How to Buy Property in Portugal: Complete Guide For Expats In 2025

Portugal has become one of Europe’s most attractive destinations for property buyers, thanks to its warm climate, strong real estate market, and relatively affordable property prices compared to other Western European countries. Whether you’re looking for a vacation home, an investment property, or a permanent residence, Portugal offers a range of options, from coastal villas in the Algarve to historic townhouses in Lisbon and Porto.

Buying property in Portugal as a foreigner is a straightforward process, with no restrictions on non-residents purchasing real estate. However, it’s essential to understand the legal and financial aspects of the transaction to ensure a smooth and secure purchase. This guide will walk you through everything you need to know, from financing and legal requirements to the best locations to buy and how to avoid common pitfalls.

Why Buy Property in Portugal

Portugal has become a top destination for property buyers, offering a mix of affordability, investment potential, and a high quality of life. Whether you’re looking for a vacation home, a rental investment, or a place to retire, Portugal provides numerous advantages that make buying property an attractive option.

One of the biggest reasons to buy in Portugal is the affordability compared to other European countries. While property prices in Lisbon and Porto have risen in recent years, they remain lower than in major cities like London, Paris, or Barcelona. Outside of these cities, areas such as the Algarve, Silver Coast, and Alentejo offer beautiful properties at even more competitive prices.

Portugal is also considered a safe and stable country, ranking among the most peaceful nations in the world. Its strong property laws and clear regulations make it a secure place for foreign buyers, with no restrictions on non-residents purchasing real estate.

For investors, Portugal’s strong rental market is another advantage. With a booming tourism industry, short-term rentals in popular destinations like Lisbon, Porto, and the Algarve generate attractive rental yields. Additionally, long-term rentals in growing expat communities offer steady income opportunities.

The country’s favorable tax policies also appeal to property buyers. Portugal’s Non-Habitual Resident (NHR) program has provided significant tax benefits for foreign residents, and while changes have been made to the program in 2024, the country remains tax-friendly for many expats. Additionally, property taxes (IMI) are relatively low compared to other European countries.

Beyond financial benefits, Portugal offers an exceptional quality of life. With over 300 days of sunshine per year, stunning coastlines, and a relaxed Mediterranean lifestyle, Portugal is ideal for those looking to escape colder climates. The country’s healthcare system, reputation for safety, and rich cultural heritage make it an appealing long-term destination.

Whether for personal use or investment, buying property in Portugal presents a unique opportunity to own real estate in one of Europe’s most desirable locations.

 Portugal’s southern Algarve region is the one of the most popular spots in the country for both vacationers and expats. ©Shutterstock.com/imageBROKER.com

Understanding Property Laws in Portugal

Portugal has a transparent and well-regulated real estate market, with no restrictions on foreign buyers purchasing property. Whether you are an EU citizen or a non-EU national, the process of acquiring real estate in Portugal is relatively straightforward, provided you follow the legal requirements.

To buy property in Portugal, both residents and non-residents need to obtain a Número de Identificação Fiscal (NIF), which is a Portuguese tax identification number. This is required for all financial transactions, including opening a bank account and signing a property purchase contract. The NIF can be obtained through a Portuguese tax office (Finanças) or with the help of a lawyer.

Foreign buyers are granted the same full property rights as Portuguese citizens, meaning they can purchase homes, land, or commercial real estate without any special permissions. However, buyers must ensure the property has clear legal ownership, with no outstanding debts, liens, or zoning violations. A land registry check (Certidão Permanente) is essential to verify the property’s legal status and history.

Portugal also offers a Golden Visa program for investors, though recent changes (as of 2023) have removed real estate purchases as a qualifying option. Instead, investors must contribute to sectors like venture capital funds, job creation, or cultural and scientific projects to obtain residency. Despite this change, Portugal remains an attractive market for property buyers due to its stability and long-term investment potential.

While Portugal does not require foreign buyers to have a lawyer, it is highly recommended to work with a real estate attorney to handle due diligence, review contracts, and ensure the transaction complies with Portuguese law. Additionally, a notary public (notário) is required to oversee the signing of the final deed (escritura pública), making the sale legally binding.

Overall, Portugal’s property laws favor foreign ownership, and with proper legal guidance, buying real estate in the country is a secure and straightforward process.

Steps to Buying Property in Portugal

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Portugal’s Silver Coast is famous for its sweeping beaches and its powerful waves that attract surfers from all around the world. ©Shutterstock.com/Zdenek Matyas Photography

Whether purchasing for personal use or investment, there are a number of steps you must take when buying real estate in Portugal. And with the right guidance, this process can be secure and straightforward. Here’s a step-by-step guide to purchasing real estate in Portugal:

1. Obtain a Portuguese Tax Number (NIF)
Before purchasing property, you must obtain a Número de Identificação Fiscal (NIF) from a Portuguese tax office (Finanças). This tax identification number is required for all financial transactions in Portugal, including opening a bank account and signing a property contract. Non-residents may need a fiscal representative to obtain their NIF.

2. Secure Financing (If Needed)
If you require a mortgage, it’s best to consult with Portuguese banks early in the process. Both residents and non-residents can apply for a mortgage in Portugal, but non-residents may face stricter lending conditions. Portuguese banks typically offer financing up to 70% of the property’s value for foreign buyers, with interest rates ranging from 3% to 5%.

3. Find the Right Property
Use reputable real estate websites like Idealista, Imovirtual, and Casa Sapo, or work with a licensed real estate agent (imobiliária) who understands the local market. Visiting properties in person is highly recommended to assess the location, condition, and surroundings.

4. Conduct Due Diligence
Once you’ve chosen a property, your lawyer should perform legal checks to verify:

• Land Registry Certificate (Certidão Permanente) is used to confirm ownership, property boundaries, and any debts or liens.
  
• Tax Records (Caderneta Predial) are required to ensure the property is properly registered with the tax office.
  
• Housing License (Licença de Habitação) is required for residential properties, confirming the home meets legal living standards.
  

5. Sign the Promissory Contract (Contrato de Promessa de Compra e Venda)
Once due diligence is completed, both parties sign a promissory contract, which outlines the terms of the sale, price, payment structure, and completion date. At this stage, the buyer typically pays a deposit of 10% to 30% of the purchase price. If the seller backs out, they must return double the deposit as compensation. If the buyer backs out, they forfeit their deposit.

6. Finalize the Purchase with a Notary
The final deed (Escritura Pública de Compra e Venda) is signed in the presence of a notary public (notário), who ensures the legal transfer of ownership. At this stage, the full payment is made, and the property’s title is officially transferred.

7. Register the Property
After the purchase is complete, the property must be registered in the buyer’s name with the Land Registry Office (Registo Predial) and the Tax Authority (Finanças). This step ensures legal ownership is updated, and the new owner is responsible for property taxes.

8. Plan for Ongoing Costs
After purchasing, homeowners should budget for ongoing costs, including property taxes (IMI), utilities, homeowners’ association fees (if applicable), and maintenance expenses.

While Portugal does not require foreign buyers to live in the country, those planning long-term stays should consider applying for a residency visa. The most common options include the D7 Visa (Passive Income Visa) for retirees and remote workers, and the Digital Nomad Visa for remote professionals. Portugal’s Golden Visa program no longer includes real estate investment as an option, but there are alternative investment routes available for residency seekers.

Foreign buyers looking for a permanent home should be aware that after five years of legal residence, they may apply for permanent residency or Portuguese citizenship, provided they meet the language and integration requirements. This makes Portugal an attractive option for those seeking both real estate investment and long-term settlement.

Costs and Taxes When Buying Property in Portugal

Buying property in Portugal involves several costs beyond the purchase price. Understanding these expenses upfront helps buyers plan their budget and avoid unexpected fees.

Property Purchase Taxes

• IMT (Imposto Municipal sobre Transmissões Onerosas de Imóveis) – This is a property transfer tax, calculated based on the property’s value and location. Rates vary from 0% to 7.5%, with primary residences benefiting from lower rates. Properties under €104,261 are exempt from IMT.
  
• Stamp Duty (Imposto do Selo) is a fixed 0.8% tax on the declared property purchase price.
  

Notary and Registration Fees

• The final deed signing with a notary typically costs between $500 and $1,000, but costs can vary depending on the complexity of the transaction.
  
• Land Registry Fees to officially register the property under the new owner’s name cost between $250 and $500, in addition to the registration fees.
  

Legal and Administrative Fees

• Hiring a real estate lawyer is highly recommended, with fees of approx. 1-1.5% of the purchase price of the property you’re buying, plus VAT.
  
• If obtaining a mortgage, expect to pay bank fees of 1% to 2% of the loan amount.
  

Ongoing Property Costs

• IMI (Imposto Municipal sobre Imóveis) is an annual property tax ranging from 0.3% to 0.8% of the property’s taxable value, depending on location. Some newly purchased properties may be exempt for the first three years.
  
• Condo fees apply if you are purchasing in an apartment building or gated community, expect monthly condominium fees ranging from $50 to $500, depending on amenities and services.
  
• Utilities such as water, electricity, and internet costs typically range from $125 to $250 per month, depending on property size and usage.
  

Estimated Total Closing Costs

Buyers should budget between 6% and 10% of the purchase price for taxes and fees. While Portugal’s real estate costs are relatively low compared to other European countries, it’s essential to factor in these additional expenses when planning a purchase.

With proper budgeting and legal assistance, buyers can ensure a smooth transaction and avoid unexpected financial surprises when purchasing property in Portugal.

Best Places to Buy Real Estate in Portugal

The northern city of Porto is famous for its port wine and beautiful riverfront. ©Shutterstock.com/prosign

Portugal offers a diverse real estate market, with options ranging from bustling city apartments to coastal villas and countryside retreats. The best location depends on your lifestyle, budget, and whether you’re buying for personal use or investment.

Lisbon:
Portugal’s capital is a prime location for real estate investment, with strong rental demand and property appreciation. The city offers a mix of historic apartments, modern high-rises, and waterfront properties along the Tagus River. While prices are higher than in other regions, averaging $5,000 to $8,000 per square meter, Lisbon remains attractive for those seeking urban living and business opportunities.

Porto:
Known for its rich culture and picturesque riverfront, Porto is slightly more affordable than Lisbon, with property prices ranging from $3,500 to $6,000 per square meter. The city has a growing expat community and strong tourism appeal, making it ideal for both residential and short-term rental investments.

The Algarve:
Portugal’s southern coast is famous for its beaches, golf courses, and year-round sunshine. Popular areas such as Lagos, Albufeira, and Vilamoura attract retirees and vacation home buyers, while Faro and Tavira offer more affordable options. Property prices in the Algarve range from $2,500 to $5,000 per square meter, depending on proximity to the coast.

The Silver Coast:
For buyers seeking affordability without sacrificing ocean views, the Silver Coast (Costa de Prata) is an excellent choice. Towns like Nazaré, Peniche, and Óbidos offer lower property prices ($1,500 to $3,500 per square meter) and a quieter lifestyle compared to Lisbon and the Algarve.

Cascais and Estoril:
Just 30 minutes from Lisbon, these coastal towns offer luxury living, beachfront properties, and a relaxed lifestyle. While prices are high ($6,000 to $10,000 per square meter), Cascais is a top choice for wealthy expats and professionals who want to live near the capital while enjoying the seaside atmosphere.

Madeira and the Azores:
For those looking for island living, Madeira and the Azores offer stunning landscapes, mild weather, and lower property prices than mainland Portugal. Madeira, in particular, has seen an increase in digital nomads and expats, with properties averaging $2,000 to $4,500 per square meter.

Risks of Buying Property in Portugal

While Portugal is a great place to invest in real estate, buyers should be aware of potential risks to avoid costly mistakes. Understanding these risks and taking precautions will help ensure a smooth and secure property purchase.

One of the most common risks is bureaucratic delays and complex paperwork. The legal process in Portugal can be slow, particularly when dealing with planning permissions, renovations, or registering property ownership. Hiring a qualified real estate lawyer will help navigate the system and ensure all documentation is in order.

Another concern is hidden property debts. In Portugal, unpaid taxes, utility bills, and mortgages remain attached to the property, not the owner. This means that if you buy a property with outstanding debts, you may become responsible for them. To avoid this, always request a Land Registry Certificate (Certidão Permanente) and a Tax Record (Caderneta Predial) to confirm that the property is debt-free before finalizing the purchase.

For those buying older properties, structural issues can be a hidden risk. Many homes in Portugal, particularly in historic districts or rural areas, require renovations. It’s essential to conduct a thorough property inspection to check for issues like dampness, outdated plumbing, or foundation problems. Some older properties may also lack proper housing licenses (Licença de Habitação), which can complicate resale or renovation plans.

Overpricing in high-demand areas is another challenge. Lisbon, Porto, and the Algarve have seen significant price increases in recent years due to foreign investment and tourism demand. Buyers should research the market, compare prices, and negotiate to avoid overpaying. Working with a reputable local real estate agent can help ensure fair pricing.

Legal disputes over land ownership can occur, especially in rural areas where boundaries are not always clearly defined. This is particularly relevant for large plots of land or agricultural properties. A lawyer can verify land ownership records and ensure there are no legal disputes before proceeding with a purchase.

Finally, changes to rental regulations can impact property investors. Portugal has introduced stricter rules on short-term rentals, particularly in Lisbon and Porto, where some areas now require special licenses for Airbnb-style rentals. Buyers looking for investment properties should check local regulations before committing to a purchase.

While these risks exist, most can be avoided with proper due diligence, legal guidance, and market research. Taking the time to understand the process will help ensure a secure and successful property purchase in Portugal.

How to Avoid Scams and Protect Yourself When Buying Property in Portugal

Portugal has a well-regulated real estate market, but like any country, buyers should remain cautious to avoid scams and legal issues. Taking the right precautions can help ensure a safe and secure property purchase.

One of the most important steps is working with a reputable real estate agent. Unlike some countries, Portugal does not strictly regulate real estate agents, meaning anyone can call themselves an agent. To avoid fraud or misinformation, choose an agent registered with AMI (Associação de Mediadores Imobiliários), which guarantees they are licensed and legally recognized.

Before committing to a purchase, verify the legal status of the property. Some sellers attempt to sell properties with outstanding debts, unclear ownership records, or missing licenses. Always request a Land Registry Certificate (Certidão Permanente), which confirms the legal owner and any outstanding mortgages or debts attached to the property. Additionally, the Tax Record (Caderneta Predial) provides details about the property’s tax status. A real estate lawyer can assist in obtaining and reviewing these documents.

Be wary of deals that seem too good to be true. Some sellers advertise properties at extremely low prices to lure in buyers, only to later reveal hidden costs, legal complications, or necessary renovations that were not disclosed upfront. Always visit the property in person before making an offer and, if possible, hire a professional surveyor to assess its condition.

Avoid paying deposits directly to sellers. In Portugal, buyers are usually required to pay a deposit (typically 10%-30% of the purchase price) when signing the promissory contract (Contrato de Promessa de Compra e Venda). To protect yourself, ensure this payment is made through a secure escrow account or an attorney, rather than directly to the seller.

For buyers purchasing land or older properties, be cautious of disputes over land boundaries and zoning regulations. Some rural properties do not have clearly defined borders, which can lead to legal conflicts with neighbors. Also, ensure that the property has the correct housing license (Licença de Habitação), especially for older homes, as missing permits can complicate future renovations or resale.

Lastly, if you’re buying for rental investment, check the latest regulations on short-term rentals. Some municipalities, particularly in Lisbon and Porto, have restricted the issuance of new Airbnb licenses in high-tourism areas. Make sure you verify the rental laws before purchasing a property intended for short-term leasing.

Life as a Property Owner in Portugal

As with any property you own, there are ongoing costs involved with owning a home in Portugal.

Owning property in Portugal comes with many benefits, from enjoying the country’s stunning landscapes to taking advantage of its affordable cost of living and high quality of life. However, it also comes with responsibilities, including maintenance, property taxes, and potential rental management.

Property Maintenance and Utilities:
Once you purchase a home, you’ll need to budget for ongoing maintenance costs, including utilities, repairs, and condominium fees (if applicable). Utility bills for water, electricity, and internet typically range between $125 and $235 per month, depending on usage and property size. If the property is in a condominium or gated community, monthly maintenance fees can vary between $50 and $500, depending on shared services like security, pools, and landscaping.

For second-home owners or expats who don’t live in Portugal year-round, hiring a property management company can help with regular maintenance, bill payments, and security. These services cost between $55 and $250 per month, depending on the level of service required.

Paying Property Taxes:
As a property owner, you must pay IMI (Imposto Municipal sobre Imóveis), Portugal’s annual property tax. IMI rates range from 0.3% to 0.8% of the taxable property value, depending on location. Some properties, particularly newly purchased primary residences, may qualify for temporary IMI exemptions.

If you rent out your property, you’ll also be responsible for rental income taxes, which vary depending on the rental type. Long-term rental income is taxed at a flat rate of 28%, while short-term rentals may be taxed under Portugal’s Alojamento Local (AL) regime, with different rates and deductions available. Portugal has double taxation agreements with many countries, preventing foreigners from being taxed twice on the same income.

Buying  Property as a Rental Investment:
Many property owners choose to rent out their homes to generate income. Portugal’s tourism industry makes short-term rentals highly profitable in areas like Lisbon, Porto, and the Algarve. However, new regulations have restricted short-term rental licenses (Alojamento Local) in certain tourist-heavy areas, so property investors should verify local rules before purchasing.

For those interested in long-term rentals, the demand for housing is strong, particularly in urban areas and expat-friendly regions. Hiring a rental management company can help with tenant screening, maintenance, and legal compliance.

Living in Portugal as a Homeowner:
For expats who plan to live in their property full-time, Portugal offers an excellent quality of life, with warm weather, a relaxed lifestyle, and a strong healthcare system. Homeowners who meet residency requirements can benefit from access to public services, tax advantages, and even apply for permanent residency or citizenship after five years.

Whether you’re purchasing a home for personal use, as a vacation property, or for rental income, owning real estate in Portugal can be a rewarding and financially sound investment.

Buying Property in Portugal:
Our Thoughts

Buying property in Portugal is an exciting opportunity, whether you’re looking for a permanent home, a holiday retreat, or an investment property. With its affordable real estate market, strong rental demand, and high quality of life, Portugal remains one of Europe’s top destinations for foreign buyers.

The process is straightforward and foreigner-friendly, but it’s essential to understand the legal requirements, taxes, and potential risks. Working with trusted professionals, including real estate agents, lawyers, and notaries, ensures a smooth and secure transaction. Whether purchasing in Lisbon, the Algarve, or a quieter countryside region, due diligence and careful planning will help you make a successful investment.

With no restrictions on foreign ownership, a stable economy, and a welcoming lifestyle, Portugal offers long-term value for property buyers. Whether you plan to live in Portugal full-time or use your home as a rental investment, owning real estate here provides both personal and financial benefits.