Guide To Buying Real Estate in Portugal

Portugal offers some of the most affordable real estate in Europe, making it an attractive destination for investors and homebuyers alike. Many opt to purchase property along the coast, particularly along the country’s southern Algarve coast, where properties can be rented out year-round for additional income.

If you’re buying for personal use—especially as a primary residence—it’s highly recommended to visit properties in person before making a decision.

The Algarve

The Algarve, though located on the Atlantic, enjoys a Mediterranean-like climate, making it a popular choice for European vacationers and second-home buyers. With its stunning beaches, vibrant towns, and many golf courses, the region presents excellent opportunities for rental income throughout the year.

 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

Portugal’s popularity explosion over the last few years has seen more tourists and expats visit the country and the Algarve remains one of Portugal’s pricier areas, particularly in coastal hotspots like Albufeira and Vilamoura. For better value and less overdevelopment, consider quieter locations on the east coast near Tavira or the west around Lagos, which retains the character of a working town rather than a tourist-driven resort.

Sample Properties:

• Tavira: A two-bedroom apartment with balconies, a private terrace, and a sea view, located a half-mile from Tavira’s Roman bridge. Price: $153,900
• Lagos: A one-bedroom penthouse in the city center, near the marina, featuring a large terrace, a spacious kitchen, and a bright living area. Price: $178,500
• Santa Maria, Tavira: A two-bedroom apartment with sea views, a fully equipped kitchen, built-in wardrobes, and an attic. Price: $107,900

The Alentejo

For those who appreciate unspoiled beaches, vineyards, medieval castles, and charming hilltop towns, the Alentejo region is a hidden gem. Stretching from Lisbon to the Spanish border, this vast area remains largely untouched by mass tourism.

The Alentejo is known for its rich culinary traditions, including flavorful red wines and roasted suckling pig. Local markets in towns like Estremoz showcase fresh produce, cheeses, olive oil, honey, and handcrafted goods.

Charming Evora retains its traditional Portuguese atmosphere with its cobblestone streets and pretty plazas. ©Shutterstock.com/Zdenek Matyas Photography

The region’s major cities include Beja in the south and Évora in the north, a UNESCO World Heritage site known for its Roman ruins, historic aqueduct, and Moorish-influenced architecture.

Sample Properties:

• Évora: A two-bedroom home in the city’s historic center with 947 square feet, featuring a balcony window and sliding doors. Price: $147,714
• Estremoz: Two-bedroom apartments start at just $67,000.

The Silver Coast

The Silver Coast, stretching along Portugal’s central coastline, is known for its rugged cliffs, picturesque coves, and traditional fishing villages. Inland, historic sites such as abbeys and medieval towns offer a glimpse into Portugal’s past.

Seaside towns like Nazaré and São Martinho do Porto are particularly appealing. Nazaré is a lively fishing town where local fishwives still dry sardines on the beach. São Martinho, with its shell-shaped bay, features a charming promenade lined with cafés and seafood restaurants.

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

Sample Properties:

• São Martinho do Porto: A new two-bedroom villa, just minutes from the bay, with a balcony, living area, kitchen, and garage. Price: $146,500
• Nazaré: A one-bedroom apartment, three minutes from the town center and five minutes from the beach, featuring a large balcony, fireplace, storage room, and parking. Price: $103,500

Choosing Where to Buy: Climate and Lifestyle Considerations

Portugal’s climate varies depending on the region, making it essential to consider weather patterns when choosing where to buy property.

• The Algarve boasts a Mediterranean climate with over 300 sunny days per year, ideal for those who enjoy warm weather and beachside living.
• Lisbon and the Silver Coast experience mild winters and warm summers, making them great choices for those who prefer a balanced climate.
• The Alentejo has hot, dry summers and cooler winters, perfect for those who love rural charm and vineyards.
• Northern Portugal, including Porto, tends to be cooler and wetter, which might appeal to those who enjoy a more temperate climate with lush green landscapes.
• Madeira and the Azores offer a subtropical climate with year-round mild temperatures, ideal for nature lovers.

Understanding the local climate and lifestyle preferences will help you find the perfect location for your new home or investment in Portugal.

Popular Areas in Portugal for Americans to Live

Portugal has become a top destination for Americans seeking an affordable, high-quality lifestyle. Some of the most popular areas include:

• Lisbon: The vibrant capital city offers a mix of modern amenities and historic charm, with a growing expat community, excellent dining, and a well-connected public transport system.
• Porto: Known for its rich history, stunning riverfront, and world-famous Port wine, Porto provides a more affordable alternative to Lisbon while maintaining a cosmopolitan feel.
• The Algarve: With its sunny climate, stunning beaches, and golf courses, the Algarve is a favorite among retirees and digital nomads looking for a relaxed lifestyle.
• Cascais: A coastal town near Lisbon, Cascais is perfect for those who want a balance between city life and beachside tranquility, offering high-end properties and a luxurious lifestyle.
• Madeira: This stunning island in the Atlantic Ocean boasts a mild climate year-round, excellent hiking, and a lower cost of living compared to the mainland.
• The Silver Coast: Less touristy than the Algarve but just as beautiful, this region provides stunning coastal views, affordable homes, and a slower pace of life.
• Coimbra: A historic university town with an affordable cost of living, great healthcare facilities, and a welcoming atmosphere for expats.

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

Is Buying Real Estate in Portugal a Good Investment?

Yes, buying property in Portugal is generally considered a good investment. The country has a stable real estate market with strong demand from both local and international buyers. Property values in key regions like Lisbon, Porto, and the Algarve have appreciated over time, making them attractive for capital gains. Additionally, rental yields in popular tourist and expat areas can be lucrative, particularly for short-term vacation rentals.

Portugal’s Golden Visa program further enhances the investment appeal, offering residency benefits to non-EU buyers who meet the minimum investment threshold. With a relatively low cost of living, high quality of life, and strong tourism sector, Portugal remains a promising destination for real estate investors.

Can Foreigners Buy Real Estate in Portugal?

Yes, foreigners can buy real estate in Portugal without restrictions. The country has a welcoming approach to international buyers, and there are no citizenship or residency requirements to purchase property. Foreign buyers will need a fiscal number (número de contribuinte), which can be obtained from the local tax office and is necessary for transactions such as opening a bank account and paying property-related taxes.

Consider the Weather when Buying a Home in Portugal

Portugal has a diverse climate depending on the region, which is an important factor to consider when buying real estate. Here’s a breakdown of the weather in different areas:

1. The Algarve (Southern Portugal)

• Climate: Mediterranean, with over 300 sunny days per year.
• Summers: Hot and dry, with temperatures often reaching 86°F (30°C) or higher.
• Winters: Mild, averaging around 50-60°F (10-15°C).
• Best for: Beach lovers, retirees, and those looking for a warm year-round climate.

2. Lisbon & Silver Coast (Central Portugal)

• Climate: Mild Mediterranean.
• Summers: Warm and sunny, with temperatures averaging 77-86°F (25-30°C).
• Winters: Cooler and wetter but still mild, around 46-57°F (8-14°C).
• Best for: Those who want a balance between warm summers and cooler winters.

3. Porto & Northern Portugal

• Climate: Maritime with more rainfall.
• Summers: Warm but milder than the south, with temperatures around 72-80°F (22-27°C).
• Winters: Colder and wetter, with temperatures dropping to 40-50°F (5-10°C).
• Best for: Those who prefer a green, lush environment with a more temperate climate.

4. Alentejo (Interior Portugal)

• Climate: Hot and dry in summer, cool in winter.
• Summers: Can be extremely hot, often exceeding 100°F (38°C).
• Winters: Can drop to 32-41°F (0-5°C) at night but remains mild during the day.
• Best for: Buyers looking for rural property, vineyards, and a quiet lifestyle.

5. Madeira & Azores (Atlantic Islands)

• Climate: Subtropical with mild temperatures year-round.
• Summers: Average around 75-82°F (24-28°C).
• Winters: Rarely drop below 60°F (16°C).
• Best for: Nature lovers, those wanting island living with a moderate climate.

The island of Madeira is located in the North Atlantic and has a subtropical climate making it lush and green.
©Shutterstock.com/prosign

Weather Considerations When Buying Property

• Rental Income: Sunny locations like the Algarve are great for holiday rentals.
• Heating Needs: Northern Portugal may require heating in winter, while the south generally does not.
• Lifestyle Fit: If you enjoy a temperate climate with greenery, Porto or the Silver Coast may be ideal. If you prefer hot, dry weather, the Algarve or Alentejo might be better.

Legally Buying Property in Portugal: What You Need to Know

Buying property in Portugal as an American (or any foreign national) is relatively straightforward, but ensuring the process is legally sound is crucial. Here are the key steps and the types of legal professionals you may need:

1. The Legal Process of Buying Property

Obtain a Portuguese Fiscal Number (NIF)
Before purchasing property, you must get a Número de Identificação Fiscal (NIF), which is required for all financial transactions in Portugal. This can be obtained at the Portuguese tax office (Finanças) or with the help of a legal representative.

Preliminary Sales Agreement (Contrato de Promessa de Compra e Venda)
Once you find a property, a preliminary contract is typically signed between the buyer and seller, outlining terms of the sale, price, and conditions. A 10% to 30% deposit is usually required at this stage.

Due Diligence Checks
Your solicitor will verify that the property has clear title, no outstanding debts, and the necessary planning permissions. This is essential to avoid legal complications.

Final Deed of Sale (Escritura Pública de Compra e Venda)
The official transfer of ownership occurs when the final deed is signed before a Portuguese notary. At this stage, the remaining payment, taxes, and fees are settled, and the property is officially registered in your name.

2. Types of Legal Professionals You May Need

Real Estate Lawyer (Advogado Imobiliário)
A specialized lawyer ensures the property is free from legal issues, checks ownership history, and drafts contracts. Their role is critical in avoiding fraud and handling negotiations.

Notary (Notário)
A public notary is required by law to authenticate the sale. They verify the legality of the transaction and ensure both parties understand the contract. However, they do not advocate for the buyer or seller, so independent legal counsel is still needed.

Solicitor or Conveyancer
A conveyancing solicitor handles the paperwork, liaises with the tax office, registers the property with the Land Registry (Registo Predial), and ensures compliance with local laws.

Tax Consultant or Accountant
Since property transactions involve transfer taxes, capital gains taxes, and annual property taxes (IMI), a tax expert can help you understand your obligations, especially if you plan to rent out the property. 

Mortgage Broker (if financing)
If you’re taking out a loan in Portugal, a mortgage broker helps secure financing from a Portuguese bank and ensures you meet lending criteria.

3. Additional Considerations for American Buyers

Inheritance Laws – Portugal follows forced heirship laws, meaning inheritance is automatically divided among close family unless a will is structured accordingly. Legal advice is recommended for estate planning.

Buying in a Condominium or Resort – Some properties have monthly fees for maintenance and management, so check for additional costs before committing.