Buying a House in Portugal as a Foreigner: Property Guide

Portugal's real estate market overview

Despite a 25% decline in property sales last year (2023), prices were on the rise, up 10%. The property market in Portugal is a valuable one, reaching a swooping 1.2 trillion dollars—an impressive amount for such a small country.

For the past few years, Portugal has been a top destination for real estate investors wishing to acquire and develop property.

Despite these statistics, the country remains an economical option for anyone looking to relocate or invest.

Property value per region

Several locations in Portugal, even urban centers, continue to be less expensive than in other countries.

Property in the countryside, on the other hand, tends to have a lower value, but keep in mind that, due to the country's small size, you are never more than two hours away from an urban center.

How is housing classified in Portugal?

In Portugal, properties are divided in two designation:

• Apartments: Addressed as (T)
• Houses or Villas: Addressed as (V)

For example, a property with three rooms is considered T3 or V3. If it's a studio, it should be T0 or V0.

The numbers always indicate the amount of bedrooms.

⚠️ A few properties may show T/V 1+1 or T/V 2 + 1. Usually, the plus one indicates the transformation of a different room into another bedroom.

And what are the categories for property in Portugal?

• ‘Apartamento’: Condo or apartament
• ‘Quinta’: Farm or country property
• ‘Casa': House
• ‘Casa geminada': Semi-detached house
• ‘Terreno’: Land

Where can I buy a house in Portugal as an expat?

Lisbon

Lisbon and its surrounds, known as the Lisbon Metropolitan Area (AML), are the country's capital and economic center, an expat hub, and a tourism powerhouse, suitable for individuals looking to invest and rentabilize using AirBnB. The location has the highest price per square meter.

Porto

Porto and its Metropolitan Area (AMP) are the cultural and industrial hubs of the country. Porto, the most populous area in Portugal, has a significant tourist influence. As the second most significant area, it suffers from higher property prices as a result of increased activity.

Braga

Braga is Portugal's third-largest city, part of the AMP, and home to one of the country's largest universities, the University of Minho. Students and foreigners love the neighborhood for its proximity to Porto, superior infrastructure, and lower pricing than Porto, making it an attractive investment opportunity. Those wishing to live here adore the area because it strikes a good mix between urban and rural life.

Algarve

Tourist activity has a tremendous impact on the Algarve region. There are numerous properties that cater solely to guests in the area. Furthermore, the area is a popular vacation spot for European retirees and summer visitors who own second houses along the coast. Prices are rising here, either due to tourist traffic or property speculation. The property market is thriving, with both luxury and normal properties available.

Alentejo

The ideal solution is for those looking to avoid urban centers and focus on a quiet and fulfilling life. Alentejo is the country's agricultural region, with several 'quintas' available for those wishing to live the country life. Foreigners commonly purchase large areas in the region to enjoy its tranquil lifestyle. Prices are low here due to the reduced size of cities.

Setúbal

Setúbal is a bustling part of the silver coast, embracing two hotspots for those aspiring for a beach life or a coastal investment. The region is home to both Sesimbra and Comporta, which are filled with resorts and foreigners. Add to that easy access to Lisbon due to its proximity, and you'll find a gem to either live in or invest in. invest in.

What is needed to purchase a property in Portugal?

Can I buy a house in Portugal as a foreigner?

Yes, you can!

There are no restrictions whatsoever on expats buying property in Portugal. Foreigners enjoy the same rights as Portuguese people when it comes to purchasing and possessing property, including land.

What are the required documents for a foreigner to buy property in Portugal?

To purchase a property in Portugal as a foreigner you must provide:

• Photo ID (Passport);
• Portuguese NIF;
• Property's energy certificate;
• Contrato Promessa de Compra e Venda (CPCV - Promise Contract of Purchase and Sale);
• Proof that the IMT is paid;
• Imposto do Selo (Stamp Tax);
• Caderneta Predial (Land Register);

Portuguese NIF

The NIF is the Portuguese tax number, and you need it before the deed: the IMT is declared under your NIF, and the land registry records it. You don't have to live in Portugal to have one: get your NIF online from abroad.

Property's energy certificate

Provided by the seller, it's an essential document that states the energy efficiency of the property.

Contrato Promessa de Compra e Venda

A purchasing contract stating the terms of the transaction.

Proof that the IMT is paid

The notary or lawyer can't sign the deed without it: see the taxes below.

Imposto do Selo

Tax stamp duty required by authorities when purchasing a property.

Caderneta Predial

Land or property official register. A certificate stating all information about the real estate.

What are my financial options to purchase a property in Portugal?

If you do not have the full payment to invest in a property, you may be eligible for a mortgage to finance your future house with a Portuguese bank for non resident or a credit agency.

Can I finance a house in Portugal as an expat?

It depends on your conditions!

You must provide the following documents to be analyzed and approved for a mortgage in Portugal as a foreigner:

• Proof of income (salary, pension, investments, dividends, capital gains)
• NIF Portugal
• Photo ID (Passport)
• Proof of Address
• Credit report/score (in Portugal and in your home country)
• Tax return
• Rental agreement or any other property deed
• Recent payslip or bank statements

⚠️ When applying for any financial loan in Portugal, you must also purchase a life insurance. It's a law.

Where can I finance a house in Portugal as a foreigner?

You can try any bank or financial agency that specializes in it. We can recommend two partners who are focused on mortgages for foreigners in Portugal.

Cafimo

Cafimo is a reliable credit agency that finds the best options for a mortgage loan at several banks in Portugal, according to your conditions. They also offer the best mortgage calculator in Portugal, making it easy to estimate and plan for your loan.

Millenium Bank

Millenium is one of Portugal's most prestigious banks, with a wide range of foreign clients. It's a solid and traditional company in the country, with accessible rates and management.

Is there any down payment to be made when purchasing a house in Portugal as a foreigner?

Yes!

When signing the CPCV, you must pay 10% of the property's value before finalizing the deed.

Where can I find a property in Portugal as a foreigner?

By yourself

• Olx
• CustoJusto
• Imovirtual
• Facebook groups
• Idealista

Portuguese way: Facebook groups, OLX, CustoJusto and Idealista

Most Portuguese residents use groups on Facebook, Olx, Custojusto, or Idealista to find property solutions.

However, given the high number of scams, it's crucial for non-residents to exercise extra caution when using these options.

Agencies

• Remax
• Century21
• ERA
• Savills
• Sotheby's
• Berkshire Hathaway
• Portugal the Place
• De Brito Properties

De Brito Properties

De Brito Properties has a team specializing in foreign contracts.

With an affordable rate, it's a fantastic solution if you want to have the assistance of a property broker, ensuring a successful and safe transaction from beginning to end.

What should I do if I want to purchase a property in Portugal as a foreigner?

If you want to buy a house as an expat in Portugal, follow these steps:

1. Establish your budget

Define the amount you are willing to afford, either with a mortgage or in a single payment; remember to convert it to euros.

2. Choose the region

Portugal is a tiny country, but it has a diverse geography. Each area has its particularities, and you must take into consideration your priorities. If you feel you need to be near a vibrant urban center, you may not choose to move to the lower area of Alentejo, for example. Do your research!

3. Define what type of property you wish to invest

Either a condo, a beachfront house, or a charming quinta, the type of property you wish to buy may determine where you'll live or invest as well.

4. Find a broker or agent in Portugal

Though you can do it by yourself, we highly recommend you get in touch with a broker to better evaluate your options and provide a resident's perspective.

When investing in Portugal, an agent will also be extremely helpful in understanding the fees, taxes, and procedures.

5. Find your house in Portugal and make an offer

After considering your options, make a proposal. This is another reason why an agent can be of tremendous assistance at this moment. Keep in mind that you'll be dealing with a different culture, and negotiation may be challenging.

6. Reservation agreement

Once your offer is successfully accepted, you must sign a reservation agreement, it's a preparatory document for the CPCV. At this moment, you must make a payment of up to 10,000 euros, and this value can be refunded (when stated in the agreement) if the negotiation does not go forward.

7. Ensure the CPCV - Promise Contract of Purchase and Sale

It's time to sign the Contrato Promessa de Compra e Venda (CPCV). You and the seller must sign the contract in front of a notary. At this moment, you must make a down payment equal to 10% of the property.

This is the essential document to secure your house and sign the deed.

⚠️ Ensure you have a property lawyer before signing the CPCV. They must review all terms and conditions of your transaction.

8. Sign the deed of your house in Portugal

This is the final step that will formalize the ownership of your new property. You must sign it in front of a notary, just like with the CPCV, and pay the remaining property value at this moment.

After this, the property is all yours!

What taxes must I pay if I want to buy a house in Portugal as an expat?

IMT

Imposto Municipal sobre as Transmissões Onerosas de Imóveis (IMT) or Property transfer tax is calculated on the price or the property's taxable value, whichever is higher. It's paid once, before the deed: on the day it is assessed or within 30 days.

• Tax resident in Portugal: 0% up to €106,346 on your permanent home, then 2% to 8% by bracket, and a flat 6% or 7.5% above €660,982. Any other home starts at 1%.
• Not tax resident: a flat 7.5% on a home since May 2026, with no exemption or reduction. If you become tax resident in Portugal within two years of the purchase, or let the home at a capped rent (within six months, for at least 36 of the first 60 months), you can ask the tax office for the difference back, within six months of becoming resident or signing the lease.

Imposto do Selo

Stamp duty is 0.8% of the price or the property's taxable value, whichever is higher.

It is paid once, at the time of the purchase.

Notary services

As a private entity, you'll also need to pay the Notary's fees and land registration.

It ranges between 0,2% and 1,2% and it's paid once when purchasing the property.

What taxes must I pay after I purchase a house in Portugal as a foreigner?

IMI

Imposto Municipal sobre Imóveis (IMI) or Municipal Property Tax is an yearly tax based on the value of the property.

It ranges between 0,3% to 0,8% depending on the type of the property. You pay it the year after, in one, two or three installments according to the bill: see when IMI is due.

Do I need a lawyer to purchase a property in Portugal as a foreigner?

You don't need it, but you should.

Keep in mind that you are an expat, may not speak the language, and are not fully aware of fees, taxes, laws, and financial procedures in Portugal.

We highly recommend hiring a real estate lawyer.

Frequently asked questions

Final words

Buying property in Portugal as a foreigner is a profitable investment. Portugal has a lot to offer, including breathtaking scenery, a rich culture, and excellent living conditions.

You may effectively buy your dream home in this beautiful country if you understand the market, navigate legal procedures, and financially plan for it.