Looking for advice about buying property in Portugal for foreigners? Well, you are at the right place. Here, we will guide you through the property costs in Portugal’s real estate industry and the simple steps you need to follow to get a house.
Portugal is one of the few countries that are warm throughout the year, and that offers a vintage touch with its historical buildings and parks. It has become one of the most preferred destination sites for expats to retire or resettle.
It is home to millions of foreigners for its diverse culture, warm weather, and high quality of life. Almost 75% of the Portuguese residents have their own homes. However, the economic crises that hit hard in 2008 also affected real estate.
But the good news is! The Portuguese economy has come a long way, which makes real estate a rewarding industry in which to invest your money. Buying a residential property can get you permanent residence or citizenship in Portugal.
Continue reading, and let us share some advice for foreigners about buying property in Portugal.
What Do You Need to Buy A Property in Portugal?
Buying a property in Portugal is hassle-free and with no hectic legalities and other formalities. You can buy your home or commercial property without any restriction in this country of historical heritage and splendid landscape.
To get your name on a property, you won’t have to fulfill criteria or fill in extra paperwork. Instead, you only require a VAT number known as NIF in Portugal. Now, how to get a VAT in Portugal? That is an easy process. All you need to do is create a Portuguese bank account or get a VAT number from the tax office.
Find out more about Portugal Residence Card by visiting our site.
While buying a property, you will need certain documents, which include:
- ID document
- A photo
- Portuguese Tax number (NIF)
- Energy Certificate
- Land Register
- Mortgage Agreement
What’s the Property Market Like in Portugal?
Portugal’s real estate industry has continuously been growing since 2014. However, it did survive a setback due to the COVID, but with the rise in tourism, it is gaining pace. This industry is growing with the rise in foreign investor interest, which means it is expected to grow with time. This implies that right now is a good time for you to buy a residential property in Portugal.
If you need advice about buying property in Portugal for foreigners, first off, you need to know the price rates of the residential properties in Portugal.
The real estate industry in Portugal has recently witnessed a surge. For instance, the average cost of a residential property in 2023 was 2,510 €/m2, which is more than 7% of last year’s average price. On the other hand, the average price of a home in 2019 in Portugal was 1,877 €/m2.
Although these prices can vary with the concerned area. For example, the average price of a home in the metropolitan area of Lisbon can be as much as 3,869 €/m2, which is a 2% rise in prices. Moreover, the average price of a real estate property in Northern Portugal rose by 6.8% and amounts to 2,096 €/m2. Here is the list of different prices in different areas:
- Central Portugal: rose by 13.4% to an average price of 1,379 €/m2
- Alentejo: rose by 34.4% to an average price of 1,544 €/m2
- Algarve: rose by 15.5% to an average price of 3,130 €/m2
- Azores: rose by 22.6% to an average price of 1,358 €/m2
- Madeira: rose by 20.4% to an average price of 2,483 €/m2
The prices in the US dollar of the residential properties in different cities of Portugal are as follows:
| Location | Price (sqft) in city center | Price (sqft) outside of city center |
| Lisbon | 482.19 USD | 283.33 USD |
| Porto | 301.42 USD | 176.85 USD |
| Coimbra | 224.68 USD | 140.60 USD |
| Faro | 226.03 USD | 164.58 USD |
Advice About Buying Property in Portugal for Foreigners
Buying a property in Portugal is a decision that needs your special attention. But that should not panic you because we are here to give you advice about buying property in Portugal for foreigners. While buying a property in Portugal, you will have some pros and cons. Here is a breakdown of the advantages and disadvantages you will get after buying a house in Portugal:
Pros:
- After you have secured a property in Portugal, you can bring along a Portugal Golden Visa with it. In addition to this, you may get citizenship after six years of ownership of a residential property. Although this scheme is coming to an end, you can get the benefit for the time being.
- If you ask for advice about buying property in Portugal for foreigners, We would say buying a property in Portugal is a solid investment because the real estate industry has great potential yet to be unlocked in Portugal.
- Living in Portugal is less expensive compared to all other countries in Europe.
- The country bears a moderately warm climate, which makes it a hot spot for foreigners seeking a residence in Europe.
- The Global Finance Magazine ranked Portugal as the fourth safest country in the world.
- Portugal offers high-quality education and a well-established healthcare system.
- Most of the locals, in Portugal, can speak and understand English, which implies you won’t have to learn the local language.
Cons:
- In most of the houses, there is no central heating system.
- It might take a longer time for the documentation process to pass through the bureaucratic system.
Here, we have listed the pros and cons, and that’s all you need as advice about buying property in Portugal for foreigners.
How to Buy Real Estate in Portugal?
Once you have decided to buy a property in Portugal and set your budget, you can proceed with the buying process. We have broken down the process of buying a property in Portuguese real estate into the following steps:
- The process commences with your decision to choose a suitable mortgage for yourself. This will give you an idea of your budget.
- Engage with a realtor and get their help to check the contracts. Also, make sure that the property that you have selected is surveyed. Afterward, you can make an offer to the seller.
- Sign the contract with the notary, which can range between 1% to 10% of the price of your property.
- Now, you should pay the property transfer tax.
- Lastly, sign the Deed of Purchase and Sale and get the property registered in your name.
What Kind of Taxes and Fees Will You Need to Pay?
In addition to the residential prices, you will also need to pay taxes and fees while buying a property in Portugal. If you are planning to buy a property in Portugal, look into your bank balance as well.
Buying a property in Portugal might cost you much. It can include stamp duty, legal fees, Notary and registration fees, and exchange rates.
Here is the list of fees and taxes you need to pay:
| Stamp duty | 0.8% |
| Legal fees | 1%-2% |
| Notary and registration fees | 0.2% – 1.2% |
| Property transfer tax (IMT) | Only for houses that cost more than 92,407 EUR |
| Exchange Rate | Variable |
How Can You Find Real Estate in Portugal?
Do you need advice about buying property in Portugal for foreigners? Well, if you want professional advice, you can get a piece of advice through:
- Real-estate Agent
- An online portal that brings together the buyers and the sellers in one place.
- Word of mouth. You can get suggestions from the locals and find the best place for yourself.
If you consult a real estate agent for advice about buying property in Portugal for foreigners, they might charge you 3% to 5% of the property’s price as their fees or commission. If you are a buyer, you need not worry about the agent’s fees because these fees are covered by the sellers.
In addition to this, you can get advice about buying property in Portugal for foreigners using online portals like
- Century 21: You can download their application and get the information in the English language.
- Proper Star: It is an application programmed in the English language with multiple features. You can add multiple filters by countries and cities.
- ERA: This is a Portuguese website where you can search properties based on their type and location.
Avoiding Scams and Pitfalls
If you are following our advice about buying property in Portugal for foreigners, we suggest you interact with only realtors who are properly registered. That way, you will be able to ward off any risks of scams and pitfalls.
Keep in mind that every realtor in Portugal is expected to be registered through a proper body, which is named Associação de Mediadores Imobiliários. They should also hold a license number while they are giving you advice about buying property in Portugal for foreigners.
You can also avoid fraud by checking the credentials of your realtor by talking to Instituto da Construção e do Imobiliário, a legal body responsible for construction and realty.
