buying property in portugal

The Ultimate Guide to Buying Property in Portugal: What Expats Should Know

Portugal has become one of the most attractive countries in Europe for international property buyers. Thanks to its combination of sunny climate, rich culture, affordable cost of living, and investor-friendly policies, the country has lured a diverse range of buyers—from retirees and remote workers to property investors and holiday homeowners.

For those interested in settling down, investing, or simply owning a scenic European getaway, buying property in Portugal offers exciting potential. Whether you're looking at a modern apartment in Lisbon, a historic villa in Porto, or a coastal cottage in the Algarve, the Portuguese real estate market has options for every budget and lifestyle.

Why Portugal Is a Top Choice for Property Buyers

Portugal’s appeal goes beyond just picturesque cities and ocean views. The country ranks high for safety, healthcare, quality of life, and ease of integration—making it a smart long-term decision. It also boasts:

Mild Climate: Over 300 days of sunshine annually in many regions.
Accessibility: Direct flights to major European and North American cities.
Residency Options: Investor-friendly visas such as the Golden Visa and D7 Visa.
Tax Incentives: The Non-Habitual Resident (NHR) scheme offers significant tax advantages for foreign residents.
Stable Market: While prices have risen in popular areas, the market remains more affordable than in many Western European countries.

What Types of Properties Are Available?

Portugal offers a diverse range of property types:

City Apartments: Great for those who want to live close to amenities, culture, and employment opportunities.
Traditional Villas: Found in the countryside or coastal areas, often with land and rustic charm.
Modern Townhouses: Common in suburban areas, providing space and comfort for families.
New Developments: Especially in areas like Lisbon and Porto, these offer energy-efficient and stylish options with modern amenities.

Buyers can choose between new builds or “used” homes (resale properties). Older homes may offer character and lower prices, but may also require renovation and upgrades to meet modern standards.

Understanding the Buying Process

The process of purchasing real estate in Portugal is relatively straightforward but differs in some respects from other countries:

Get a Fiscal Number (NIF)
This tax identification number is essential for opening a Portuguese bank account, signing a contract, and paying taxes.
Hire a Lawyer or Solicitor
While not mandatory, legal representation is strongly recommended to navigate property documents, due diligence, and negotiation.
Secure Financing
Non-residents can obtain mortgages from Portuguese banks, typically covering up to 70% of the property’s value.
Promissory Contract (Contrato de Promessa de Compra e Venda)
After initial agreement and due diligence, a formal contract is signed with a deposit (usually 10%-30%).
Final Deed (Escritura de Compra e Venda)
This final document, signed in front of a notary, transfers ownership. The buyer pays the remaining balance, taxes, and fees.

Costs and Taxes to Consider

Aside from the purchase price, buyers must account for:

IMT (Property Transfer Tax): Based on property value and purpose (residential vs. investment).
Stamp Duty: Fixed at 0.8% of the property value.
Legal and Notary Fees: Vary but generally amount to 1%-2% of the purchase price.
Registration Fees: For recording the new ownership with the land registry.

Annual property taxes (IMI) also apply, and the rate depends on location and property type.

Popular Locations for Property Investment

Here are some top spots where expats frequently buy:

Lisbon: Offers luxury apartments, great rental potential, and urban lifestyle appeal.
Porto: Portugal’s cultural capital of the north with a more relaxed feel and slightly more affordable prices.
The Algarve: Perfect for retirees and vacation property investors; known for its beaches and resorts.
Silver Coast: A hidden gem with coastal towns like Nazaré and Óbidos that offer scenic beauty without the crowds.
Central Portugal: Inland areas like Coimbra and Castelo Branco are gaining popularity for low prices and peaceful surroundings.

Residency and Visa Implications

Owning property in Portugal can be a path to residency, especially under the Golden Visa program, which—though updated in recent years—still allows investment in specific areas and types of properties that qualify. Alternatively, the D7 Visa caters to retirees and remote workers with passive income.

Property ownership alone does not automatically confer residency, but it can strengthen your case when applying for long-term stays.

Tips for a Successful Purchase

Work with a Reputable Agent: Choose professionals who are familiar with the local market and fluent in English (if needed).
Visit the Property: Don’t rely solely on photos; in-person visits or virtual tours can reveal crucial details.
Check Infrastructure: Especially in rural or remote areas, verify access to reliable utilities, internet, and transport.
Beware of Renovation Costs: If buying an older home, get an independent inspection to assess needed work.
Think Long-Term: Consider resale value, community development, and your personal goals.

Final Thoughts

Buying a home in Portugal can be a rewarding and profitable venture—whether you're relocating, retiring, or investing. With its balanced lifestyle, welcoming environment, and strong property market, Portugal continues to draw interest from around the world.

To learn more and take your first steps toward buying property in Portugal, consult local experts, explore various regions, and most importantly—enjoy the journey. The perfect home, whether nestled in a vineyard or overlooking the sea, may be waiting just for you.