Real Estate Maintenance in Portugal: Ultimate Guide

How much does it cost to maintain a property in Portugal?

Real estate maintenance in Portugal is the process that keeps your property (residential or commercial) in optimal shape. It can include property taxes, utility bills, renovation, and preventive maintenance, to name a few.

Real estate maintenance costs in Portugal are inexpensive by Western European standards, but vary depending on the type of property (e.g., an apartment, house, or villa), the location (urban or rural), and the age of the building.

Routine maintenance in Portugal often costs 1 to 2 percent of the property value per year. The average annual running costs for a Portuguese property include:

• For an apartment: €2,000 – €5,000
• For a detached house: €4,000 – €8,000
• For a luxury villa with a garden and a pool: €8,000 – €15,000+

What does it cost to own a property in Portugal each year?

To buy property in Portugal, you don’t have to be a citizen or Portuguese resident. Foreigners can purchase real estate or land anywhere in Portugal without restrictions based on nationality, provided they have a Portuguese tax number (NIF).

The expenses of buying and owning real estate in Portugal include taxes, utilities, condominium fees (if applicable), and repairs and maintenance. The costs of real estate maintenance in Portugal differ based on the type of property.

Buyers pay a Property Transfer Tax (IMT or Imposto Municipal sobre Transmissões Onerosas de Imóveis) and a stamp duty tax at the time of the purchase. The IMT rates are a one-time tax that varies based on the property type and value, while the stamp duty (Imposto do Selo) is often 0.8 percent of the property price.

There are also additional costs for property lawyers and Notary fees (€500 – €1,000).

Homes in Portugal often use the following methods to stay warm:

• Most energy-efficient houses use gas boilers, but many old homes don’t have central heating, so installing it can be expensive.
• Some properties use pellet stoves, which can release smoke. If the house has no chimney, the local council checks whether one must be added.
• Other homes rely on electric heaters, air conditioning units (ACs), or fireplaces. They are some of the most expensive heating methods, but are very popular for most households, as they are convenient and easy to manage.

Internet, TV, and mobile phone packages are different for every region and plan. But, overall, you can expect to spend €50 per month for these services.

If you live in an apartment building, you would pay monthly fees for elevators, cleaning, repairs, security, and sometimes swimming pools. These costs can range from €25 to €200 per month.

Property insurance is not mandatory, but you will need it if you buy a home or take out a mortgage in Portugal. In that case, the bank makes insurance a condition for the loan. For a standard home insurance that covers basic risks like fire or food, you can spend around €300 and €500 per year.

The table below provides a general estimate of the annual costs that property owners bear in Portugal.

 

Real Estate Taxes in Portugal

If you own property or land in Portugal, you pay a local property tax called the Annual Municipal Property Tax or IMI (Imposto Municipal sobre Imóveis). Each municipality sets its own rate, and it changes based on your property’s location, size, and characteristics.

You pay IMI if you own a property or land on 31 December of any given year. The Portuguese tax authorities then charge you IMI for that property in the following year.

Who can get exceptions?

According to Portutax, you could be exempt from the IMI tax if:

• Your household earns less than €15,470 per year, or if your property VPT stays below €67,260.
• You receive a 3-year exemption for your primary residence if the property value is €125,000 or less and your household income is under €153,300 per year.
• You are part of specific groups, such as political parties, historic stores, registered non-profit organizations, and some others.

How to calculate your IMI tax?

You calculate IMI by multiplying the tax rate set by your municipality by the property’s taxable value (VPT):

IMI tax = rate x VPT

Municipalities set the rate every year. Based on PWC Portugal, the IMI tax rate for urban properties is often between 0.3 percent and 0.45 percent, 0.8 percent for rural properties, and 7.5 percent for properties owned by offshore entities.

The VPT (Valor Patrimonial Tributário) comes from the Portuguese Tax and Customs Authority. Many factors affect the VPT rate, like how old the property is, the construction costs, to name a few. It can be very beneficial to hire a local tax advisor to file your taxes properly.

How to pay your IMI tax?

You can pay IMI in different installments depending on the total amount:

• If the total is below €250, you pay it once in April.
• If the total is between €250 and €500, you split it into two payments, in April and November.

What are the property transfer tax rates in Portugal?

When buying property in Portugal, you will pay a one-time Property Transfer Tax (IMT). The exact amount depends on the property type, its purchase price, and whether you will use it as a permanent residence or a secondary home.

Overall, the IMT tax rate for rural properties is 5 percent, while for urban properties not for residential use is 6.5 percent and 10 percent for properties connected to offshore entities. The IMT tax rate for residential properties is progressive, as shown in the table below.

 

For more details on the exact tax rates, read our ultimate guide to property taxes in Portugal.

Cost of Utility Bills in Portugal

Property owners sign contracts with utility providers to get gas, electricity, and water. They then pay for these services based on meter usage.

Electricity prices in Portugal are relatively stable if you compare them to much of Western Europe. To put it into perspective, Portugal has an electricity inflation rate of around 12 percent, which is lower than countries like Belgium (67 percent) and the Netherlands (58 percent).

In Portugal, you can choose between three electricity tariff plans:

• Simples (simple): You pay the same rate all day.
• Bi-horária (double tariff): You pay less at night, from 10 pm to 8 am.
• Tri-horária (triple tariff): You pay different rates depending on the time of day and season. For example, peak prices are often between 8:30 am to 10:30 am and 6 pm to 8:30 pm.

There are different electricity providers in Portugal, but the main ones are Galp Energia, Endesa, EDP, and GoldEnergy.

Gas in Portugal is supplied in different ways depending on the property. In many homes, especially standalone houses and rural areas, gas often comes in portable cylinders, and you can replace it when it is empty.

However, in some newer buildings and urban apartments, gas may be supplied through a centralized network. A typical family of three that uses cylinder gas can go through around one 13-kg cylinder per month, which can cost around €27, including delivery.

Water services depend on the municipality. There are 308 municipalities in Portugal and they all manage separate water providers, so prices vary across the country. Water costs are often more expensive in Lisbon and Porto, while they tend to be more affordable in Faro and Braga.

When it comes to the weather in Portugal, December, January, and February are relatively cold. You can expect to spend more on heating and utilities, since the average temperature can drop between 9°C – 16°C (48°F – 61°F).

Here are the average utility costs in Portugal by region for an 85 square meter apartment (electricity, garbage, water, cooling, and heating):

Source: Numbeo

Property Renovation in Portugal

Renovation is an important element in property maintenance in Portugal. Homeowners should renovate a property to keep it in good shape. It includes roofing, flooring, plastering, and other expenses.

But, how much does it cost to renovate a house in Portugal? The renovation costs are different for each project, but overall, you can expect to spend:

• Roofing: €5,000 – €25,000 (for major roof repairs)
• Flooring: €500 – €1,000 per square meter
• Plastering: €200 – €400 (for fixing a full wall)
• New kitchen: €7,000 – €15,000 (for a full kitchen renovation)
• New bathroom: €2,500 – €3,500

Property owners in Portugal must keep their homes in good condition. In most cases, they perform this type of real estate maintenance in Portugal once every eight years.

Local municipal councils (Câmaras Municipais) actively monitor whether owners complete necessary repairs in their area.

If an owner fails to carry out the required refurbishment, the council can step in and order the work to be done. In such cases, the owner must cover all costs. If a building becomes structurally unsafe or poses a risk of collapse, local authorities can demolish it.

Rent in Portugal

Renting in Portugal is relatively inexpensive compared to the United States and Western European Countries. Apartments for rent in Lisbon can be quite expensive, mainly in the city center, but they remain manageable in the wider metropolitan area.

The table below covers the average rental price for a one-bedroom apartment in Portugal per month.

Source: Numbeo

Services of Management Companies in Portugal

Property management takes time and effort, which is why many homeowners delegate the work to a property manager in Portugal.

Management companies offer different types of services, but mostly take care of the housework, payments, utilities, and ongoing maintenance. When it comes to holiday home rentals, especially when managing tourist rentals with an Alojamento Local (AL) license, many property owners rely on the services of reputable property managers.

A property manager can organize real estate maintenance in Portugal, such as:

• Site visits: They can help negotiate between tenants and owners and check the condition of the property. If you need, a management company can send its employee for an unscheduled inspection if any weather issues or natural disasters happen in the area.
• Utility payments: They can check the meter reading accuracy, how much water or electricity the property spends, and issue the payments on time.
• Repair and maintenance: They can check if any systems need fixing, like gas, water pipes, heaters, AC units, and swimming pools, among others. If something appears broken, they can coordinate with local experts and the property owner to have it fixed.
• Housework: They have skilled staff that can care for the household chores, like cleaning, doing the laundry, washing dishes, ironing clothes, dry cleaning, etc. (if required).

Goldcrest: How We Can Help You 

Goldcrest is the first buyer’s agent in Portugal. 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. 

Unlike traditional real estate agents in Portugal who represent the seller, we are dedicated exclusively to protecting the buyer’s interests. 

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.
• 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. We can also help you buy property remotely.
• 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.