Updated: May 15, 2023
If you are considering purchasing real estate, the type of property ownership in Portugal is important to define before you begin the buying process. This article will delve into the property ownership rights that can be acquired within the real estate market in Portugal.
Property Ownership Restrictions
One of the advantages of buying property in Portugal is that real estate can be freely acquired by foreign investors. If you are a foreign national, you will face no restrictions when buying property.
If you are looking to buy property in Portugal as a foreigner, you will need to ensure that you have the legal right to live in the country. There are many visa programs that you could apply for, such as the D7 Visa. If you move to Portugal, you also may be eligible for significant tax advantages for up to ten years.
You can consult our article on the NHR program for more information. You should be aware that to make any type of significant financial investment or contribution, from buying property to opening a Portuguese bank account, you will need to have a NIF number (Portuguese tax number). You can obtain this number online, through a service such as GetNifPortugal, or by visiting a local tax office in Portugal. Note that if you are a non-EU, non-EEA, or non-Swiss citizen, you will need to have a financial representative.
What type of property ownership in Portugal should you opt for?
From tax advantages to liability pitfalls, each type of property ownership will have its own pros and cons. It is fundamental to understand each one clearly before purchasing property in the Portuguese real estate market.
Full ownership or freehold
This type of ownership provides the owner with the exclusive rights to possess the property, including the land on which the property is built on. If you buy a freehold property, you are, therefore, responsible for the maintenance of both the property and the land that it is situated on. As such, you will need to budget for these costs. Most properties fall under this category.
Surface right
With surface right ownership, you will have the right to build and maintain the building using the property under a third party’s land. This includes planting any crops on the piece of land. Surface land ownership can be created for either a defined period of time or can be perpetual. When the surface right comes to an end, the owner of the land becomes the owner of the property on the land.
Usufruct
Usufruct properties consist of a right to use and enjoy a third party’s property for a set time period. This cannot extend after the death of the beneficiary or be granted for periods that exceed 30 years.
The beneficiary is able to use the property in the same way as if he was the owner of the property and can obtain natural profits, civic profits, and industrial profits, so long as the original economic function of the property is maintained.
Right of use
Right of use properties involves the right to use a third party’s property. The property can be used to meet your specific needs or the needs of your family.
Co-ownership
Co-ownership of properties is not the most common type of property ownership in Portugal. Co-ownership usually happens in timeshare properties (typically resort condominium units) where you buy with other investors into the same project or unit.
