Updated: February 19, 2024

 

portugal property taxes The Portuguese real estate market has become highly sought-after in recent years, with expats from all walks of life cottoning on and relocating to this sun-drenched gem in the Iberian Peninsula. From retirees looking to spend their golden years in the Algarve to families relocating to Lisbon, if you are considering buying property in Portugal, then you are on to a winner.

This article is your go-to guide to snapping up a property in the country. From answering questions such as “Can foreigners buy property in Portugal?” to delving into the key areas to consider, we have you covered.

We will also provide you with key information on the types of properties you will find here, in addition to practical information such as financing your property and property taxes to be aware of.

Why should you buy property in Portugal?

Portugal’s real estate market has experienced significant steady growth and has become an attractive and profitable investment option in recent years. Factors such as a stable economy, affordable prices, and a high quality of life have contributed to its appeal among both domestic and foreign buyers. 

Key reasons to buy property in Portugal 

Some of the key advantages of buying property in Portugal include:  

  • An investment in a dynamic market with a high return on investment potential  
  • Low cost of living compared with other countries in Western Europe  
  • Sublime climate with incredible summers and mild winters  
  • Top-quality education and healthcare services  
  • Seventh safest country in the world, according to the 2023 Global Peace Index 
  • The Portuguese, in general, speak excellent English  
  • Incredible gastronomy  
  • Festivals and events throughout the year 
  • No restrictions on foreign property ownership

Can foreigners purchase property in Portugal?  

The first question that you’ll probably want to know is whether it is easy to purchase real estate in Portugal as a foreigner. And the simple answer is yes. There are no restrictions to non-Portuguese buying property in the county, and you’ll have the exact same rights as Portuguese nationals.   

One important consideration is that, if you are looking to move to Portugal, you will need to secure residence in the country. For example, if you are a UK citizen, you will only be able to stay in the country for three months without securing a residency permit.   

Portuguese Real Estate Market: An Overview

Why Work With Goldcrest to Buy Property in Portugal?

The main areas of interest in real estate investments in Portugal include Lisbon, Porto, and the Algarve region, each of which has experienced significant growth in recent years.  

For investors, the short-term property rental market, particularly through platforms like Airbnb, has gained popularity, offering an attractive return on investment for real estate property owners. You will find strong rental yields in many parts of Portugal, particularly in areas that are in high demand among tourists and settlers.  

However, it’s worth noting that certain challenges exist in the market, such as limited housing supply in popular areas and rising property prices in certain segments. Nonetheless, the Portugal real estate market continues to offer a promising investment landscape characterized by growth opportunities and a diverse range of property options. 

Property prices in Portugal 

Below is an overview of the real estate market in the Lisbon and Porto areas, plus Faro, the capital of the Algarve. Note that if you buy outside the city center or further from the coast, you will find that the property price generally falls considerably. 

City

Lisbon City

Cascais

Oeiras

Porto City

Matosinhos

Vila Nova de Gaia

Faro

Property price in 2023 (€/m2)

€6,009

€5,835

€4,585

€4,296

€3,547

€2,989

€3,519

It is worth noting that these are asking price values, and the purchase price can be much lower than this. Sellers tend to sell their properties by a set date and are often constrained by other variables, leading to them agreeing to a lower purchase price. It is also worth considering that the prices can also be more expensive than this, although this is much less common. It is also worth bearing in mind that, compared with other Western European capitals, Lisbon remains relatively affordable, while you will find even more reasonable prices in Porto. 

Rental yields in Portugal

When it comes to rental yields in Portugal, location and the type of property is key. Rental yields in Lisbon stand at 5.2 in Lisbon City, increasing to 6.7 percent when you look at the Lisbon Metropolitan Area. Setúbal and Barreiro are particularly attractive areas, with yields standing at 7.7 and 7.8 percent, respectively. Yields in Sintra stand at 6.3 percent, while in Cascais, yields stand at 5.6 percent, two popular locations for expat buyers.

When you look at Porto, the second largest city, yields stand at 6 percent for the Metropolitan Area of Porto and 5.6 percent for Porto City, while the average yield in the Algarve is 5.6 percent.

Which areas are the most expensive to buy property in Portugal?  

The most expensive regions for property acquisition in Portugal are Lisbon and parts of the Algarve. Setúbal, in proximity to Lisbon, can also be a high-priced location for real estate in Portugal, as can luxury houses in Comporta, Melides, and Troía on the Southwest coast. 

Similarly, in the Algarve, cities like Loulé, Lagos, and Lagoa are known for their relatively expensive properties. When it comes to luxury residences and apartments, Vale do Lobo, Quinta do Lago, and Vilamoura emerge as the top choices in the Algarve. 

Which areas are the cheapest to buy property in Portugal

The cost of buying a house in Portugal will completely depend on what you are looking for. The north of Portugal and the central region of the country are amongst the most affordable areas of Portugal, with average asking prices standing at €1,740 and €1,864, respectively. In the Alentejo, you’ll also find stunning properties at very reasonable house prices. The average asking price stood at €2,685 in 2023, with some parts being much cheaper than others.

When you can compare the type of properties available in these regions with the equivalent in other Western European countries, then you will be pleasantly surprised by the reasonable prices.

Where to Buy Property in Portugal

foreigners houses portugal Cobblestone streets wind through centuries-old neighborhoods, sun-kissed beaches stretch as far as the eye can see, and a cultural tapestry is woven with a long history, from the Moors to the Romans. Yes, Portugal has lots to offer buyers.  

In this section, we’ll run over some of the best places to buy property in the country, from the bright lights of Lisbon to the sandy beaches of the Algarve. Note that this list is by no means comprehensive, as you’ll find stunning locations up and down the country. Desirable areas not mentioned here include Aveiro, Coimbra, and Viseu. 

Lisbon  

Aside perhaps from the Algarve, Lisbon is the most well-known part of Portugal. This mesmerizing capital city effortlessly embraces the past and the present, enchanting all who grace its streets. From the cobbled streets of Alfama to the dynamic neighborhood of Baixa, with boutique shopping and buzzing nightlife, you’ll find something for any buyer. Families should consider Estrela, with its wide open parks ideal for spending time outdoors. You also have Parque das Naçōes, with its futuristic cable cars, top-quality restaurants spilling out on the street, and fabulous views of the River Tejo.  

You can consult our article, How to Buy a House in Lisbon, for more information.

Cascais  

Located just a short drive from Lisbon, Cascais is a charming coastal town that has become synonymous with luxury living. Its beautiful beaches, excellent restaurants, and thriving cultural scene make it a favorite among affluent residents and tourists alike. Cascais also boasts top-notch golf courses, marinas, and a relaxed ambiance, making it an ideal place for those seeking a more refined and laid-back lifestyle.

You can find out more in our article, Buying Property in Cascais 

Algarve  

Does the Algarve need any introduction? This sublime part of southern Portugal is renowned for its stunning coastline, golden beaches, and excellent climate. It has become somewhat of a mecca for tourists, expats, and retirees seeking a sunny, beachside lifestyle. Particularly in peak tourism season, the coastal towns in the region come alive with internationals from all over the world seeking a slice of the Algarve. Besides its natural beauty, the Algarve offers world-class golf resorts, charming fishing villages, and a lively social scene. Areas like Faro, Albufeira, and Lagos are particularly popular among property buyers. If you are thinking about moving to the Algarve, it shouldn’t take you long to settle in. There is an array of activities to get involved in, such as water sports, yoga classes, and cooking classes, where you’ll be able to get to know fellow expats.

For prospective buyers considering the Algarve, our article, Buying Property in Algarve, Portugal, has you covered, running over the intricacies of how to buy in Southern Portugal.

Porto  

The second biggest city of Portugal, Porto, has evolved quite drastically over the years, now competing with Lisbon as the country’s most talked-about city. Yes, Porto can certainly hold its own, with its charming narrow streets, fabulous riverside restaurants and cafes, and boutique stores. If you are looking for beautiful beaches, you’ll find many close to Porto and many activities to get involved in, such as surfing, yoga, or even cooking classes. Both local and foreign investors will find long-term rentals to be an attractive option, with many students, remote workers, and young professionals creating demand for this type of accommodation in the city, leading to high rental yields. 

If you are considering buying property in this charming city, our article, Buying Property in Porto, Portugal, will provide you with everything you need to know.

Alentejo  

For those looking to escape the hustle and bustle of city life, the Alentejo region in southern Portugal offers a tranquil and idyllic setting. Known for its rolling plains, vineyards, olive groves, and medieval hilltop villages, the Alentejo provides a slower pace of life and a strong connection to nature. It’s a popular choice for those seeking rural retreats and a more traditional Portuguese lifestyle. It would be the perfect part of the country to find a spacious countryside house at a very reasonable price. The Alentejo is often favored by locals as a top vacation destination, given the beauty of the countryside and the delicious food on offer.   

The Silver Coast  

The Silver Coast in Portugal is a captivating region renowned for its pristine beaches, historic towns, and vibrant culture. Situated on the Western Coast between Lisbon and Porto, the Silver Coast is characterized by rugged cliffs, golden sands, and charming fishing villages. If you are looking for a more authentic part of the country, to truly enjoy the local life and embrace staggeringly beautiful landscapes, then the Silver Coast could be the place for you.

Comporta and Melides  

Comporta and Melides, located in the Alentejo region, have gained popularity in recent years. Located on the Southwest coast of the country, Comporta and Melides hug the Portuguese coastline and are characterized by their pristine beaches, sand dunes, and untouched natural beauty. The architecture here is also unique, embracing nature in the design of many buildings while still keeping the typical style of the Alentejo region. Comporta, in particular, has attracted attention from celebrities and jet-setters and has been nicknamed the “Hamptons of Europe,” making it a chic and exclusive destination to move to. 

Types of Property in Portugal

The type of proeprty you’ll come across in Portugal varies widely to suit various preferences and budgets. Whether you’re looking for a charming city apartment, a cosy semi detached house, a coastal villa, a rustic farmhouse, or a modern condominium, there are options to cater to different lifestyles and investment goals. 

apartment icon Apartments

In urban areas such as Lisbon and Porto, you can find a mix of historic apartments with intricate architectural details, contemporary city lofts with modern amenities, and townhouses nestled in charming neighborhoods. From large apartments spacious enough for a family to individual apartment units for young professionals, there are different options to cater to the buyer. If you are looking for a studio apartment, you will also come across many in the bigger cities. Increasingly, you will also find apartments and other property types that are built using eco-friendly materials and that implement energy-saving techniques. 

Beachfront properties

If you prefer a coastal lifestyle, Portugal’s Algarve region is renowned for its stunning beaches and offers a plethora of options, including beachfront villas, townhouses in resort communities, and apartments with breathtaking ocean views. 

GC-ICON-28 Countryside homes

For those seeking a quieter rural retreat, the countryside of Portugal provides opportunities to purchase traditional cottages, farmhouses, or even land to build your dream home. Additionally, the Portugal real estate market includes commercial real estate, such as offices, retail spaces, and hotels, which can be attractive for real estate investment purposes. 

GC-ICON-97 Luxury properties

You will find many luxury properties in Portugal up and down the country, from luxurious waterfront properties close to Porto to extravagant mansions in the Algarve. Comporta and Melides are both attractive options for exclusive properties and luxury houses in the Southwest, just a short hour and a half drive south of Lisbon. Cascais is also a top location to consider for lifestyle buyers, given its world-class restaurants and vast array of activities on offer, plus are just a short 30-minute drive from Lisbon.

Step by Step: Buying a House in Portugal

In this section, we’ll provide you with a short step-by-step guide to buying property in Portugal. We will provide more information on some of the steps later in the article, such as financing your property and tips on finding the ideal property.  

Step 1: Financing your property   

Before embarking on the journey of buying a house in Portugal, it’s essential to assess your financial situation and explore your financing options. If you plan to take out a mortgage, research various Portuguese banks to find the best interest rates and terms that suit your needs. There are many different banks offering mortgage loans for foreigners, so it’s important to determine which one provides the best deal based on your requirements. Also, ensure that you have a clear understanding of the associated property costs, including taxes, legal fees, and property registration expenses. 

Step 2: Finding the perfect property   

When searching for properties, you should have an idea of where you would like to buy and the type of property that you would like to purchase. For this, it is worth setting a budget and conducting thorough research online to get a basic understanding of the Portuguese real estate market. When scouting out properties, consider factors such as location, amenities, proximity to essential services, and potential for rental income if you intend to use the property as an investment. It is also worth listing the assistance of real estate professionals who will understand the market and can help you find your ideal property.  

Step 3. Making an offer and negotiation  

 When you find a property that fits your criteria, it’s time to make an offer. If you work with a real estate professional, they can help you with this, enabling you to secure the property at the best possible price. Negotiation is a customary part of the process in Portugal, so be prepared to engage in back-and-forth discussions with the seller until both parties reach a mutual agreement.   

Step 4: Reservation Agreement and Promissory Contract (CPCV)  

Once the offer is accepted and the negotiations conclude successfully, you may have a preliminary step (Reservation Agreement) that is basically used to show your intent to purchase the property and to ensure that the property is “off the market” while you make your final decision. Usually, with the signing of the Reservation Agreement, a reservation fee of between €6,000 and €10,000 will need to be paid. This can be completely refunded should you not move forward with the purchase. However, the refundability of the reservation fee and the terms for the refund to be made will have to be clearly stated on the Reservation Agreement.  

The following step is the Promissory Contract (Contrato Promessa de Compra e Venda – CPCV). This contract solidifies the transaction and typically requires you to pay a deposit, which is often around 10 percent of the property’s purchase price. The CPCV is signed in front of a Notary. At this stage, ensure that you fully understand the terms and conditions outlined in the contract before signing it. The CPCV legally binds both parties to proceed with the sale according to the agreed-upon terms.  

Step 5:  Sign the Escritura (Final Deed)  

The final step in the property purchase process is signing the Escritura, also known as the Final Deed. This is the formal contract that transfers ownership of the property from the seller to the buyer. It must be signed in front of the Notary. Before signing, ensure that you or your legal representative thoroughly review the document and clarify any doubts. At this stage, you will be required to pay the remaining balance of the property price, as well as other associated fees and taxes. Once the Escritura is signed, you become the official owner of the property, and the process is complete.

Requirements for a Successful Property Purchase

Cascais-Apartments-for-rent An essential part of the process when buying real estate in Portugal is getting the Portuguese NIF number, a Portuguese tax number that is essential to opening a bank account in Portugal and for completing other important financial transactions in the country. It is highly recommended to open a Portuguese bank account when buying property to avoid transaction fees when making your purchase. There are a variety of Portuguese banks to consider, many of which offer mortgages for foreign buyers.  

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 Portuguese NIF number online. 

Required Documents to Buy Property in Portugal

In addition to your NIF number, which you can get from your local tax office, 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. 
  • 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. 

Having these documents is essential for a smooth and legally compliant real estate transaction in Portugal. We recommend working with an independent lawyer who will be able to assist you with determining the documents you need and completing due diligence checks on your property on your behalf. 

How to Find Property in Portugal

Each buyer will be after something slightly different, and it is important to have a clear picture of what you are after and have a budget in mind. Here, we’ll guide you through the main points of finding the perfect property in Portugal.    

Finding the perfect property for your needs  

How to begin your search  

  • Define your requirements: Make a list of your specific needs and preferences. Consider factors like location, size, budget, amenities, proximity to schools, healthcare services, transport, and other important facilities.  
  • Determine your budget: Establish a realistic budget for the property purchase and think about whether you will need a mortgage. This will help you narrow down your search and focus on properties within your price range.  
  • Research neighborhoods: Conduct thorough research on different neighborhoods to find areas that align with your lifestyle and preferences. Look for information on schools, for example, if you are moving with your children, and potential for future growth, if you may rent out the property in the future.

Navigating property websites   

It’s important to note that there is no one place to find all the properties on the market, and instead, you’ll find a fragmented market. It is, therefore, useful to enlist the help of real estate professionals. Buyer’s agents will also have access to properties that you will not find elsewhere on the market. With this said, here are a couple of tips to make the most out of property websites:  

  • A quick search for keywords, such as “buy home in Portugal”, “Portugal buying property” or “buy house Portugal,” can be a good place to start to get to grips with the real estate market, what’s on offer, and determine which areas may be best for you. 
  • Websites often have advanced search filters that you can utilize to help you refine your search based on your requirements and compare real estate prices between neighborhoods to help you understand the market.  
  • Consider setting up email alerts on property websites to receive notifications when new properties meeting your criteria become available. 

Work with property specialists  

  • Work with a real estate professional: Consider enlisting the services of a reputable real estate agent or buyer’s agent. Qualified real estate agents can provide valuable insights, grant access to exclusive listings, and guide you through the entire property purchase process. Note that real estate agents work on behalf of the seller and will secure a higher commission for a higher sale. A buyer’s agent, on the other hand, will work solely on behalf of the buyer, ensuring their exact needs are met. 
  • Communicate your needs: Clearly communicate your requirements to the real estate agents you choose to work with so they can focus on finding properties that match your criteria.  

Property viewings   

  • Schedule viewings: Once you have shortlisted some properties, schedule viewings to physically inspect them. Pay attention to the property’s condition, layout, and potential renovation needs. Real estate professionals will be able to arrange viewings on your behalf.   
  • Ask questions: During viewings, don’t hesitate to ask questions about the property, the neighborhood, or any ongoing or planned developments. A top tip is to have some questions written down beforehand so that you can be sure to cover all the bases. Also, speak with neighbors to get a feel for the neighborhood. It is also worth visiting the property in the daytime and at night, as places can have a distinctly different feel to them depending on when you visit them.   

Evaluating property prices and investment potential  

Consider the long-term investment potential of the property. You should take into account factors like potential rental income, property appreciation, and the overall economic prospects of the area.  

Navigating the Portuguese legal system  

Navigating the Portuguese legal system can be tricky, particularly for individuals unfamiliar with the country’s legal procedures. Working with a Portuguese real estate lawyer is highly recommended.  

Due diligence   

Due diligence plays a crucial role in real estate transactions, enabling you to identify any legal issues or potential obstacles that need to be addressed before proceeding with the transaction. Your lawyer will conduct due diligence checks on your behalf. This can include issues with the property but also with the seller. They will also be able to inform you of any outstanding debt on the property.  

Buying Property in Portugal Pitfalls

Be aware of the following pitfalls of buying real estate in Portugal.  

Legal complexities: We highly recommend working with an experienced real estate lawyer to ensure you will face no legal issues, for example, in checking if the owner has the right to sell or if there are any outstanding debts associated with the property.  

Taxes: Ensure you are up to speed on property taxes, maintenance fees, and other associated fees. 

Property location: Ensure you are completely content with the location of the property and that it is conveniently located, such as close to a school if you are moving with family.  

Title deed verification: Ensure thorough verification of property title deeds to avoid any disputes or legal complications in the future. 

Financing a Property in Portugal

Acquiring a new property, especially abroad, requires focus and careful observation when it comes to financing your property. In this section, we provide you with some information about mortgages in Portugal and the importance of defining your budget. 

Get your budget straight 

Before thinking about buying a property in Portugal, you should reflect on what finances you have available for the purchase and how much you want to invest. It’s important to find a safe balance between savings (if you already have the full amount, that simplifies the equation) and the need to finance part of the costs. 

If you decide on monthly instalments, be aware that these should not exceed 35-40 percent of your monthly net income, just to be on the safe side. 

When it comes to how to actually buy your property, there are several options on the table. 

One-off payment

This option, pagamento a pronto, in Portuguese, involves paying the wholesale price of the property to the seller in one go, normally via a bank check that you hand over when you sign the deed. 

Mortgage loans

Getting a mortgage, either from a Portuguese bank or one at home and using the property itself as a guarantee against defaulting, is a more common option than a one-off payment. 

Mortgage subrogation

If there is an outstanding mortgage on the property from the previous property owner, you can change the name of the debtor to your own name, taking on all the rights and responsibilities and making you the new mortgage payer. You have to request this from the same banking entity in which the mortgage already exists. 

One benefit of subrogating a mortgage is that it saves the costs of a new mortgage, but the downside is that the terms and conditions are fixed, and you cannot really adapt them to meet your needs. 

Getting a mortgage in Portugal

Algarve Portugal

Another important aspect to consider is the availability of mortgages. Generally, residents have greater borrowing options compared to non-residents. If you plan on obtaining a mortgage loan to purchase property in Portugal, it is advisable to determine the maximum amount you can borrow before making an offer. There are several banks in Portugal that offer mortgages for foreigners.  

For residents in Portugal seeking a mortgage, a deposit or down payment typically falls between 10 percent and 20 percent. 

On the other hand, non-residents looking for a mortgage usually require a deposit of approximately 30 percent, although there may be cases where the percentage is slightly lower. Consulting with a mortgage broker can provide further guidance on this matter. 

You can find out more about mortgages in Portugal in our article: How to Get a Mortgage in Portugal in 2024. 

Property Tax in Portugal

When it comes to buying a house in Portugal, you will need to be aware of the taxes that you will need to pay. In this section, we’ll delve into the taxes that you will need to consider. 

Municipal Property Tax (IMI)   

The IMI (Municipal Property Tax) is an annual tax that you will need to pay and is determined by the property’s municipality. The rates range from 0.3 percent to 0.8 percent based on the property type and location (how much tax for IMI will depend on whether the property is located in an urban or rural area). The IMI is calculated on the property tax value (VPT), which is generally lower than the market price. Properties in rehabilitation areas with completed works may be IMI-exempt for three years, and if registered as a permanent residence, the exemption can be extended for five additional years upon request.  

Property Purchase Tax (IMT)  

The IMT (Municipal Tax on Onerous Transmissions of Real Estate) is a property transfer tax. The property transfer tax rate varies from 0 to 8 percent based on factors like property type, location, purchase price, and intended use. If the buyer is a tax resident in a blacklisted jurisdiction, the rate increases to 10 percent. The property transfer tax must be paid before the purchase is completed, and it’s calculated based on the property value or declared amount in the deed. You can use an online calculator to determine the exact percentage.  

You can calculate IMT (property transfer tax) using our Portugal property tax calculator.   

Stamp Duty 

Imposto do Selo (Stamp Duty) is one of the oldest state taxes and is an additional transaction tax for real estate transfers. Typically, it amounts to 0.8 percent of the deed’s total value and must be paid at the time of purchase.  

AIMI (Wealth Tax)   

If you’re investing in a higher-end property in Portugal, take note of the Portuguese Wealth Tax (AIMI). This post-purchase tax 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  
  • 1 percent tax for properties valued between €1 million and €2 million  
  • 1.5  percent tax applied to property worth more than €2 million  

The €600,000 threshold applies individually. If the property is jointly owned with your partner, AIMI will only apply if the property’s value exceeds €1.2 million.   

Captial Gains Tax   

When you sell your Portuguese property, any capital gain from the sale may be taxable. Capital gains refer to the profit made from the property’s sale.  

You need to include the purchase details of the property, including the price paid and any invoices for renovations, in your tax return for the year of purchase. These details will be considered in the capital gains assessment.  

However, if you reinvest the total selling price in a new home, you may be exempt from capital gains tax. This exemption applies if the property sold was your permanent residence and corresponds to your tax address. To qualify, you must purchase a new property and reinvest the selling price within 24 months prior to the sale or 36 months after the sale. By informing the Portuguese Tax Authority of your intention to reinvest, the capital gains tax is suspended.  

Once you’ve purchased the new property, the tax authorities will calculate the profit and verify that you used it to buy the new home. Remember to document the new property as your family’s permanent residence within 12 months after the reinvestment.  

You can find out more about the intricacies of property tax in our article: Property Taxes in Portugal 2024: An Overview. 

Can you purchase a house in Portugal with crypto?   

In Portugal, it is now possible to purchase a property using Bitcoin. The first recorded instance of this occurred in May 2022, when an investor bought a property in the city of Braga using cryptocurrency. It is also possible to sell your house for crypto in Portugal. 

Maintaining and Managing the Property

Below, we’ve highlighted some important information relating to property management and maintenance in Portugal.  

Property maintenance  

Alongside working with a lawyer to conduct due diligence and working with a Property surveyor in Portugal to ensure there are no issues with the interior or exterior of the property, it is important to continue to maintain the property, particularly if you are looking to rent it out or sell the property in the future.   

Homeowner Associations (HOAs) in Portugal   

In Portugal, properties featuring shared elements like buildings, amenities, or land follow a co-ownership system similar to condominium ownership in the United States, albeit without the presence of homeowner’s associations. This arrangement allows multiple owners to share ownership responsibilities and benefits without the formal structure of an HOA.  

You can find out more in our article: Homeowner’s Association Portugal: An Overview. 

Finding property management services  

 If you are renting your property out, it can be worth working with a property management company to take care of the upkeep of the property on your behalf.   

You can find out more in our article: How to Find a Property Manager in Portugal 

Property Purchase Costs

In addition to the payment for the property and the associated fees, you should be aware of the following costs.

  • Legal fees: A lawyer will cost you approximately €2000-€5000, depending on the type of property, the price, and the complexities of the purchase.
  • Land Registry Fee: There is a public fee for the Land Registry, amounting to €250.
  • Notary Fees: Notary fees will cost you around €1,200.
  • Mortgage: Factor in costs for a mortgage broker, including the application fee of €290 and the bank valuation fee of €280.

Is it worth buying property in Portugal?

While the Portuguese real estate  is rich and dynamic, you may be asking yourself, “Is now the right time to buy?” This is a complex question and will depend on your current situation. While property prices have been increasing in the past few years in many key areas, buying a proeprty in Portugal is a good financial investment, whether you are looking for capital appreciation or to rent out your proeprty for long-term gains.

What to consider before buying property in Portugal

Demand for accommodation in Portugal, particularly in key cities such as Lisbon and Porto, means that investors can get a nice return on their investment in the long term. If you are considering investing in short-term rentals, ensure you do your research and speak with a real estate specialist who will be able to advise you on potential locations.

Is there a real estate bubble in Portugal?

The Portuguese economy has experienced a steady increase following the financial crisis and recession. The boom in tourism and a thriving housing market are key indicators of this recovery. Currently, major cities are experiencing a surge in demand for property that surpasses the available supply, resulting in a significant uptick in property prices. The trend is further fueled by ongoing renovations of neglected buildings, the construction of new apartment complexes, and the emergence of new hotels. Consequently, some neighborhoods are undergoing significant gentrification.

The combination of robust tourism and heightened demand is driving up rental prices, raising concerns about a potential real estate bubble in Portugal. Many properties are being perceived as overvalued. The persistence of this property bubble seems likely unless there is a slowdown in interest from foreign investors, who have been the predominant buyers in recent years.

Property trends in Portugal

After property transactions fell by around 20 percent, the market has stabilized from the second quarter of 2023 onwards. Predictions for 2024 suggest that the Portuguese economy will gradually pick up momentum despite facing political and economic uncertainties on a national level and globally. Alongside this, while current interest rates are high at the moment, they look set to fall, potentially fostering more favorable market conditions as the year progresses.

Is it worth buying property in Portugal for rent?

Buying Portugal real estate to rent is an excellent financial investment. It is worth it as there is more demand for accommodation than what is currently available — especially in Lisbon and Porto. Also, rental yields during peak tourism season make property rental in Portugal a viable investment. For example, having a property in the Algarve to put up for short-term rentals could be a lucrative option.

Renting versus buying property

While there is no right or wrong answer to this – it will depend completely on your personal situation and budget – buying property is the better financial option in the long term. Renting a place while you search for the perfect property to buy is also a good idea so that you have a base to explore neighborhoods or areas of the country.

Selecting the seller

Carefully select which seller to buy from. Remember that the negotiation and purchase process can depend very much on who you are buying the property from: A private property seller, real estate agent, developer, or bank.

Choose who to buy with: A Buyer’s agent versus a realtor

In Portugal, while a realtor (or real estate agent) works on behalf of the seller and will secure a higher commission for a higher sale, a buyer’s agent works exclusively on behalf of the buyer, ensuring your needs are met. From scouting out the ideal property based on your exact requirements to negotiation and aftercare, they will assist you throughout the buying process, reducing hassle and stress.

Exploring Visa and Immigration Options for Portugal

For individuals contemplating a relocation to Portugal, it’s crucial to have a thorough understanding of the diverse visa and residency alternatives. While it is relatively straightforward for EU citizens to relocate to Portugal, there are some more hoops for non-EU citizens to jump through.

The Golden Visa Portugal initiative stands out as an appealing choice for many, providing residency opportunities for investors and their families. Those contemplating retirement in this picturesque nation can explore the Retirement Visa (D7), specifically designed to cater to their needs. Additionally, digital nomads have the flexibility to choose from both short and long-stay options through the Nomad Visa (D8). You can get in touch with our residency and citizenship division, Global Citizen Solutions, to discuss your residency options.

Goldcrest: How We Can Help You Secure Your Dream Home

Goldcrest is a buyer’s agent that is based in Lisbon, Porto, and the Algarve. We provide expert, impartial advice on real estate investments and how to buy property in Portugal. From scouting out the perfect property through to property acquisition, we have you covered throughout the process.  

If you are looking to purchase property in Portugal, don’t hesitate to get in touch. Our team of skilled experts is available to solve all your real estate doubts, offering insightful expertise and strategic advice.    

What’s more, with our sister companies Global Citizen Solutions and GetNIF, we are your one-stop-shop for all things related to residency, citizenship, and setting up your NIF number in Portugal. Why not book a non-binding call with us today to find out more about your options? 

Why choose Goldcrest?   

  • Local knowledge: With offices located across Portugal, our presence nationwide allows us to assist you personally across the country.  
  • Independent service: As an independent buying agent, we do not represent any development or project. Our service is entirely tailored toward each individual client, providing you with everything you need to secure the perfect property at the best possible price. As an impartial advisor on the market, we work solely on behalf of our client and provide a service tailored to your needs and requirements.   
  • Streamlined process: Our real estate agents speak English and Portuguese, and our service is completely focused on providing you with a hassle-free buying experience, saving you time.   
  • Experienced team: Our expert real estate team has a vast local knowledge of the real estate market. We have cutting-edge technology and metasearch tools at our disposal to provide full market coverage, ensuring the best investment choices and negotiated prices.  
  • Network of partners: Our network of contacts includes lawyers, property management services, builders, architects, designers, and landscape gardeners, again saving you time and hassle by providing you with trusted experts in their field of work.

Frequently Asked Questions about Foreigners Buying Property in Portugal

What is required to buy property in Portugal as a foreigner?

As a foreigner, buying real estate in Portugal is relatively straightforward compared to the buying process in other European countries. With regards to documents, you’ll need the following: 

  • Your NIF number (Portuguese tax number) 
  • A Portuguese bank account 
  • A valid photo ID, such as your passport 
  • Proof of address 
  • Sales contract 
  • Energy Performance Certificate 
  • Stamp tax 
  • Land register document 

There are also no restrictions placed on foreigners buying properties in Portugal, a significant advantage of buying property here.

Yes, foreign investors and expats can buy property in Portugal without a visa. However, to live in the country, they will need to secure a valid visa. Options for non-EU citizens include the D7 Visa (Passive Income Visa), Digital Nomad Visa, and the Portugal Golden Visa program, amongst others. After five years, you can apply to secure permanent residence and will be eligible for Portuguese citizenship, provided you meet the requirements under Portuguese nationality law. 

The Portugal Golden Visa program, the country’s residency by investment program, is still available. The program requires a minimum foreign investment in the Portuguese economy, with several options on the table. However, the real estate investment pathway of the Portuguese Golden Visa was discontinued on 7 October 2023. Following this, it is no longer possible to make a foreign investment in real estate in Portugal and secure Portuguese residency. This includes both commercial real estate and residential real estate. 

Regarding property ownership regulations for foreign buyers in Portugal, foreigners will face no restrictions on buying real estate in Portugal. However, if property owners are looking to reside in Portugal, they will need to have a valid residence permit. Some countries will have agreements with Portugal whereby they can stay in the country for a three-month period, such as the UK and the USA. However, after this time, they will need to apply for residency. Foreign investors purchasing property that also want live in Portugal should explore residency options alongside the property buying process.

Some of the advantages to purchasing property in Portugal include:  

  • An excellent financial investment in a dynamic, robust market with a high return on investment potential
  • Low cost of living compared with other countries in Western Europe  
  • Sublime climate with incredible summers and mild winters  
  • Many charming coastal towns for those looking to snap up a beach house with stunning ocean views
  • Excellent education opportunities and a high quality healthcare system
  • No restrictions on foreign ownership of property

Some of the disadvantages of buying property in Portugal are the following: 

  • Many houses lack central heating  
  • Bureaucracy can be slow, so fairly simple processes can take some time 

Although property prices are on the rise, buying a home in Portugal is an outstanding investment, whether you are looking to move to the country or simply want to buy to rent out your property. With high demand and limited supply, you’ll find options for both renting out your property in the short term and long term.

It’s important to note that real estate agencies in Portugal work on behalf of the seller and, therefore, will receive a higher commission for a higher sale. While they should have your best interests at heart, there is no doubt a conflict of interest. A buyer’s agent, however, works solely on behalf of the buyer, securing the best property at the best price possible. 

US citizens purchasing property in Portugal should face no issues. Portugal allows foreign nationals, including US citizens, to purchase real estate within its borders. If you would like to live in the country for more than three months, you will, however, need to secure Portuguese residency. 

Yes, a UK citizen can buy a house in Portugal. Portugal welcomes foreign buyers, and citizens of the United Kingdom are no exception. You will need to secure residency in the country if you want to live in Portugal for more than three months out of a six-month period. However, if you are concerned about buying property in Portugal after Brexit, you should face no issues.  

Buying property in Portugal as a foreigner is relatively straightforward. Non-citizens will have no problems buying a house in Portugal. The country places no restrictions on foreigners buying property in the country or foreign property ownership. However, you will need to secure residency if you intend to live in the country. 

Buying a house in Portugal is an excellent idea for several reasons. The country offers a high quality of life, a pleasant climate, and beautiful landscapes. Additionally, property prices are relatively affordable compared to many other European countries. However, it’s essential to conduct thorough research and consider factors such as location, local regulations, and your personal circumstances before making a decision. Buying rental property in Portugal, either for long-term or short-term rentals, can also be a profitable venture, given the generally high rental yields. 

The process to buy a house in Portugal can be broken down into the following steps:  

  • Step 1. Decide whether you’d like to take out a mortgage loan to finance your property. 
  • Step 2. Find the perfect Portugal property 
  • Step 3. Negotiation 
  • Step 4. Reservation Agreement 
  • Step 5. Promissory Contract (CPCV) 
  • Step 6. Sign the Escritura (Final Deed) 

When it comes to the costs of buying a house in Portugal, they include real estate agent fees, Notary and registration fees, stamp duty, and legal fees. It’s crucial to budget for these expenses when calculating the total purchase cost.

Yes, many banks in Portugal offer mortgage loans to foreign buyers who are looking into buying a house in Portugal. 

The buyer pays the deposit, which is usually around 10 percent of the property’s purchase price.

While it is not mandatory to have a real estate lawyer, it is highly recommended that you seek legal assistance when buying property in Portugal, given the complexities of the process and to ensure that everything runs smoothly. For example, they will check that the seller is legally able to sell the property, that the property has no issues with it, and be able to check the buying contracts.

You should take into consideration legal fees, Notary Fees, mortgage broker fees (if applicable), and taxes when buying property in Portugal, in addition to the property costs.

The deposit for the property usually lies between 10 to 25 percent of the purchase price, although this can be lower if both parties agree. A clause can be added, if applicable, stating that it is conditional on a mortgage offer being accepted.

The country places no restrictions on foreigners buying property in the country. Whether you are buying a house in Portugal as an American, a Canadian, or if you are from any other country, you should face no restrictions. Note that if you are looking to also live in Portugal, you will need to secure legal residency in the country. 

Property is generally affordable in Portugal. However, property prices are location dependent, with properties in Lisbon more expensive than properties in other parts of the country. Many cities, such as Évora, Aveiro, and Braga, provide very affordable properties.

With affordable prices, a low cost of living, stunning landscapes, and excellent healthcare and education opportunities, there are many reasons to consider buying property in Portugal.

You should ensure you have the following documents:

  • Your NIF number (Portuguese tax number) 
  • A Portuguese bank account 
  • A valid photo ID, such as your passport 
  • Proof of address 
  • Sales contract 
  • Energy Performance Certificate 
  • Stamp tax 
  • Land register document 

The average house price in Portugal depends on the location. In many parts of the country, property prices have been increasing rapidly in recent years. In the city of Lisbon, the average asking price stands at €6,009 per square meter and in Porto this figure stands at €4,296. The average asking price in Portugal will be significantly lower than this as Lisbon has its own price range. As you move away from key cities and hotspot areas, prices decrease dramatically.

Most expats live in Lisbon, Porto, the Algarve, and Setúbal.

Be aware of the following pitfalls when it comes to buying property in Portugal:

  • Legal complexities: Collaborate with an experienced Portuguese real estate lawyer to ensure no ownership or debt issues arise.
  • Taxes and fees: Stay informed on property taxes, maintenance fees, and other associated costs.
  • Property location:  Consider factors like proximity to schools for families so you have everything you need close at hand.
  • Title deed verification: Thoroughly verify property title deeds to prevent future disputes and legal complications.

The IMT (Municipal Tax on Onerous Transmissions of Real Estate) is a property transfer tax. This tax will vary from 0 to 8 percent depending on factors such as property type, location, purchase price, and intended use.

American nationals will face no restrictions when it comes to buying property in Portugal. However, if you are a US citizen and would like to live in the country for more than three months (in a six year period), you will need to apply for a residency visa. Popular options include the Golden Visa, D7 Visa, and Digital Nomad Visa.

Yes, foreigners can buy property in Portugal. The country welcomes international buyers and there are no restrictions on foreigners buying property in Portugal. However, it’s essential to understand the legal requirements and the property purchasing process. A buyer’s agent will be able to assist you throughout the process, including searching for your ideal property and in the negotiation stages, ensuring you get the best deal possible.

First, you will need to decide what kind of property you are after, which part of Portugal you would like to buy property in, and determine if you need to take out a mortgage. You will also need to get a Portuguese NIF number (Individual Portuguese Tax Number) from your local tax office.

If you are looking to buy property in Portugal, working with an experienced real estate professional and a real estate lawyer is highly recommended to help you find your ideal property and to ensure the legal requirements are met. When you have decided on the right property for you and agreed on the price with the seller, you sign the Promissory Contract and, after this, the Final Deed (Escritura). A Portuguese real estate lawyer will help you draw up the contracts and ensure you have all the required documentation. You will also need to be aware of the taxes you will need to pay, such as the Property Transfer Tax, Municipal Property Tax, and Stamp Duty).