Buying Property in Portugal
In today’s increasingly globalised world, more and more people are looking to invest in property outside their home country. Portugal is one of the most beautiful and picturesque countries in Europe, with its stunning coastal towns and pristine rural landscapes. It’s no wonder why Portugal is an excellent option for those seeking an affordable yet beautiful place to buy a vacation home or retirement property.
In this post, we’ll take a closer look at why buying property in Portugal is such a popular option for property buyers. We’ll also explore the commercial and residential properties you can invest in through the Portugal Golden Visa Programme and provide details on the process of acquiring property in Portugal.
So, if you're thinking about buying real estate in Portugal, read on for more information.
Why Buy Property in Portugal?
There are many reasons why buying property in Portugal is a wise investment. The country offers an excellent quality of life, stunning scenery, and a relaxed lifestyle.
Lisbon, the capital of Portugal, is one of the oldest cities in Western Europe. The city is famous for its scenic location, rich culture, and history. Lisbon is also a significant financial centre, with many banks and businesses in the city.
Portugal is a country with a long coastline, so there are many coastal towns to explore. Each town has its unique character; visitors can find everything from quaint fishing villages to bustling resort towns.
The Algarve region, in particular, is renowned for its sandy beaches, clear waters, and Mediterranean atmosphere.
In addition to the coastal towns, Portugal has several inland towns and cities worth visiting. The interior regions are especially varied, ranging from the mountainous north to the rolling plains of the south.
Can Foreigners Buy Property in Portugal?
Portugal’s real estate market has seen significant growth in recent years as more people are looking to purchase property in this sunny European nation.
So, can foreigners buy property in Portugal? The answer is YES! The country has no restrictions on foreigners buying properties.
Thanks to the Portugal Golden Visa Programme, buying property in Portugal can also provide a path to citizenship, which entails even more advantages for successful applicants.
Commercial and Residential Properties in Portugal
Portugal has had a minimum of €4 billion flowing into properties since the launch of the resident permit scheme in 2012. To qualify for the Golden Visa application, applicants can invest in commercial or residential real estate in Portugal.
As of January 2022, the Portuguese government limited the areas wherein Portugal Golden Visa investors can purchase residential real estate. Residential real estate can now only be bought within the interior regions.
Residential areas in Lisbon, Porto, and coastal regions cannot be purchased to apply for the Portugal Golden Visa Programme. This limitation does not apply, however, to commercial properties. Investments in commercial properties will still qualify in any part of Portugal.
1. Qualifying value: €500,000
Foreign investors can buy residential property (which may be rented out) in inland territories of the Autonomous Regions of the Azores and Madeira (except Porto, Lisbon, and coastal areas). The geographical limitations on residential real estate investments do not apply to commercial real estate investments.
The minimum investment amount is €500,000 anywhere in the country.
The rules encourage individuals to consider properties in potentially high-growth regions, such as the Douro Valley, Aljezur and Peneda Gerês. The amount has been reduced to €400,000 for properties in a low-population area.
2. Qualifying Value: €350,000
This option requires a property at least thirty (30) years old and needs renovation and refurbishment. The property must be located in designated urban rehabilitation areas.
The total sum of the rehabilitation work and property value must be at least €350,000. Investors must deposit the difference between the property purchase price and the minimum rehabilitation investment.
3. Qualifying value: €280,000
The property in this option must be for renovation or refurbishment in any of Portugal’s designated low-density areas. Low-density areas are those with less than 100 inhabitants per square kilometre.
The GDP per person is less than 75% of the national average. You may opt to buy a property constructed at least 30 years ago and requires renovation or refurbishment. The total sum of the rehabilitation work and property value must add up to €280,000.
Popular Locations to Buy Property in Portugal
Since its launch, the success of the Golden Visa programme has led to a steady appreciation in property prices in popular locations like Lisbon and Porto. House prices in Portugal rose by 4.6% in 2017, 6.1% in 2018, 8.3% in 2019, and 13.8% in 2021.
The following are just some of the popular locations in Portugal for real estate investment or purchase.
- Lisbon (for commercial properties only)
- Porto (for commercial properties only)
- The Azores
To promote investment in low-density interior regions, investors are advised to buy properties outside popular areas, such as the Algarve, Setubal and Silver Coast.
Buying a property in Portugal’s low-density areas has its benefits. Properties in these areas are affordable, providing you with an option to purchase multiple properties and maximise returns.
Cities in the interiors of the country are popular with students, and as the population grows, so does the opportunity to serve the growing needs of these cities.
Most low-density areas are located in Portugal’s interior regions, except for the coastal areas south of the River Lima and North of the River Sado. Madeira and Azores are also excluded. The most popular low-density regions include:
- Douro Valley
Property Prices in Portugal
Property prices vary widely depending on the location, property type, and other factors. Generally, prices in Portugal’s major cities like Lisbon are higher than in other areas. But you can still find good deals in smaller towns and villages.
Below is an overview of the average price per m2 of residential properties in major areas of Portugal. Please note that residential properties in Lisbon, Porto, and coastal regions can no longer qualify for the Portugal Golden Visa Programme application.
|Location||Average Price per m2 (As of August 2022)|
|Lisbon Metropolitan Area||€3,469/m2|
|Autonomous Region of Madeira||€2,244/m2|
|Autonomous Region of the Azores||€1,234/m2|
How to Buy Property in Portugal
Completion of accounts, contracts, and payments is required before investing. Here is the step-by-step process of buying a property in Portugal:
- Open a local bank account and obtain a Personal Fiscal Number from the local tax office.
- Browse online property portals to shortlist desired property or use a local estate agent.
- Engage with an independent solicitor to check contracts and ensure the property is surveyed.
- Sign the Contrato de Promessa de Compra e Venda (Sale Contract) after agreeing on the sale price and physical check.
- Make a down payment or deposit.
- Pay for the property transfer tax or Imposto Municipal sobre a Transmissão Onerosa de Imóveis (IMT).
- Sign the Escritura Publica de Compra e Venda (Deed of Purchase and Sale).
- Get the property registered in your name.
Beyond the IMT, property buyers also have to pay stamp duty at a flat rate of 0.8% of the home’s value. The notary and land registry fees could amount to around 0.2% to 1.2% of the property cost.
Acquiring the Portugal Golden Visa
Buying property in Portugal allows you to acquire a Portugal residence permit, as long as you stay in the country for a minimum of 14 days each two years. That means you can buy a property in Portugal and get residency.
Moreover, you may apply for citizenship and an EU passport five years after obtaining residency. A passport entitles you to stay in Portugal indefinitely, live, work, and study anywhere in the European Union, Liechtenstein, Norway, Iceland (EEA), and Switzerland. You may also travel visa-free to 187 countries.
Complicated? Let Endevio Assist You
Portugal is the place to be if you’re looking for a property investment that will give you great returns and plenty of benefits. If the process of purchasing real property in Portugal and acquiring Portugal residency through the Portugal Golden Visa Programme is complicated and you seek potentially more straightforward options, Endevio is ready to assist you.
We’ll be happy to provide all the information you need and help make your dream of owning a piece of Portuguese paradise a reality.
Contact us, and we will walk you through your options.