Artur Saraiva Updated: December 23, 2025
The Portuguese real estate market is one of the fastest-growing and most profitable property markets in the European Union. The country offers a unique combination of a high quality of life and numerous investment opportunities. Thanks to its economic stability, thriving tourism, and a consistent flow of international investors, property investment continues to deliver strong rental yields averaging 6.9 percent and steady capital appreciation.
While many Western European markets are now saturated, Portugal still stands out by offering attractive property prices, low transaction costs, and no restrictions on real estate purchases for foreigners.
In this expat guide to Portugal real estate investment, we will cover the latest market insights, average rental yields, and property prices in top growth areas. We’ll also offer additional tips for managing Portuguese law during the purchasing process.
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Key Takeaways about Portugal Real Estate Investment
- The Portuguese real estate market is one of the fastest-growing in the European Union, as indicated by the latest data from the INE for April 2025. The average value of bank appraisals on housing increased by 16.9 percent year-on-year (YoY), reaching €1,866 /per m2.
- In 2025, Portuguese buy-to-rent properties achieved an average rental yield of 6.9 percent. Although real estate in major cities provides long-term stability, many investors are turning to secondary markets, such as Coimbra (6.7 percent), Braga (5.6 percent), and Setúbal (5.3 percent).
- Lisbon is the best location for luxury capital appreciation, while its neighboring coastal areas, such as Cascais and Sintra, offer high-end lifestyle appeal. Emerging areas like the Setúbal Peninsula (with 22.6 percent YoY in 2025) and Vila Nova de Gaia can provide more maximum growth than the saturated city centers.
- As of December 2025, Portugal introduced a new flat 7.5 percent IMT rate for non-residents.
Why is investing in Portugal real estate a good idea?
Investing in Portuguese real estate offers compelling advantages, due to the country’s desirable quality of life, solid fiscal foundation, and booming tourism sector. Foreigners can invest in Portugal without any restrictions. However, the process can take longer due to the complicated bureaucratic system. There are also significant upfront costs, such as stamp duty, transfer tax, and registration fees, as well as ongoing annual taxes (IMI).
You can’t get Portugal’s Golden Visa anymore by directly investing in real estate. However, investors are still purchasing real estate because owning property can help them apply for residency in other ways and strengthen their applications for non-investment-based residency visas, such as the D7. Here are the main reasons why the Portuguese property market remains a wise investment.
Growing real estate market
Housing prices in Portugal are on the rise, and that’s enough to make any investor cautious. The latest research by Statistics Portugal (INE) showed that in April 2025, the average bank appraisal for homes was €1,866 per square meter, €19 more than in March, a one percent rise. Prices were up 16.9 percent compared to last year, the same as in March. This places Portugal’s annual house price growth among the highest in the European Union, significantly outpacing the EU average.
Even so, Portugal’s market still has room to grow. Compared to other major Western European cities, it remains in a catch-up phase. In Lisbon, Porto, and the Algarve, homes remain more affordable than in the prime neighborhoods of Paris, London, or Berlin.
High rental yields
In 2025, the average rental yields stood at 6.9 percent for investors who buy a house to rent in Portugal. The less expensive, secondary-city markets in Portugal provide higher gross rental yields compared with the most expensive markets. For example, yields of over 5 percent are recorded in cities like Braga (5.6 percent), Coimbra (6.7 percent), and Setúbal (5.3 percent).
So, “Where can I invest in real estate?” This is a common question for foreign buyers. In markets where acquisition costs are high, rental yields are lower. While this leads to modest gross yields—such as about 4.5 percent in the city centre of Lisbon and 4.8 percent in Funchal (the capital of Madeira)—investors often tolerate this because prime locations like Lisbon offer significantly lower long-term investment risk and greater capital value stability.
The table below highlights rental yields in key regions across the country.
Region | Rental Yield Percentage (%) |
Lisbon metropolitan area | 6.8 |
Porto metropolitan area | 5.9 |
Silver Coast | 5 - 7 |
Algarve | 5.6 |
Cascais | 5.5 |
Sintra | 6.0 - 7.5 |
Strong capital appreciation
When it comes to return on investment (ROI), Portugal’s real estate market has a lot to offer. Investors can earn a steady income from rental yields and sell a property later for a higher price due to strong capital appreciation.
International buyers and high-net-worth individuals often invest in buy-to-let properties in major cities like Lisbon and tourist hotspots like the Algarve. Others take on Portugal’s urban rehabilitation projects. They renovate older properties in historic districts, which can provide strong returns.
Meanwhile, luxury and holiday homes along Portugal’s coast remain in high demand among those looking for second residences or vacation rentals. The commercial real estate sector is equally thriving, mainly with retail units and office spaces.
Safety and a stable economy
Portugal ranks as the seventh safest country in the world, according to the 2025 Global Peace Index. It boasts political and economic stability, a low crime rate, and a welcoming environment for investors.
The real estate market in Portugal remains a strong draw for foreign investment, particularly from North America and Europe. In the first quarter of 2025, Americans accounted for 58 percent of all foreigners buying property in Portugal. They especially gravitated toward luxury homes in Lisbon and Porto.
What are the current real estate investment prices and market trends in Portugal?
Over the past five years, Portugal house prices have seen a sharper increase, driven by growing demand. While real estate prices have risen, they remain relatively affordable compared to other Western European countries.
In 2024, properties in Lisbon City had an average asking price of €6,934 per square meter. Although Lisbon is a popular choice among investors, sunny Algarve real estate investment also presents a lucrative opportunity, with a lot of variety on offer across the entire region.
The average asking price (per square meter) for a property in Portimão in the Algarve was €3,272, while real estate in the Algarve capital of Faro was priced at €3,701 and €5,066 in Lagos, in the Western Algarve.
The northern Portuguese city of Porto, the country’s second-largest city, has experienced a tourism boom in recent years and is less expensive than Lisbon. The average asking price for real estate in Porto City is €4,883 per square meter, while in the historic center it is €5,056 per square meter. The wider Porto metropolitan area offers more affordable prices at €3,937 per square meter.
Portuguese real estate market stability & growth trends
Key real estate trends in Portugal in 2025 and 2026 reflect a continued strengthening after the recession and financial crisis, with demand surpassing supply, especially in major cities. Investments are evident in the renovation of old buildings and the construction of apartments.
Commercial real estate investors in Portugal often develop new hotels, as the hospitality industry is thriving. In 2025 and beyond, the Portuguese economy is expected to maintain this momentum, with forecasted year-on-year gross domestic product (GDP) growth of 1.8 percent in 2025 and 2.2 percent in 2026.
While Portugal’s interest rates started off relatively high in 2024, the past year has seen a steady decrease, leading to more favorable market conditions. This is expected to continue as the year progresses.
Average house prices in Portugal
Wondering where to invest in Portugal? Here is a list of the average asking prices for real estate in Portugal’s most popular locations:
- Lisbon Metropolitan Area: €4,935 per square meter
- Porto Metropolitan Area: €3,937 per square meter
- Algarve: €4,385 per square meter
- Alentejo: €3,181 per square meter
- Northern Portugal: €1,903 per square meter
- Central Portugal: €2,098 per square meter
Price comparison: Cost of a three-bedroom apartment in Portugal
Here’s what you can expect to pay when buying a modern three-bedroom apartment of around 200 square meters in different locations in Portugal.
Lisbon | Porto | Cascais | Portimão |
€750,000 | €545,000 | €890,000 | €485,500 |
Note: These are average prices for properties for sale that you can use as a general estimate. The prices will vary based on the location, size, condition, and amenities of the property.
Check our ultimate guide to buying property in Portugal
Which areas in Portugal offer the best opportunities for real estate investment?
The real estate market is dynamic and diverse, offering numerous potential locations to suit your needs. For many high-net-worth investors, entrepreneurs, and business experts, Lisbon provides the best real estate investment in Portugal. However, other locations can also offer strategic advantages.
Here are the top growth areas for property investment in 2026.
Lisbon: Lisbon has a higher price bracket compared to the rest of the country. However, the capital remains relatively affordable when compared to other Western European cities. A Lisbon real estate investment in the luxury segment could yield significant returns, with capital appreciation in luxury properties expected to grow by 4.5 percent this year, surpassing cities in Europe such as Geneva, Monaco, and Paris.
Lisbon’s neighboring areas: Locations such as Cascais and Sintra provide excellent residential investment opportunities. A Cascais real estate investment can provide exceptional returns for lifestyle buyers and investors seeking out luxury real estate by the coast. Sintra is steeped in authentic Portuguese tradition, filled with colorful palaces and extravagant properties offering unique charm for residential real estate.
Other prime locations in Portugal: The Algarve is the ultimate tourist and luxury destination with a growing demand, while Porto attracts visitors and investors with its rich cultural history and beautiful properties for sale at an affordable rate. For a taste of luxury, Comporta, the Tróia Peninsula, and Melides offer exclusive tranquility. The southwest of Portugal is also expected to gain momentum in the next few years.
Emerging or value-growth areas: Locations such as Setúbal, Vila Nova de Gaia, and the Azores can bypass the high entry prices of central Lisbon and Porto and still offer significant growth. In 2025, the Setúbal Peninsula led the country’s year-on-year (YoY) growth rate with over 22.6 percent increase in house prices. Ongoing improvements to the Porto Metro are making Gaia even more accessible. It offers a much better price-to-rent balance than central Porto, where real estate is becoming difficult to afford for the average earner. While Madeira boasts luxury real estate, the Azores offer lower entry points, which makes them a magnet for eco-conscious buyers.
Best Portuguese cities for real estate ROI
The best real estate investment opportunities in Portugal are in Lisbon, Porto, Faro, Braga, and Coimbra. These cities offer strong rental yields due to tourism and expat demand. Faro benefits from the Algarve’s holiday market, while Braga and Coimbra combine affordable prices with growing student and tech populations.
Region | Average property price (per square meter) | Rental yield (Gross percentage) | ROI outlook |
Lisbon | €4,935 - €6,934 | 5.2 - 6.8 | Strong, but high entry cost |
Porto | €3,937 - €5,056 | 5.9 - 6.6 | Very strong |
Faro | €3,701 | 4.7 - 5.6 | Strong |
Braga | €1,710 - €2,258 | 4.8 - 5.8 | Good, with high potential |
Coimbra | €2,332 | 6.7 - 6.9 | Good, with potential |
Source: Confidencial Imobilario
What key considerations should expats know before investing in real estate in Portugal?
Before you can invest in Portuguese real estate, you will need to obtain a Número de Identificação Fiscal (NIF) from a local tax office. A NIF is a Portuguese tax identification number required to open a Portuguese bank account and complete financial transactions in the country. This is a key first step to making your real estate investment in Portugal.
If you are a non-EU/non-EEA/non-Swiss national, you will need to have a fiscal representative to get a NIF in Portugal.
After you get a NIF, you don’t automatically become a tax resident. You begin paying taxes in Portugal if you spend more than 183 days in the country within a single year, or you have a permanent home in Portugal, whether you own or rent real estate.
A real estate lawyer in Lisbon can draft the investment contracts for you, whether you are buying or selling property, and advise you on any legal complexities. They can also connect you with a local tax advisor.
How to Invest in Portugal Real Estate for Foreigners: Step-by-Step
To invest in Portuguese real estate as a foreigner, there is a specific order of operations. From getting your paperwork to navigating the legal fine print, the steps below offer a detailed guideline.
The investment timeline at a glance
A cash purchase can take as little as 6 to 8 weeks, but for non-residents taking out a mortgage, the average process takes 3 to 5 months. Here’s how it looks:
Preparation phase → (1–3 weeks) → CPCV signed (2–4 weeks) → Due diligence and mortgage (4–8 weeks) → Final deed of sale (90–120 days or over)
Step 1: Figure out your goals and secure a NIF
Before you can purchase any type of real estate, you must obtain a NIF (Número de Identificação Fiscal) to complete all fiscal transactions. After that, you must figure out your goals.
- Strategy: Location drastically affects your ROI. If you’re aiming for long-term capital appreciation, Lisbon and Porto are an excellent choice. But if you prefer to earn an income from renting properties during peak tourist season, the Algarve or the Silver Coast has the highest yields.
Step 2: Finance your investment
Getting a Portuguese mortgage as a foreigner is very doable, but you need to be prepared for stricter terms than a local would get. Since you aren’t a tax resident, banks see you as a slightly higher risk.
- Loan-to-Value (LTV): Non-residents are typically capped at 65 to 75 percent LTV, whereas residents may get up to 90 percent.
- Deposit: This means you’ll need more “skin in the game.” Expect to bring at least 20 to 30 percent of the purchase price as a down payment.
- Documentation: You will need proof of income from your home country and an “affordability test” (such as pay slips, tax returns, and bank statements).
Step 3: The promissory contract (CPCV)
Once your offer is accepted, you sign the Contrato de Promessa de Compra e Venda (CPCV). This legally binds both parties to the sale.
- Typical deposit: You are expected to pay 10 to 20 percent of the purchase price at this stage.
- The “double refund” rule: In Portugal, if the seller backs out after the promissory contract, they must pay you back double your deposit. If you back out, you lose the deposit.
Step 4: Due diligence and valuation
During the period between the CPCV and the final deed, your lawyer and the bank will conduct due diligence.
- Legal check: Ensuring no hidden debts (liens) are attached to the property.
- Bank valuation: If you are taking a mortgage, the bank will send an appraiser. Keep in mind that if the bank’s appraisal falls short of the sale price, the bank won’t bridge that gap; instead, you increase the down payment to cover the difference. For example, if the bank’s appraiser says the house is worth €280,000 but you agreed to pay €300,000, the bank only lends based on the €280,000. You have to cover that €20,000 gap in cash. That’s why our team of buyer’s agents at Goldcrest often suggests including a “subject to valuation” clause in your initial offer or even in the CPCV.
Step 5: The final deed (Escritura)
The final step is the signing of the Escritura before a Portuguese notary.
- Final payment: You pay the remaining balance often via bank-certified check.
- Taxes: You must pay the IMT (Property Transfer Tax) and stamp duty right before you sign the deed.
- Registration: The notary or your lawyer will then register the property at the Conservatória do Registo Predial (Land Registry).
Portugal Residence Permit or Citizenship by Real Estate Investment
Non-EU citizens should be aware that the length of stay for tourists in Portugal is limited. If you want to move to Portugal long-term, ensure you have a valid residency permit. Currently, there is no direct route to obtaining a residence permit or Portuguese citizenship through real estate investment.
The Portugal Golden Visa removed its criteria for real estate investment, so you can no longer secure residency in Portugal through purchasing real estate. Regardless, real estate remains one of the best investment opportunities in Portugal.
You can become a resident in different ways, such as the D7 Visa for retirees and passive income earners, the D8 (Digital Nomad Visa), and by meeting the new criteria for the Golden Visa Program. The D7 Visa requires applicants to have a stable passive income of at least €870 per month, while the Digital Nomad Visa requires a monthly income of at least €3,480.
To qualify for the Portugal Golden Visa, a non-EU citizen must make a minimum investment (typically €500,000) in a qualified route, such as investment funds or scientific research, or by creating at least ten jobs, and maintain the investment while meeting a minimal stay requirement.
For guidance, reach out to the experts at Global Citizen Solutions, who will be able to advise you based on your individual needs.
What is the minimum real estate investment amount in Portugal?
Since the Portuguese Golden Visa program no longer includes the real estate investment option, property owners can’t become residents after purchasing real estate. The minimum real estate investment no longer qualifies for Residency by Investment (RBI). To apply for the Portugal Investment Visa, you must meet additional criteria, such as making an investment or donation, investing in an investment fund, conducting scientific research, creating ten jobs, or increasing a company’s share capital.
What taxes and additional costs apply to real estate investors in Portugal?
Investing in property in Portugal comes with property taxes. Non-residents and residents are subject to one-time and annual taxes. The rates vary based on residency status, property type, and location.
The following taxes apply when making a real estate investment in Portugal:
Property purchase tax (IMT): As of December 2025, if you are buying a home as a non-resident, you should plan for a flat IMT rate of 7.5 percent. While residents still benefit from a progressive scale (ranging from 0 to 8 percent), depending on the purchase price, property type, location, and whether it is their primary or secondary home. A 10 percent rate applies to properties in blacklisted jurisdictions (territories that benefit from favorable tax schemes).
Stamp duty: Imposto do Selo (Stamp tax) is paid at the time of purchase. Real estate transactions are usually subject to a rate of 0.8 percent.
Municipal property tax (IMI): The IMI or Immovable Property Tax is an annual property tax determined by the municipality where your property is located. The rate ranges between 0.3 and 0.45 percent for urban properties and 0.8 percent for rural properties. The municipal property tax is levied on the tax value of the property.
Additional to IMI (AIMI) Tax: There is an extra annual tax on real estate that is valued at more than €600,000. Rates range from 0.7 to 1.5 percent, depending on the property’s value. For more details, check our article on property taxes in Portugal.
Taxes on rental income: The 25 percent rate is the standard flat tax for residents with long-term residential rental income (Category F). The 28 percent flat tax is the standard rate for non-residents on all rental income, and for residents on non-residential leases. Short-term rentals (Alojamento Local) for residents fall under Category B (business income) and are taxed differently, based on a percentage of the gross income. The Mais Habitação package can help reduce the tax burden and offer advantages with an AL license and local rules.
Capital gains tax: When you sell your asset, you earn a profit. Every investor is often subject to capital gain tax on the profit from the property sale. However, there are exemptions if you are selling to reinvest in your new home. There are also potential discounts if you have had work done on the property. You can learn more from our guide on capital gains tax Portugal.
Other associated real estate investment costs to consider are:
- Notary fees (Escritura Pública): €500 – €1,000
- Legal fees: €2,000 – €5,000
- Land Registry fee (Conservatória do Registo Predial): €250
- Utility costs: About €115 for an 85 square meter apartment
- Agency fees: Around 3-6 percent of the sale price, depending on the agency
- Condominium fees: €50 to €250 or over per month
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.
Frequently Asked Questions about Portugal Real Estate Investment
Is buying real estate in Portugal a good investment?
Portugal’s real estate market went up by 113 percent since 2010, outpacing most of Europe. In 2025, this sector is estimated to grow by eight percent, with the potential to raise €2.5 billion, making real estate a strong investment opportunity.
Where are the best areas for investing in Portugal?
The best areas for investing in real estate in Portugal include Lisbon, Porto, and the Algarve. Lisbon offers strong rental yields and capital growth, Porto provides cultural appeal with lower entry costs, and the Algarve attracts tourism-driven returns and is in high demand.
Are real estate investment prices in Portugal currently declining?
No, on the contrary, they are increasing. In the first quarter of 2025, Portugal saw the biggest property price increase in the European Union, with values jumping 16.3 percent compared to the previous year. This is more than triple the EU average of 5.7 percent.
How to invest in Portugal real estate?
To invest, first obtain your NIF Number and open a Portuguese bank account. Next, find the right property and sign the preliminary Promissory Contract (CPCV) to secure the deal. Finally, pay the balance and transfer the title to become the legal property owner.
Is investing in real estate in Portugal a good long-term opportunity?
Yes, for many people, purchasing real estate in Portugal is a great investment, because its value increases over time. In April 2025, the average bank appraisal for homes in Portugal reached €1,866 per square meter, up 16.92 percent compared to the same time last year.
What is the best investment option in Portugal?
The best investment option in Portugal is real estate in Lisbon, Porto, or the Algarve due to strong rental yields and capital appreciation. Although obtaining residence through property purchases via the Portugal Golden Visa Program is no longer possible, real estate investment is still a key player in boosting the country’s economy.
What are the most active areas for real estate investment in Portugal?
The best place to invest in Portugal is Lisbon, followed by Porto, Faro, Braga, and Coimbra. Lisbon has high costs but strong appreciation and rental yields. Coimbra offers lower-cost entry with good returns, especially in student rentals. Faro is ideal for tourism-driven returns in the Algarve.
Are commercial properties a good investment in Portugal?
Yes, commercial real estate investment in Portugal saw a 151 percent increase in the first quarter of 2025 compared to the same period the previous year, totaling €651 million. Commercial properties like hotels, retail spaces, and offices are the most lucrative investment options.
Are low-density areas in Portugal worth investing?
Yes, in 2026, investing in low-density areas is worthwhile due to residency incentives, lower entry prices, and high rental yields. For example, if you choose the cultural donation or job creation route for the Portugal Golden Visa Program, you get a 20 percent discount on the investment threshold.
Does Portugal have restrictions on acquisition of real estate for foreign investors?
No, Portugal has no restrictions on the acquisition of real estate by foreign buyers. The country has an open-door policy that allows both EU and non-EU citizens to invest in real estate, regardless if it is commercial, agricultural, or residential real estate.
What are the best real estate-related funds in Portugal?
The top real estate fund in Portugal is CA Património Crescente. It is one of the country’s biggest and most regulated open-ended real estate funds for commercial property ownership, such as shopping centers and offices. It is managed by Square Asset Management. Investors should note that funds focused on commercial or residential property, like this one, no longer qualify for the Portugal Golden Visa.
