How to Buy Property in Portugal as a Foreigner

Who can buy property in Portugal?

No specific requirements or paperwork are needed for foreigners interested in buying property in Portugal. Citizenship in Portugal, the European Union, or an EEA state (European Economic Area) is not a mandatory condition for property acquisition.

Do the research

Portugal has emerged as a focal point for international property investors, attracted by the country´s diverse landscapes, including beautiful beaches, historic cities, and picturesque countryside as well as warm weather, and rich history.

Here are a few sought-after areas for real estate investments:

  • Lisbon - The capital city, Lisbon, has seen significant growth in real estate demand. Areas such as Chiado, Baixa, and Alfama are particularly sought after. The city´s vibrant culture, historical charm, and growing economy contribute to its popularity.
  • Porto - Portugal´s second-largest city, Porto, is known for its picturesque riverside and historic architecture. The Ribeira district, with its narrow streets and colorful buildings, is a popular area for real estate investment.
  • Algarve - The Algarve region, in southern Portugal, is a popular destination for both tourists and real estate buyers. Towns like Faro, Lagos, Albufeira, and Vilamoura are well-known for their beautiful beaches, golf courses, and pleasant climate.
  • Cascais - Located near Lisbon, Cascais is a coastal town known for its upscale real estate market. It offers a relaxed lifestyle, beautiful beaches, and proximity to the capital.

Where to find properties online:

Financing

Foreigners face no restrictions when seeking a mortgage in Portugal. However, obtaining a home loan is likely to be more straightforward for those with Portuguese residency. Expatriate residents may access higher loan-to-value levels and a broader array of lenders and financing options.

For individuals considering property acquisition under the Golden Visa program, then it is not viable anymore. In October of 2023, Portugal changed their golden visa program to not include real estate investments.

Property Visits and Preliminary Contract

While it´s not mandatory to have a preliminary purchase agreement when buying or selling a house in Portugal, dismissing the idea too quickly might not be wise. Referred to as "contrato de promesa compra e venda" or CPCV in Portuguese, a pre-sale purchase contract between the seller and buyer constitutes one of the initial legal steps in the property transaction process. This agreement acts as a crucial assurance until the final contract is signed, providing a legal framework for the buying or selling process in Portugal.

Due Diligence and Sales Contract 

Conducting thorough due diligence is crucial to verify the property´s condition and uncover any potential hidden issues or liabilities. Seeking assistance from a lawyer or real estate agent experienced in the Portuguese market is advisable for this process. These professionals can aid in tasks such as reviewing and drafting purchase and sale agreements, conducting comprehensive due diligence, and managing the transfer of ownership. Hiring an expert is highly recommended to ensure a smooth and informed property transaction in Portugal.

Property Buying Costs and Taxes in Portugal

Transaction Costs
    Who Pays?
Property Transfer Tax 1.00% - 8.00% buyer
Legal Fees 1.25% - 2.00% buyer
Notary Fees 0.20% - 1.20% buyer
Real Estate Agent´s Fee 3.00% - 6.00% seller
Costs paid by buyer 2.45% - 11.20%  
Costs paid by seller 3.00% - 6.00%
ROUNDTRIP TRANSACTION COSTS 5.45% - 17.20%
Source: Global Property Guide

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