Portugal Real Estate Investment: The Complete Guide for 2025

Portugal is a hotspot for international property investors. And what’s not to love? Sun. Sea. Views. Stunning property types. High returns. It’s an investor’s dream!

The market offers exceptional value and attractive returns on Portugal real estate investment. Property values in Portugal have skyrocketed by 113 percent between 2010 and 2024—way ahead of the EU average, according to Eurostat. In 2025, the property market is expected to grow by eight percent, with the potential to reach €2.5 billion. This highlights just how strong of a long-term investment buying property in Portugal can be.

Portugal also places no restrictions on foreign buyers looking to purchase property. And with a wide selection of options to obtain residency, the country makes real estate investing in Portugal and relocation a breeze.

This guide offers insights into Portugal’s property market. We will explore why property buyers choose to invest in Portugal as well as highlight property values, current rental yields, and important information to know about residency and taxes.

Read more about:

• Why are investors so interested in Portugal?
• Portuguese Real Estate Market Stability & Growth Trends
• Portugal Property Investment: Which Areas to Invest In
• Real Estate Investment Portugal: Rental Yields
• Long-term Versus Short-term Rentals in Portugal
• Portugal Residence Permit or Citizenship by Real Estate Investment
• Real Estate Investing Portugal: Taxes and Costs

Why are investors so interested in Portugal?

Portugal’s affordability compared to other Western European countries and its quality of life continue to attract foreign investors, particularly from North America and Europe. In the first quarter of 2025, Americans made up 58 percent of all foreigners buying property in Portugal. They especially gravitated toward luxury homes in Lisbon and Porto.

The increasing demand for real estate, in conjunction with the consistent growth in demand in the tourism sector, has seen real estate prices in key Portuguese cities rise steadily over the past few years.

Some of the key reasons investors are so interested in Portugal include:

• Steadily growing property market: Confidencial Imobiliario revealed that during the first quarter of 2025, house sales prices in Portugal increased by 6.6 percent compared to the end of 2024 – the highest quarterly increase since 2007. Data suggests that Portugal is not in a speculative bubble, and these property prices are not overvalued, which reduces the risk of pricing corrections.
• Safety and 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.
• Benefits of residency: With a residence permit in Portugal, investors can enjoy being a legal Portuguese resident and visa-free travel in the Schengen Area.
• Tax benefits: Portugal has offered attractive tax incentives in recent years, such as the former Non-Habitual Resident (NHR) regime, which provided a 20 percent tax rate and tax exemptions. This year, the NHR 2.0 or Tax Incentive for Scientific Research and Innovation (IFICI) was introduced in its place, offering similar tax benefits for qualified professionals in key sectors like science, technology, and education.

Portugal Property Investment: Which Areas to Invest In

The property market in Portugal is dynamic and diverse, with many potential locations depending on what you are looking for. Lisbon offers the best of a European capital city, with very appealing property investment opportunities across the city.

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 luxury property 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, Monaca, and Paris.

Lisbon’s neighboring areas: Locations such as Cascais and Sintra provide excellent residential property investment opportunities. A Cascais real estate investment can provide exceptional returns for lifestyle buyers and investors seeking out luxury property 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 property 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.

Best Portuguese Cities for Real Estate ROI

The best property investment opportunities in Portugal are in Lisbon, Porto, Faro, Braga, and Coimbra. Lisbon and Porto 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.

Source: Numbeo

Real Estate Investment Portugal: Rental Yields

Portugal’s real estate market presents a prime opportunity for investors, thanks to its combination of low property prices and strong tourism-driven rental income. With demand for short-term rentals on the rise, now is an ideal time to explore the opportunities for property investment Portugal has to offer.

The booming tourism sector has significantly increased demand for short-term rentals, particularly in Lisbon and in the Algarve, a trend expected to grow even further this year.

The table below highlights rental yields in key regions across the country.

Long-term Versus Short-term Rentals in Portugal

Both long and short-term real estate rentals in Portugal provide good returns. There are different advantages to each option, and you should consider carefully which is the best for you.

Short-term real estate rental in Portugal

The Alojamento Local (AL) License is required for investors looking to rent out their property in Portugal for short-stay rentals. While the Mais Habitação law was in effect, it suspended the issuing of new licenses in popular tourist areas that included Lisbon, the Algarve and Porto, making it difficult for investors to capitalize on the tourism boom through short-term rentals.

Fortunately for property investors, many of these restrictions have been rolled back; however, some restrictions still remain in certain regions. So, it is important that you check this beforehand if you are looking to expand your investment portfolio and buy real estate for this purpose.

Our comprehensive guide to the Alojamento Local (AL) License offers more information. Here are the benefits and drawbacks of short-term renting.

Upsides

• Higher rental yield: Short-term rentals in Portugal offer the opportunity for higher returns for investors, particularly with the growing popularity of booking websites such as Airbnb and Booking.com. There are also many companies for property management in Portugal that can handle the property on your behalf.
• Personal use: If you would like to use the property yourself, short-term rentals give you the flexibility to stay when you like.

Downsides

• More hassle: Short-term rental typically requires more involvement on behalf of the owner. It is also imperative that you find a good management company to handle the property.
• Short-term rental restrictions: As mentioned, legislation previously placed restrictions on the issuing of short-term rental licenses in some areas of Portugal, but these restrictions have eased since the end of 2024.

Long-term real estate rental in Portugal

Let’s go over the benefits and considerations of long-term real estate rental in Portugal.

Advantages

• Certainty of fixed income: Long-term rental contracts in Portugal last a minimum of 12 months, which means that you are guaranteed rental income.
• Less damage to property: Tenants who stay for longer in your property tend to cause less damage than short-term tenants. This means lower maintenance costs.
• Lower management costs: With just one tenant occupying the property for a long period of time, you don’t have to deal with frequent cleaning costs.

Disadvantages

• Lower rental yields: The rental yields of short-term lets are far higher than those for a long-term rental.
• Rent protection legislation: Portugal has stringent protection for tenants, meaning you may find it difficult to remove tenants or raise the price of rent.

Here at Goldcrest, we specialize in finding the right property for your goals. So, if finding a long-term rental property investment is what you are after, our local experts have the latest market data to advise you on a lucrative purchase. Our all-in-one service also includes helping you find tenants and assisting with rental property management in Portugal for long-term rentals.

Step-by-Step Portugal Real Estate Investment Process

1. Define your investment goals. Choose the type of property (residential, commercial, or rental) based on your budget. Select the location according to your long-term objectives, like city, coast, or countryside.
2. Research the market. Study property trends, legal requirements, taxes, and market conditions. It helps to work with a local real estate agent or property advisor.
3. Secure the funds. Arrange funds through personal capital or a Portuguese mortgage. Non-residents can also apply for loans from Portuguese banks.
4. Do due diligence. Work with a buyer’s agent to compile all the paperwork that ties you or the seller to the property.
5. Make the purchase. Sign the promissory contract, pay the deposit, and finalize the sale with the public deed before a notary. Register the property in your name.

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 route to a residence permit or Portuguese citizenship via a real estate investment.

However, there are many other routes to secure residency in Portugal, including the D7 Visa for retirees and passive income earners, the D8 (Digital Nomad Visa), and the qualifying investment options 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 monthly income of at least €3,480.

For guidance, reach out to the experts at Global Citizen Solutions, who will be able to advise you based on your individual needs.

Portugal’s Golden Visa Program: Current qualifying investment options

The Golden Visa program is a Portugal investment visa that allows investors and their family members to live, work, and study in Portugal and provides free movement within Europe’s Schengen Area.

While the real estate option was the most popular investment pathway for Golden Visa applicants, this route is no longer available. The current Golden Visa investment alternatives are:

• Investment fund Subscription: Contribute to qualified venture capital funds worth at least €500,000
• Investment or donation: Contribute to the arts or reconstruction of national heritage, with a minimum investment amount of at least €250,000
• Scientific Research: Science or Technology research, minimum investment of at least €500,000
• Creation of ten jobs: Creation and maintenance of ten jobs during the required period
• Share capital and job creation: Incorporation of a company or reinforcement of a company’s share capital, in either case with an investment of €500,000, combined with the creation of five or maintaining ten jobs (five of them permanent)

Our citizenship and residency partner, Global Citizen Solutions, can guide you through the process if you are interested in investing in Portugal through the Portuguese Golden Visa Program with great success.

Minimum real estate investment amount in Portugal

Because of the Portugal Golden Visa changes, in 2023, real estate investment doesn’t make you a permanent resident. The minimum real estate investment amount no longer qualifies for the Golden Visa Program. Regardless, real estate remains one of the best investment opportunities in Portugal.

Real Estate Investing Portugal: Taxes and Costs

For prospective investors interested in making a real estate investment, Portugal has a few tax and cost considerations.

Taxes in Portugal can fall at the time of the real estate purchase or throughout ownership of the property.

The following taxes apply when making a property investment in Portugal:

Property purchase tax (IMT): The IMT tax is a property transfer tax paid when purchasing Portuguese property (levied on the higher of the purchase price or tax value). The tax rate ranges from zero to eight percent, depending on the purchase price, the type of property, the location, and whether it is your 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 tax determined by the municipality where your property is located. The rate ranges between 0.3 percent and 0.5 percent for urban properties and 0.8 percent for rural properties (levied on the tax value of the property).

Additional to IMI (AIMI) Tax: There is an extra annual tax on properties that are valued at more than €600,000. Rates range from 0.7 to 1.5 percent, depending on the property’s value.

Taxes on rental income: If you rent out property in Portugal, your rental income is taxed at 25 percent for long-term rentals and 28 percent for other types. The 25 percent rate, introduced in 2023 under the Mais Habitação package, can be reduced further based on the duration of the rental contract.

Capital Gains Tax: When selling property, the eventual capital gain (profit from the property sale) may be subject to tax. 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 in our Capital Gains Tax Portugal guide.

Other associated property purchase costs to consider for a real estate investment in Portugal:

• Notary fees: €500 – €1,000
• Legal fees: €2,000 – €5,000
• Land Registry fee: €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

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.