Foreign investors purchasing property has led to a significant boom in the Portugal real estate market. From year-round sunshine to fantastic living standards, from excellent cuisine to a high-quality healthcare system and schooling, international families and expats from all walks of life have been purchasing property in droves.
The good news is that foreigners have the same rights as Portuguese nationals for buying and owning property and land in Portugal. There is no legal distinction based on nationality so that you can own land, apartments, houses, and commercial properties like a Portuguese citizen without any restrictions.
In this ultimate guide on buying property in Portugal, you’ll learn everything you need to know to purchase real estate with confidence and clarity.
Why buy property in Portugal?
There are many reasons why Portugal is the ‘it’ destination for real estate investors. Here’s why you should consider the real estate market in Portugal a profitable investment.
Ten reasons to purchase real estate in Portugal
- Portugal’s growing and stable economy
- The opportunity to find your dream home where there is sunshine all year round
- The cost of living in Portugal is one of the lowest in Europe
- Property investment has high rental yields
- Portugal is a safe place to live, with a high level of political stability
- Portugal is a beautiful country with unspoiled nature and beautiful beaches
- Portugal offers a very high quality of life
- Portugal is a family-friendly country with a strong sense of community
- Portugal is easily accessible from Europe, Africa, and the US
- Public infrastructure such as healthcare and transportation are widely available and accessible.
Can you buy property in Portugal as a foreigner?
Yes, you can. Foreign investors are not restricted from purchasing property in Portugal, and the country has relatively open and straightforward regulations regarding property ownership by non-residents.
Foreigners can purchase various types of properties, including residential homes, commercial properties, land, and investment properties.
Also, you do not need to have permanent residence status or hold Portuguese citizenship to buy property in Portugal. In fact, you don’t even live in the country, as non-residents are allowed to own real estate, and there are no restrictions based on nationality.
Where to buy property in Portugal
There are many places to buy property in Portugal, and the best place for you depends on your budget and the type of property you’re interested in.
You’ll first have to identify what you are looking for and which part of Portugal you would like to live in.
Compared to other European countries, you should find property prices to be quite reasonable.
Each region is unique and offers different advantages. Some places you might like to consider to find the perfect property are:
Lisbon
Lisbon is the capital city and the central economic hub of Portugal. It is a beautiful city filled with history that has seen its stock rise in terms of tourism and commercialization. This makes it a perfect place to buy a property in Portugal, whether for commercial purposes or for living.
It is important to note that property prices in Lisbon have sharply increased, so buying here is now quite expensive, compared with other parts of the country. The most expensive properties in Lisbon can be found in Avenida da Liberdade, Baixa, Chiado, and Lapa.
If you would like to know more, take a look at our guide on where to buy property in Lisbon.
The Algarve
Properties in the Algarve attract everyone from retirees to second homeowners and investors.
It is one of Portugal’s most popular holiday destinations, known for its sunshine, stunning coastline, fresh seafood, top-class golfing, and innate natural beauty.
Easily reachable by plane to and from the UK, it’s no surprise why there are so many English-speaking homeowners in this part of Portugal who own properties such as holiday homes, villas, and beach houses. As a property owner in the Algarve, you can enjoy living in one of the most stunning parts of Europe.
If you would like to know more about real estate in the Algarve, Portugal, take a look at our guide on where to buy property in the Algarve.
Porto
Popularly known as Portugal’s second city, Porto is one of the oldest European centers. It’s a bustling commercial city with a rich historical and cultural heritage.
Home to the famous Port wine, it is a popular tourist destination in Portugal. In terms of property, Porto offers good bargains in many of its districts, such as Ribeira, Foz do Douro, Vila Nova de Gaia, and Vila do Conde.
If you would like to know more, take a look at our guide on where to buy property in Porto.
Cascais
In recent years, Cascais has seen a large influx of Europeans and non-EU nationals buying property. It is considered a popular alternative to buying a property in Lisbon.
This is in part due to its more relaxed environment. The town has beautiful architecture, free museums, and carefully maintained parks.
It is also by the coast, with access to beautiful beaches and other living amenities.
If you would like to know more, take a look at our guide on where to buy property in Cascais.
Other Locations
Some other locations worth considering include the following: Braga, Coimbra, Setúbal, and Guimarães.
For those buying for residential purposes, it might be useful to experience living in different areas before deciding where to purchase a property.
Types of Property in Portugal
Portugal’s real estate market is thriving, with no shortage of property types. If you buy in Portugal, you’ll find that there is something to suit whatever you are looking for – you’ll be sure to find your dream home in the country. From eclectic farmhouses to trendy warehouse-style apartments, beachfront condos, and luxurious villas, the property market in Portugal is quite developed.
There are many different types of homes for sale in Portugal. However, when it comes to buying property in Portugal, there are certain terms you’ll need to get accustomed to.
In the following section, we’ll provide you with some definitions of the most common terms you’ll come across.
- A casa or a moradia refers to a typical detached home, with some houses having a backyard or a patio and most having a wall around them with a front gate.
- A casa geminada simply means a semi-detached house.
- Condomínios or condos are individual apartment units with common spaces. These can be expensive because they come with a monthly condo fee but offer a premium standard of care and safety in return. Many have swimming pools and gyms, etc.
- Quintas are timeless rustic houses or farms. They’re usually located more inland, although some can be found in bustling suburban areas.
- Terreno means ‘land’ in English. Some expats opt to buy a plot of land and then build their own homes. If you go down this route, it’s best to check with the respective city hall (Câmara Municipal) to ensure that the land is registered for residence and not agricultural purposes.
Other terminology to be familiar with
When scouting for a new home, you might see some advertisements with a ‘T0, T1, T2’ and so forth. These numbers mean the number of rooms in a given property. So a T1 would be a one-bedroom apartment, and so on. T0, in this case, means a studio apartment. You’ll find that some of the more luxury properties in Portugal have swimming pools, additional security, or a private gym, which will increase the price.
Property specialists
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As the first buyer’s agent in Portugal, Goldcrest has a clear understanding of the local market and has helped hundreds of people find their ideal property.
Working solely on behalf of the buyer, they secure the best price for you, saving you time and hassle.
Portuguese Real Estate Market Overview
The Portuguese real estate market has become very popular among investors in recent years, especially among investors from abroad. This rise in foreign investment in Portugal’s property sector is largely due to properties being relatively cheaper than in other parts of Europe.
What are property prices like in Portugal?
Due to demand from foreign buyers and investors, Portuguese property prices are generally increasing, especially in the most popular areas (Lisbon, Porto, and the Algarve). Prices in Lisbon have increased exponentially and are much higher than prices in other parts of the country. Analysts are predicting that property prices will continue rising in the immediate future.
Which are the most expensive areas to buy property in Portugal?
Lisbon and the Algarve are by far the most expensive areas to buy property in Portugal. Setúbal, near Lisbon, can be an expensive place to buy property while, in the Algarve, areas such as Lagos, Albufeira, Tavira, and Lagoa, can be quite pricey. For luxury houses and apartments, Vale do Lobo, Quinta do Lago, and Vilamoura are the best places in the Algarve to consider.
Which areas are cheaper?
For cheap homes for sale in Portugal – and great bargains – you should head inland, especially in the central region of Portugal. Another advantage is that many of the houses and land in these parts are very big and spacious. The Silver Coast is also an attractive area for people looking to buy reasonably priced properties, where you’ll find relatively cheap houses for sale near the beach. It is considered by many to be a good alternative to the Algarve, as it also has beautiful coastlines.
Property on the Silver Coast
When you think of beautiful coastlines and beaches in Portugal, the first place that comes to mind is the Algarve, and rightly so, but the next best place with an equally amazing coastline is the often-forgotten Silver Coast. It is situated between Lisbon and Porto, roughly an hour’s drive from the capital, depending on where you live on the Silver Coast.
This wonderful part of Portugal is an excellent alternative to the Algarve to buy a home by the beach, as the property prices are lower. Some places to consider are Óbidos, Peniche, and Nazaré.
Property in the Algarve
The sunny Algarve is one of the top places in Portugal to purchase property or own real estate, either as an investment or for residence purposes. In the Algarve, there is plenty of choice in terms of property types ranging from apartments and villas with a sea view to luxury houses and condos.
The price of a property in the Algarve also varies depending on the region. For example, Vilamoura is known for its luxury homes, making it one of the most expensive places to buy property in the Algarve. Lagos and Albufeira are also expensive areas to buy property. For cheaper properties in the Algarve, you will need to go to areas like Monchique and Alcoutim or more rural areas to find bargain deals. For more information, take a look at this article about how to live in the Algarve.
Lisbon, Portugal real estate
Lisbon property is a prime investment right now, although prices have become massively inflated. Apartments and properties in the downtown area and neighborhoods around the city center have skyrocketed. However, the city is still attracting many foreign buyers and investors looking for second homes or just buying as a financial investment. The most expensive properties in Lisbon are Avenida da Liberdade, Baixa, Chiado, and Lapa. For more information, check out our property guide to the Avenidas Novas district here.
For cheaper properties at more reasonable prices, you may want to consider areas such as Benfica and Amadora.
Cascais and Estoril are alternatives to buying property in the Lisbon metropolitan area. They are both located a 30 to 40-minute drive from Lisbon. Although the real estate prices here are gradually increasing too, and are considered expensive in some areas, properties here still offer great value for money. Oeiras, located between Lisbon and Cascais, is also a good alternative. Check out this article about the best neighborhoods in Lisbon for further information.
Porto, Portugal real estate
The real estate market in Porto is also showing some great signs of growth, and it is generally considered a good place to buy property in Portugal. More and more people are looking for alternatives to the Algarve and Lisbon, where real estate prices are rising rapidly. In this regard, buying a property in Porto also makes for a good investment as it is both a commercial and tourist hub and has a large student population.
There are different types of property to choose from throughout the Porto district. For example, properties in the Foz do Douro neighborhood offer lovely views of the Atlantic, while Vila do Conde is an upcoming area where you can still find great bargains. The Ribeira neighborhood is also a good place to buy, especially for commercial purposes.
Where to look for a property in Portugal
There are many online portals and real estate agencies that advertise properties for sale in Portugal.
Some of them are:
- IMO – https://www.imovirtual.com/en/
- Casa Sapo – https://casa.sapo.pt/en_GB/
- Facebook can also be used to find properties for sale.
Real estate agents can also help you with your search. Estate agent fees are typically covered by the seller and tend to be 3 to 5 percent of the sale price, so bear in mind that they will look to get the best price possible since a higher sale price translates to a higher commission for them. This means the asking price could be inflated to reflect the agent’s commission. As a buyer, be mindful of this and factor in potential negotiation room when considering an offer.
Another way to find a property in Portugal is through a buyer’s agent. Buyer’s agents usually have access to properties for sale that are not advertised on the real estate market and sometimes can get lower prices, too.
Financing a Property in Portugal
If you’re not making a one-time payment for the property you want to buy in Portugal, then you will probably need to understand financing options to pay for the property. The most common is by securing a mortgage loan.
Mortgages in Portugal
You can decide to get a mortgage from a bank in your home country or from Portuguese banks. Some Portuguese banks you can approach for mortgage loans are Santander, Novo Banco, and BBVA.
In most cases, non-residents can get a 25-year mortgage, while residents can get up to 30 years. Also, non-residents will have to put up a 30 percent deposit, while residents are only asked for a 20 percent down payment.
For more information about mortgage loans and financing property in Portugal, you can see our article on financing property.
Working with a mortgage broker
Utilizing a mortgage broker in Portugal can significantly ease the home-buying journey. Many mortgage comparison websites are only available in Portuguese, making broker expertise crucial. These brokers typically work with a panel of banks, offering a wider range of options than you might find on your own. Studies show significant time savings when using a broker; in particular, this can make securing pre-approval quicker. This can be a major advantage in Portugal’s competitive housing market.
Step by Step: How to Buy Property in Portugal
Buying a house can be difficult, whether in your home country or abroad. It can be even trickier when buying abroad with little knowledge about the process. The good news is that the process involved in buying a house in Portugal does not entail too much paperwork, and there are no restrictions on foreign ownership in Portugal.
Here’s a quick breakdown of the steps you’ll need to take to buy a property successfully:
- Step 1: Work out whether you want to take a mortgage and what plan works for you
- Step 2: Try and negotiate the price with the seller
- Step 3: When the price is agreed upon, you’ll need to make a down payment
- Step 4: Sign a Contrato-Promessa De Compra e Venda
- Step 5: Sign and notarize the property deed or Escritura Publica De Compra e Venda
Requirements for a successful property purchase:
A Portuguese tax number
To enter the property market and purchase property in Portugal, whether as a resident or non-resident, you will need to have a Portuguese tax (fiscal) number (número de contribuinte), also known as the tax identification number (NIF) in Portugal. You will also need a tax number to open a bank account.
If you’re a resident of Portugal, this can be obtained at any local tax office (Finanças). You must show proof of your address and passport to obtain a tax number. If you’re not a resident of Portugal or the EU, instead of going to a local tax office, you’ll need to appoint a fiscal representative to apply for an NIF on your behalf
Means of identification
As a buyer, you will need to provide proper identification. It can either be a passport or a Portuguese ID card (Cartão de Cidadão).
A Portuguese bank account
Opening a Portuguese bank account is advisable when buying a property to avoid dealing with frequent changes in the exchange rate.
The property purchase process, documents, and costs in Portugal
Purchasing process
After agreeing on a price with the seller, the next thing is to conclude the purchase process. To conclude the purchase of a property in Portugal, you should do the following:
- Step one – Involve a local lawyer or solicitor if you don’t already have one.
- Step two – Review the terms and Promissory Contract with your solicitor.
- Step three – Both the seller and buyer sign the Promissory Contract. At this point, the buyer is also required to pay a deposit. This is usually 10 percent and will be forfeited if the buyer pulls out of the deal.
- Step four – After the terms of the Promissory Contract have been met, the buyer and the seller or their representatives meet in front of a notary for the final act of sale. The buyer pays the remaining amount, and the seller hands over the key.
Purchase costs
In Portugal, the buyer incurs the following cost upon purchase of a property in Portugal.
- IMT (Property Transfer Tax) – Usually based on the value of the purchase price. Payable at your local tax office or online.
- Stamp Duty – Fixed at 0.8 percent of the purchase price
- Notary fees and Land Registration fee – Usually not more than €600
What documents do I need to buy property in Portugal?
- A passport
- Portuguese tax number (NIF)
Financing Your Property
Step one
Compare the different banks to find the most suitable one for your circumstances.
Step two
Get your documents ready, which include:
- ID Card or Citizen Card
- Duplicates of the last three payroll documents
- Floor plan of the apartment or house in Portugal that you intend to buy
- Documents about other incoming sources (if relevant)
- Credit Report
- Latest income Tax Return and its Notice of Settlement
- Plan of the building
- Bank Statements (in Portugal and overseas)
- Employment confirmation letter
Step three
The bank evaluates the property and determines the Loan-to-Value.
Step four
Get life insurance. In Portugal, you must get life insurance when contracting a mortgage loan.
For more about mortgage loans and financing property in Portugal, see our article on financing property.
Property Taxes in Portugal
When buying a Portuguese property, you’ll need to be aware of your property tax obligations. In this section, we’ll explain the various property tax regulations that apply to property owners in Portugal during and after the property acquisition process.
Property Transfer/Property Purchase Tax (IMT)
The Imposto Municipal sobre Transmissôes Onerosas de Imóveis (IMT) is a municipal property transfer tax that you would be required to pay before you sign the sales agreement. If you’re buying a commercial property, there’s a flat IMT rate of 6 percent. For residential properties, the IMT tax ranges from 0 percent to 8 percent, depending on the value of the property you’re buying
Stamp Duty
When buying real estate, you’re also liable for Stamp Duty (Imposto do Selo). This is generally about 0.8 percent of the deed’s value, and it must be paid at the time of purchase.
Municipal Property Tax (IMI)
The Imposto Municipal sobre Imóveis (IMI) is an annual municipal property tax. It varies depending on your property’s location and type, ranging from 0.3 percent to 0.8 percent.
Wealth Tax (AIMI)
Wealth Tax or Addition to the Municipal Property Tax (Adicional ao Imposto Municipal de Imóveisor, or AIMI) applies to higher-end properties in Portugal. It’s a post-purchase tax applied to any property worth €600,000 or more and owned by an individual. If your property is jointly owned — with your partner, for example — this wealth tax will only apply if the property is worth more than €1.2 million.
The wealth tax rates are as follows:
- 0.7 percent if the property is valued between €600,000 and €1 million
- 1 percent if the property value is between €1 million and €2 million
- 1.5 percent if the property value is more than €2 million
Capital Gains Tax
If you sell your property in Portugal, you could be liable for capital gains tax. Any profit made from the property sale will be considered capital gains.
In the tax return that you file in the year that you buy the property, you will need to include the price that you paid, invoices for renovations and other purchase details. These details will be used in the capital gains assessment. As a general rule, capital gains in Portugal are subject to a 28 percent tax rate.
If you re-invest the total selling price into buying a new home, you could be exempt from some capital gains tax. To qualify for this exemption, you must buy a new property within 24 months before the sale or 36 months after the sale. You should inform the Portuguese tax authorities that you intend to re-invest, and the capital gains tax will be suspended.
When you’ve bought a new property, the tax authorities will calculate your profit and verify that you’ve used it to buy your new home.
Inheritance Tax
While Portugal doesn’t have inheritance tax in the traditional sense, a stamp duty might apply to inherited property for non-exempt beneficiaries. These non-exempt beneficiaries include anyone who is not a descendant (children, grandchildren), ascendant (parents, grandparents), or spouse of the deceased.
Is it worth buying property in Portugal?
What to consider before buying property in Portugal
In conclusion, you may have questions like: Is it the right time to buy? Should I wait? What type of property should I buy? In truth, the answers to these questions are always complex, but one thing is for sure – owning a property in Portugal is a good financial investment.
Bonus tip: If you’re considering buying property to relocate, you may be wondering what to expect in terms of living in Portugal. We’ve got you covered – you can consult our Expats in Portugal guide for more information.
Is it worth buying property in Portugal for rent?
Buying Portugal real estate to rent is an excellent financial investment. It is worth it as there is more demand for accommodation than what is currently available — especially in Lisbon and Porto. Also, rental yields during peak tourism season make property rental in Portugal a viable investment.
Renting versus buying property
This largely depends on what you want to do in Portugal, whether you are looking to live for a long term in the country or have a second home. Either way renting before buying is a popular option amongst expats who move to Portugal as this gives you the opportunity to sample different areas before making a huge commitment to purchasing a place. Some things to consider when deciding between renting or buying are:
Flexibility
In this regard, renting gives you more room and freedom to try out different areas of the country. You can see what suits you better as you are not committed to any place yet. It is also not a huge financial liability in case you decide to move out of Portugal as opposed to trying to sell your property if you decide to leave Portugal.
Security
Owning a home gives you a certain sense of security which renting doesn’t necessarily offer. Although the housing laws in Portugal are generally in favor of the tenant, you are still somewhat at the mercy of the property owner as they can decide to sell the property or even choose not to accept the renewal of your lease.
Portuguese Golden Visa scheme
If you have the financial means, buying a property worth at least €500,000 in an interior part of Portugal can make you eligible for the Portuguese Golden Visa, which allows you to work and live in Portugal as well as have free visa travel in the Schengen area.
Please note that, as of October 2023, Portuguese Golden Visa applicants can no longer buy real estate to qualify for the program.
Take a look at our Portugal Golden Visa Ultimate Guide by local experts
Type of property
In Portugal, renting limits the type of property you will have access to, especially if you’re looking for long-term rents in places like the Algarve. Many homeowners prefer short-term sublets during the high season because of the rental income they make during these periods.
Cost
Generally, the cost of buying a property in Portugal is relatively cheaper than in other European countries. So, it may be a good idea to purchase a property now because the prices are still low and can be sold in the future at a great profit as opposed to paying rent which in real terms is dead money.
Is there a real estate bubble in Portugal?
The Portuguese economy has gradually recovered from its financial crisis and recession. Tourism is booming again, and the housing market is breaking new ground. Generally, the demand for property in Portugal in the major cities right now outweighs the supply of property. This has pushed the prices of property upwards. Also, there are constant renovations of derelict buildings and constructions of apartment buildings, as well as new hotels springing up. This has also led to the gentrification of some neighborhoods recently.
Tourism and increased demand have contributed to the increase in rent and point to a real estate bubble in Portugal, as many properties are being overvalued. The property bubble is set to be around for a while if the interest from foreign investors does not slow down, as they represent the highest number of buyers in the past few years.
Can US citizens buy property in Portugal?
Yes, US citizens can buy property in Portugal. There are no restrictions on foreign property ownership in Portugal. The Portuguese government encourages foreign ownership of property in Portugal. You will, however, need to have a Portuguese NIF number. If you would like to stay in the country for more than three months, you will need to have the appropriate residency to stay in the country.
Can the British buy property in Portugal?
Yes, there are no restrictions on British citizens purchasing property in Portugal. If you would like to stay in the country for more than three months, you will need to have the appropriate residency to stay in the country.
DISCLAIMER: This guide on How to Buy a Property in Portugal is not intended as a substitute for legal advice. Whilst we take care to ensure that all our information for your Portugal search for property is correct and up-to-date, it is important to always rely on professional advice or the relevant legislation when considering your particular circumstances.
Buying Property for the Portuguese Golden Visa
While it’s no longer possible to enter the real estate property market in exchange for a Golden Visa, other investment options are available for this visa scheme.
The Portugal Golden Visa Program is an attractive five-year residency-by-investment program open to all non-EU, non-Swiss, and non-EEA nationals. Qualifying applicants must invest in the nation to obtain a Portuguese residence permit. Portuguese citizenship by naturalization is possible after five years of holding your investment.
You will also be required to adhere to all the rules under Portuguese nationality law, such as holding a clean criminal record. Once you have your permanent residency or citizenship, you’re eligible to start looking into foreign property ownership in Portugal.
Exploring Visa and Immigration Options for Portugal
If you're considering making the move to Portugal, it's essential to be informed about the various visa and residency options available. The Golden Visa Portugal program is an attractive option for many, offering residency to investors and their families. For those eyeing retirement in this beautiful country, the Retirement Visa (D7) is tailored for you. Digital nomads can take advantage of both short and long stay options with the Nomad Visa (D8). Meanwhile, the NHR - Non Habitual Tax regime provides significant tax benefits for new residents.
For the entrepreneurial spirit, Portugal offers the Entrepreneurship/startup Visa (D2) - Start-up Visa (open company) tailored for those looking to establish their businesses in the country. Those with specialized skills can explore the Work visa for highly qualified employees (D3). Additionally, if you have Portuguese ancestry, you might be eligible for Citizenship by descent.
However, moving to a new country isn't just about visas. If you're thinking of buying property, our guide on Buying Property in Portugal can offer invaluable insights. Dive deeper into the immigration process with our comprehensive Portugal immigration guide. For Americans specifically looking to relocate, we have curated information on Americans moving to Portugal. Lastly, one can't forget the importance of the NIF (Tax Registration Number), a crucial step in any relocation process.
Frequently Asked Questions about Buying Property in Portugal
Do I need a lawyer when buying a Portuguese property?
Yes, hiring a lawyer when buying a Portuguese property is advisable. An independent lawyer will act on your behalf and provide a comprehensive understanding of the property market.
What are the additional fees when buying a property in Portugal?
This varies depending on the property you purchase. However, for private property, the total purchase cost should be between 7 percent and 10 percent.
How much do I need for a deposit payment in Portugal?
In Portugal, a deposit for a property purchase is usually 10 percent of the agreed total purchase price.
What are the current average mortgage interest rates in Portugal?
As of April 2024, average mortgage interest rates in Portugal hover at around 4.2 percent. This is slightly higher than the eurozone average. Interest rates can vary depending on the type of mortgage (fixed vs variable) and individual borrower factors. It’s advisable to compare offers from different banks to secure the best possible rate.
Why buy property in Portugal?
Portugal is becoming an increasingly popular place to buy property, whether for the purpose of relocation or real estate investments. This small country in Western Europe has a high quality of life, low costs of living, a good climate, and a steady economy.
Is Portugal a good place to invest in property?
The Portuguese real estate market is inexpensive in comparison to other Western European countries. Recently, the country has seen a period of steady growth, which makes it a good place to invest in.
Is property cheap in Portugal?
The price of real estate in Portugal varies widely, but it is, on average, cheaper than other countries in western Europe. The minimum and maximum price for property will also depend greatly on where you are looking to buy in Portugal. For example, the minimum and maximum prices for property in Lisbon will be higher than in other parts of the country, as it has its own price range.
Can foreigners buy property in Portugal?
Portugal has no restrictions on foreigners buying property in the country. Whether you are buying a house in Portugal as an American, a Canadian, or a British citizen, or if you are from any other nation, you should face no barriers.
To buy property in Portugal, you should obtain a Portuguese tax identification number (NIF) at your local tax office. We recommend opening a bank account in Portugal to avoid transaction fees. You should also ensure you know the taxes involved, such as the Property Transfer Tax (IMT).
What documents do I need to acquire property in Portugal?
To buy a property in Portugal, you’ll need the following documents:
- A copy of your Passport
- A copy of the Portuguese tax number (NIF)
- Proof of address (recent utility bill)
- Your credit report
- Any recent payslips
- Any recent bank statements
- Your most recent tax return
- A copy of the tenancy agreement
Is buying property in Portugal a good investment?
Buying a property in Portugal can be a rewarding investment. Now is a good time to invest because there is a higher demand for accommodation than what is currently available, particularly in Lisbon and Porto. Rental yields in the peak tourist season make short-term rentals a profitable investment.
What is the average house price in Portugal?
When it comes to buying property, the following are averages for Portugal:
- Price per square meter to buy an apartment in the city center – €3,031
- Price per square meter to buy an apartment outside the city center – €2,028
Where do most expats live in Portugal?
The most popular places for expats to live in Portugal are Lisbon, the Algarve, and Porto. You’ll come across many stunning locations in Portugal to live in, and where is best for you will depend on what you are looking for.
Where can I find Portugal real estate beachfront properties?
Portugal real estate beachfront properties can be found across the county. The top locations to consider are the Algarve, Cascais, Setúbal, Sesimbra, Troia, and Comporta. You will also find lovely waterfront properties in Lisbon and Porto.
How does tourism real estate qualify for the Portugal Golden Visa?
Following changes to the Portugal Golden Visa program in October 2023, real estate investments no longer qualify for permanent residency. However, other investment options are available for the program.
How does tourism real estate differ from commercial real estate?
Commercial real estate includes many properties, such as offices, retail, and industry. In contrast, tourism real estate focuses on hospitality-related properties, such as serviced apartments, condominium resorts, and hotel projects.
What are the pitfalls of buying property in Portugal?
The potential pitfalls of buying property in Portugal include hidden costs and market risks. As well as the purchase price, factor in notary and registration fees, property transfer taxes, and potentially legal fees. Portuguese law can hold you liable for some of the seller’s outstanding debts for the property. Additionally, the market, especially in tourist areas, can be competitive, and property values may fluctuate.
It’s important to make sure you understand the taxes and fees you will need to pay during and after the process and do your due diligence checks. Also, make sure that you have good insulation, as it can get cold in the winter.
Working with experts and having a good lawyer is essential to a hassle-free buying process. We also recommend hiring the services of a surveyor to ensure that everything is in order with the property that you are purchasing.
What is IMT tax?
IMT, or Imposto Municipal sobre Transações Onerosas de Imóveis, is a property transaction tax paid by the buyer when there is a real estate property ownership transfer in Portugal.
IMT is the same for both locals and foreigners and ranges from 1 to 8 percent, depending on factors such as the property purchase price, location, if you’ve bought a property in Portugal before, and whether your property has been valued since 2004.
- Pre-2004 valued properties are taxed at 0.4-0.8 percent, while post-2004 properties are charged at 0.2-0.5 percent.
- Properties in rural areas are taxed at 0.8 percent, while properties in urban areas are taxed from 0.3 to 0.545 percent.
For a full overview of the taxes you must pay, including Municipality Tax, property transfer tax, and Stamp Duty, you can consult our article: Property Tax in Portugal: How to Pay Property Transfer Tax.
Is it better to work with a real estate agent or a buyer's agent to buy a house in Portugal?
Choosing between a buyer’s agent and a real estate agent to buy a house in Portugal depends on your priorities. Buyer’s agents prioritize your needs, finding the best deals and navigating the process. Typically representing sellers, real estate agents might have a wider selection and local knowledge. However, the priority for real estate agents is getting the highest price for the seller. Consider a buyer’s agent for strong advocacy and market expertise, especially if you’re new to Portugal.
Always ask about estate agent fees when sourcing a representative for your foreign property ownership.
How much tax will I pay when buying property in Portugal?
The exact amount of tax you’ll pay when buying property in Portugal depends on several factors. Here’s a breakdown of the property taxes involved:
- Transfer Tax (IMT): This tax ranges from 0 percent to 8 percent of the property value. The rate depends on whether it’s your primary residence (usually exempt up to a certain value) and the purchase price.
- Stamp Duty (IS): A flat rate of 0.8 percent is applied to the purchase price for most properties.
- Municipal Property Tax (IMI): This annual tax varies between 0.3 percent and 0.8 percent of the property’s rateable value, depending on the location and type of property (urban or rural).
Can I use cryptocurrencies for buying property in Portugal?
Yes, it’s possible to use cryptocurrencies for buying property in Portugal. The first recorded case of this was in 2022, when an investor used crypto to buy a property in the Portuguese city of Braga. It is also possible to sell a property in exchange for cryptocurrencies.
