Best Places to Buy Vacation Homes in Portugal (2025 Guide)

Why are foreign buyers choosing Portugal for vacation homes?

Buying a holiday home in Portugal can be a smart investment, especially in popular tourist destinations like the Algarve, Lisbon, and Porto. Property owners can earn a solid rental income, benefit from rising property values, and still enjoy a second home in Portugal for their own personal use. Foreigners are free to purchase property, provided they obtain a Portuguese tax number (NIF).

Here are some additional reasons why foreigners choose to purchase vacation properties in Portugal:

• High rental income: Apartments, villas, and house rentals can offer a steady source of income. The average rental yields are 6.9 percent, depending on the location of the Portugal real estate investment.
• Growth potential: In the second quarter of 2025, house prices increased at a faster rate in 19 of Portugal’s 24 largest municipalities, based on INE Statistics Portugal. The biggest jumps were recorded in Vila Nova de Gaia (+13.4 percent), Coimbra (+12.7 percent), and Amadora (+10.9 percent).
• Popular tax incentives: Although the Portuguese government has recently focused on shifting incentives toward long-term residential rentals, the short-term rental market, known as Alojamento Local (AL), still retains some relatively attractive tax benefits, particularly under the Simplified Tax Regime (Regime Simplificado).
• Affordability: On average, the cost of living in Portugal is approximately 36 percent lower than in the UK and 29.8 percent lower than in the US, not including rent. This affordability allows foreign buyers to enjoy a higher quality of life.
• Booming tourism: In August 2025, tourism and travel exports increased by €180.15 million, based on reports by the Bank of Portugal, as reported by Portugal News.

What types of vacation properties can you buy in Portugal?

There are different types of vacation rentals in Portugal available for purchase. From beachfront properties near the Atlantic Ocean to rural estates in charming villages. While it is difficult to say exactly how many vacation rentals are currently on the market, we’ve listed some of the most notable properties for a perfect getaway.

Apartments

Apartments in popular tourist areas have become a very attractive choice for foreigners looking for a vacation home. They are in high demand in major cities such as Lisbon and Porto, as well as along coastlines like the Algarve and the Silver Coast. Before buying, buyers should seek rental availability information to gauge investment viability.

Coastal apartments, especially smaller units, are the ideal Portugal vacation rental property for achieving the highest yields, offering breathtaking ocean views and proximity to modern amenities.

Holiday houses and villas

A holiday house in Portugal is typically a detached or semi-detached home located outside the densest city centers, making it perfect for family holidays. Some holiday houses are more accessible to the average investor, especially those in suburban areas, smaller beach towns, and traditional villages. An inviting house rental is one that feels like a home away from home.

Luxury villas in Portugal are tailored for high-end investors. They are often available in coastal areas, such as the Algarve and Cascais. These properties usually feature a refreshing pool, garden, and a relaxing balcony. Some even boast a heated pool for year-round enjoyment. If there are any medieval castles nearby, it can boost the rental appeal of the high-end villa.

However, luxury villas target a niche rental market with very high daily rates but may have lower overall occupancy outside peak season compared to city apartments. You can find a property manager in Portugal if you have a hard time managing your vacation home.

Traditional and rural properties

Properties like a deligiful cabin, quintas, or country houses in Portugal appeal to foreign buyers seeking large plots of land, vineyards, or a focus on rural tourism. They are common in popular destinations such as the Douro Valley and the Alentejo region.

These homes reflect traditional local architecture, such as whitewashed walls in the Alentejo or stone and schist houses in Central Portugal. They often need some renovation, but they come with a lot of historical charm and character. Having a well-equipped kitchen is a major selling point for guests seeking a rural retreat. You can enjoy a cozy fireplace, a spacious yard, and in some cases, a stunning mountain view.

Resort properties

Resort apartments or suites are investment-focused properties situated within established luxury resorts, like the Algarve and Madeira. They are often top-rated vacation rentals with stunning views and access to exclusive five-star amenities such as spas, golf courses, and concierge services.

They tend to provide hassle-free ownership with professional property management in Portugal. These features make them a true “lock-and-leave” investment. When evaluating resort properties, always check the verified guest reviews of the current rental pool.

Where to find Portugal vacation homes for sale?

You can start your search for vacation homes by working with a property finder in Portugal, who can narrow down options based on your budget and preferred location. Because the real estate market is quite fragmented, teaming up with a real estate agent or a dedicated buyer’s agent can make the process smoother.

A real estate agent typically represents the seller and focuses on marketing the property. A buyer’s agent, on the other hand, works solely for the buyer, helping you find the perfect holiday home in Portugal. A buyer’s agent, like Goldcrest, offers property search services, negotiates prices, and provides after-sales services, such as property management for long-term rentals. We use real-time comparisons of available units to secure the best deal.

If you want to take your investment one step further, you can find golf properties for sale in Portugal in the Algarve region. But they are also available in the Lisbon Coast and the Silver Coast. They are one of the most sought-after luxury properties.

Where is the best place to buy a vacation home in Portugal?

The best locations for vacation homes vary based on your goals, budget, and preferences. The most popular locations are Lisbon, Albufeira, Vilamoura, Lagos, Porto, and Madeira. Here is what they have to offer.

Lisbon Portugal vacation homes

The capital city attracts vacation-home buyers thanks to its historic charm, vibrant cultural scene, and iconic views from landmarks like Castelo de São Jorge, making it one of Portugal’s most desirable year-round destinations. Buying a vacation home in the old town of Lisbon in historic neighborhoods like Bairro Alto, Baixa, and Chiado can provide an unmatched lifestyle appeal. These locations enjoy a high occupancy rate, which can maximize your returns.

• Average asking price: €4,935 — €6,934 per square meter

Albufeira Portugal vacation homes

Albufeira, situated in the heart of the Faro District, is renowned for its beaches, vibrant nightlife, and consistent tourist demand. The property location has strong rental potential for homeowners. Here, the most popular types of vacation rentals in Portugal are apartments, villas with private pools, and townhouses.

• Average asking price: €4,176 per square meter

Vilamoura Portugal vacation homes

Vilamoura is an excellent choice for buyers seeking marina living, golf resorts, and easy access to Algarve beaches. It is the perfect romantic getaway for those who want to enjoy a unique Portugal experience. Although the average price is higher in Vilamoura than in the rest of the Algarve or nearby Albufeira, it can offer high potential for capital appreciation.

• Average asking price: €5,000 — €6,000 per square meter

Lagos Portugal vacation homes

Lagos, along with nearby Praia da Luz, appeals to buyers seeking dramatic coastlines, relaxed seaside living, and a steady flow of holidaymakers throughout the year. Here, the highly recommended vacation rentals often feature communal or private swimming pools, outdoor space, and proximity to the famous cliff formations and historic town center. Lagos also enjoys many events during the Portugal holidays, such as the Festival of Discoveries and New Year’s Eve.

• Average asking price: €5,066 per square meter

Porto Portugal vacation homes

Porto’s setting along the Atlantic Ocean gives vacation-home owners access to stunning waterfront views, cooler summers, and a growing international tourism market. Here, Portugal vacation rentals offer a high potential for capital growth and strong rental yields.

In Porto, real estate prices offer lower entry points than in Lisbon. You can find smaller renovated apartments, traditional buildings, and new developments in downtown Baxia. But if you prefer a higher price point for luxury properties, coastal districts like Foz do Douro can offer high-end villas and seaside apartments.

• Average asking price: €4,883 per square meter

Madeira Portugal vacation homes

Madeira attracts vacation-home buyers with its year-round mild climate and dramatic landscapes. Although the average price in Madeira for Portugal vacation rentals can be higher than in some mainland cities, it can provide a good return on investment.

The best area for you depends on whether you prefer a lively city, a sunny coastal retreat, or a quiet, traditional village. For example, in Funchal, the capital of Madeira, you can find a vast collection of modern apartments, luxury penthouses, and traditional houses. Newer buildings with ocean views, especially in the city center, command the highest prices.

• Average asking price: €3,643 per square meter

How much is it to buy a vacation home in Portugal?

The cost of buying a vacation home in Portugal varies based on the location and property type.

In the capital city, the average asking price for property was €6,934 per square meter in 2024, while in the surrounding Lisbon Metropolitan Area, prices were more affordable at €4,935. A high-standard, 3-bedroom family vacation home starts at €550,000.

In the Algarve’s Portimão district, the average asking price is €4,385 per square meter. For a 3-bedroom villa with a swimming pool in the Algarve, you can expect to pay anything from €450,000 up to €1 million.

In the Faro district, which is the capital of the Algarve, the price is slightly higher at €3,701. In Lagos, on the Algarve’s west coast, property prices rise further to €5,066.

Meanwhile, Porto, Portugal’s second-largest city, presents an attractive alternative, with average prices of €3,884 per square meter within the city limits and €3,937 in the broader Porto Metropolitan Area.

When investing in Portugal vacation homes, you should expect to pay higher prices for high-end amenities, such as private pools, coastal views, and smart home technology. For example, luxury vacation homes in Portugal can cost well over €1 million. Prices can exceed €10 million in prime resorts like Quinta do Lago, Vale do Lobo, and Cascais.

If you are interested in property prices in the southwest areas, check our guide on Setubal, Portugal real estate.

Tips to consider before buying a vacation home in Portugal

When buying property in Portugal, here are a couple of legal and tax requirements to consider:

• Get your NIF early. You’ll need a Portuguese tax number (NIF or Número de Identificação Fiscal) before signing contracts, opening a bank account, or paying any property-related taxes.
• Work with a legal expert. A real estate lawyer in Portugal can review contracts, verify property ownership, check for outstanding debts, and ensure the property is legally compliant, which is especially important in older or rural homes.
• Calculate the property taxes. Factor in IMT (Property Transfer Tax), IMI (Annual Municipal Property Tax), and stamp duty (Imposto de Selo) to figure out the full cost of owning a vacation home. You can learn more about tax requirements in our comprehensive guide for property taxes in Portugal.
• Review rental tax rules. If you plan to rent your home short-term, check license requirements (AL license) and understand how rental income is taxed for foreign owners.
• Confirm inheritance and ownership rules. The country has specific inheritance laws and optional regimes, such as community or separate property, which is crucial if you are buying a holiday home in Portugal with a spouse or family member.

How to rent out your vacation home in Portugal?

To legally rent your Portuguese vacation home on listing sites like Airbnb or booking.com, you must first secure an Alojamento Local (AL) license from your local municipality.

For a strong return on investment (ROI), focus on dynamic pricing, particularly during peak seasons and events. Highlight key amenities, such as pools and coastal views.

For effective maintenance, you may want to hire a professional company for property management in the Algarve, Portugal. They will handle the AL compliance, guest check-ins, cleaning, maintenance, and mandatory AIMA (Agency for Integration, Migration, and Asylum) guest reporting, offering a true “lock-and-leave” investment model for owners abroad.

Goldcrest: How We Can Help You 

Goldcrest is a buyer’s agent that is based in Lisbon. 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, helping you with the property search and offering insightful expertise and strategic advice.

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 Portuguese property market. We have cutting-edge technology and metasearch tools at your disposal to provide full market coverage, ensuring the best investment choices and negotiated prices.
• Network of partners: We have a close network of partners, including 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.