers. From modern townhouses nestled in vibrant neighborhoods to luxurious waterfront villas, Matosinhos presents a diverse array of residential options.

Ribeira

Nestled along the picturesque Douro River, Ribeira embodies Porto’s medieval essence, making it a coveted neighborhood for property investment. Its vibrant streets showcase

colorful waterfront buildings and quaint alleyways leading to hidden squares and traditional eateries. With iconic landmarks like the Dom Luís I Bridge and Porto Cathedral nearby, Ribeira offers historical charm and scenic beauty, making it an ideal choice for digital nomads and young professionals seeking a blend of culture and modern amenities.

Vila Nova De Gaia

Home to Porto’s most iconic wine houses on the waterfront of the Douro River, 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 lively town’s cultural attractions. Although not a very central location, Bonfim is an excellent 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 with one of the city’s most prominent university campuses, the Pólo Universitário da Asprela. Paranhos has become a prime investment location for international buyers wishing to rent their investment properties to students in the long term.

Campanhã

Campanhã is found in downtown Porto and has become sought-after for property investment despite not being the most desirable neighborhood. 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 know 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 investing in property in Porto

Seek Professional Advice

In Porto, you will find an array of modern apartments, luxury villas, and quaint townhouses 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

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 buying process.

However, it’s important to note 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 can help you discover the very best properties that Porto offers. 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 investing in 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, providing a secure and hassle-free acquisition.

Other professional services to consider

• Construction companies: If you are purchasing land for building or renovating an existing property, ensure you work with a reputable building company you trust. Ask for prices upfront and a timeline for the construction work.
• Interior designers and architects: Whether you’re remodeling or designing a property, interior designers and architects can help you create your ideal space and 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: These 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.

Requirements for a Successful Property Purchase

Applying for a Portuguese NIF number and opening a bank account is essential when buying real estate in Porto and Portugal. These two items will also be handy for any other transactions you need to complete in Portugal, especially for non-EU citizens.

Portuguese tax number

To open a bank account in Portugal, you will need an NIF, which is the Portuguese tax number. You can apply for the NIF number at your local tax office or get an attorney to assist you. If you are a non-EU citizen, you will need a fiscal representative. You can also apply for your NIF number online to avoid visiting the local tax office. Our partner, Global Citizen Solutions, offers a comprehensive guide about how to get tax identification number (NIF) in Portugal.

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

Once you start the purchase process, it is vital 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 invaluable as they can 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 property’s energy efficiency 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 is a tax required by the Tax Authority for property transactions.
• Caderneta Predial: The land register document 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, agent, or 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 avoid several potential roadblocks.

Navigating Property Tax in Porto, Portugal

Navigating Portugal’s property purchasing process entails much more than the excitement of finding the perfect home. Here, we briefly explain the applicable property taxes for property acquisition and ownership in Portugal. 

Municipal Property Tax (IMI)    

The IMI (Municipal Property Tax) is an annual tax whose amount is determined by the municipality where the property is located. The rates range from 0.3 to 0.5 percent for urban properties and up to 0.8 percent for rural properties.

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 property type, location, purchase price, and intended use. Our Portugal property tax calculator can help you calculate your potential property’s IMT (property transfer tax). 

Stamp Duty  

The Stamp Duty (Imposto do Selo) is an additional transaction tax the Portuguese state charges 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 refers to the profit from the property’s sale that may be subject to taxation. When you sell your Portuguese property, you must submit the property’s purchase details to the tax authorities for a capital gains assessment. You may be exempt from capital gains tax if you reinvest the total selling price in a new home.

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 you buy 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 for buying a house in 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 the potential pitfalls 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 to property acquisition, we have you covered throughout the process. Our team of skilled experts can cater to all your real estate needs, offering insightful expertise and strategic advice. Book a complimentary call with us today.