Authored by the expert who managed and guided the team behind the Portugal Property Pack
Everything you need to know before buying real estate is included in our Portugal Property Pack
Are you considering investing in Portugal’s real estate market? What are the legal steps, tax implications, and cultural differences you need to understand before taking the plunge? What challenges do foreign investors typically face, and how can you overcome them?
These are the questions we hear most often from foreign investors because we’re actively connected to this market. We’ve spent time working with local agents, developers, and investors, so we know what works—and what doesn’t. That’s why we’ve written this article: to provide a clear guide that answers the questions we get asked daily.
Our goal is to help you, as a foreigner, to navigate the property buying process with confidence. If you think there’s something we missed or want more details, let us know (please do!). Your input helps us refine and improve our advice for everyone.
How this content was created 🔎📝
Fact-checked and reviewed by our local expert
João Morais 🇵🇹
Founder | Real Estate Advisor, at Wilderness Investments
1) Consider Portugal’s Golden Visa for residency, requiring a €500,000 property investment, but note lower thresholds in low-density areas
Portugal's Golden Visa program is a popular way for non-EU investors to gain residency by investing in the country.
By 2023, 12,718 Golden Visas had been issued to main applicants, with many investors hailing from China, Brazil, and the USA. This program has been a game-changer for Portugal's economy, drawing in over €7.3 billion in investments since it started in 2012. A significant chunk of this, €5.8 billion, went into real estate, which has been a major driver of the property market.
Property prices in Portugal have surged by 42% from 2012 to 2023, outpacing the EU average. This boom is largely thanks to the Golden Visa program, which has made the real estate market more dynamic and attractive to international buyers. The program's appeal isn't just about the numbers; it's also about the lifestyle and opportunities Portugal offers.
One of the program's perks is the chance to invest in low-density areas at a lower threshold, which has been a win-win for investors and regional development. This has led to a noticeable boost in these areas, making them more vibrant and economically active. Even after the real estate option was discontinued in October 2023, the program's flexibility with other investment options keeps it appealing.
Investors can still explore business investments and investment funds, which continue to draw interest. This adaptability ensures that the Golden Visa remains a viable option for those looking to make Portugal their home. The program's impact is evident in the thriving property market and the economic growth seen across the country.
Sources: Portugal Homes, Savory and Partners, Immigrant Invest, Get Golden Visa, IZA
2) Consider rural properties with agricultural land for extra income if managed well
You might be surprised to learn that some rural properties come with agricultural land, which can be an additional source of income if managed properly.
In Portugal, many farms are family-run, covering about 3.6 million hectares of agricultural land with 259,000 active farms. This means that when you buy a rural property, there's a good chance it includes some farmland.
The size of these farms can vary, but if you're looking for larger plots, head to the center and south of Portugal. Here, you'll find holdings of 200 hectares or more, perfect for serious farming. Over the last two decades, investors have snapped up around 100,000 hectares, especially in places like Alqueva, known for its large orchards and diverse crops.
When it comes to making money, certain crops in Portugal are quite profitable. For example, leased olive orchards can offer cash yields of 7% to 12%. If you're willing to take on more risk, crops like avocados or almonds could bring even higher returns.
So, if you're considering a rural property, think about the potential of agricultural land. It could be more than just a place to live; it might be a way to earn extra income. The key is to manage it well and choose the right crops.
Sources: Savills, Food4Sustainability, European Commission
One of our partners sent us this video where we see a property with agricultural potential, showcasing olive groves and fruit trees as an example of additional income opportunities.
3) Focus on coastal or tourist hotspot properties in Portugal, as they often appreciate more due to tourism trends
The Portuguese real estate market is heavily influenced by tourism trends.
In 2023 and 2024, places like the Algarve saw property prices soar, thanks to high tourist demand. Known for its stunning beaches and sunny climate, the Algarve is a hotspot for vacation rentals, offering consistent income opportunities. If you're considering buying property here, expect a vibrant market driven by holidaymakers.
Lisbon and Porto, the major tourist magnets, also experienced a rise in property prices. In May 2024, the Portuguese National Statistics Office noted that over 3 million guests stayed in tourist accommodations in these cities, with 7.7 million stays. This influx of visitors has a direct impact on real estate, pushing property values higher.
Short-term rental properties are in high demand in these bustling areas. The Lisbon Metropolitan Area offers rental yields of 6.7%, while Porto and the Algarve provide yields of 6% and 5.6%, respectively. These numbers show the profitability of investing in real estate in tourist-heavy regions.
Sources: Vasco Invest, Portugal Buyers Agent, Home in Portugal
4) Expect seasonal fluctuations in Portugal’s property market, with more transactions in spring and summer affecting prices and availability
The Portuguese property market is seasonal, with more transactions in spring and summer.
During these warmer months, there's a surge in interest from international investors, especially in hotspots like Lisbon, Comporta, and Quinta do Lago. This influx is not just a coincidence; it's a pattern observed by real estate agencies such as Savills Portugal, which consistently report higher demand and sales activity during this time.
In fact, the Portugal Residential House Price Index shows that prices tend to rise more sharply in spring and summer. This is particularly true in the Lisbon metropolitan area and the Algarve, where the median sales values have seen significant jumps. The allure of seasonal tourism and the pleasant weather are key factors driving this trend.
For those considering buying property in Portugal, it's worth noting that these seasonal patterns can affect both pricing and availability. The market becomes more competitive, and properties may sell faster, so timing your purchase could be crucial.
Insider tip: if you're looking to buy in these popular areas, it might be wise to start your search early in the year. This way, you can get ahead of the rush and potentially secure a better deal before the market heats up.
Keep in mind that while the spring and summer months are bustling, the quieter months might offer opportunities for negotiation and less competition. Understanding these dynamics can give you an edge in the Portuguese property market.
Sources: CaixaBank Research, Savills Portugal, Engel & Völkers
5) Consider Portugal for stable property investments, as its market is less volatile than other European countries
The Portuguese property market is known for its steady increase in property prices over the years.
In April 2024, the median price of dwellings rose by 7.04%, continuing a trend of strong annual increases since 2017. This consistent growth pattern suggests a stable market environment, making it appealing for potential buyers looking for a safe investment.
By June 2024, the Real Residential Property Price Index showed a growth of 4.993%. This indicates a stable growth trend, with fewer fluctuations compared to the highs and lows seen in previous years. Such stability is a key factor in making the market less volatile, which is reassuring for those considering purchasing property in Portugal.
Reports from real estate agencies, like JLL's Market Pulse, highlight that the Portuguese real estate market has maintained steady and stable trends, similar to those observed in Q1 2023. This consistency in market performance further underscores the market's stability, providing confidence to potential investors.
For those interested in buying property in Portugal, this stability means less risk of sudden market changes, which is a significant advantage compared to other European countries. The market's resilience is a testament to its robust economic foundations and attractive investment opportunities.
Sources: Global Property Guide, CEIC Data, The Portugal News
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6) Consider Lisbon’s historic neighborhoods for short-term rentals, as they attract tourists and offer high returns
Investing in Lisbon's historic neighborhoods is a smart way to maximize profit through short-term rentals.
These charming areas are a hit with tourists, leading to a high demand for accommodations. In recent years, Lisbon has welcomed a surge of international visitors, with short-term rental occupancy rates soaring to an impressive 85%.
Property values in these neighborhoods are climbing. In 2025, prices are expected to rise by 3% to 7% compared to 2024, especially in hotspots like Bairro Alto, Chiado, and Alfama. The limited housing stock and new developments in these areas are driving this trend, making it a prime time to invest.
Lisbon also offers competitive rental yields. In neighborhoods like Graça, yields hover around 3.8%, outpacing many other European cities. This makes Lisbon a magnet for property investors seeking solid returns.
The city's vibrant mix of cultural and historical attractions adds to its allure, drawing tourists who love staying in these picturesque areas. This blend of old-world charm and modern amenities keeps the rental market thriving.
Sources: Airbtics, GuestReady, Global Traveler USA, Propr.pt
7) Focus on energy-efficient properties in Portugal, as demand is rising with the country’s emphasis on sustainability
In Portugal, energy-efficient homes are becoming increasingly popular as people look for sustainable living options.
Thanks to the Portuguese government's efforts, homebuyers can now enjoy incentives like tax breaks and grants when they invest in eco-friendly technologies such as solar panels. This makes choosing a green home not just an ethical choice but a smart financial one too.
Many people are now prioritizing properties with features like advanced insulation and efficient heating systems, reflecting a broader awareness of climate change. This shift is not just about saving the planet; it's also about saving money on energy bills.
The media in Portugal is buzzing about the benefits of these energy-efficient homes. Reports highlight how they not only help the environment but also boost property values, making them a wise investment.
Consumer surveys reveal that eco-friendly features are high on the list for potential buyers. This trend is part of a larger global movement towards sustainability, but it's particularly strong in Portugal, where the government is actively supporting these initiatives.
So, if you're considering buying a property in Portugal, keep an eye out for homes with energy-efficient features. They are not just a trend; they are becoming a standard, offering both environmental and financial benefits.
Sources: Portugal Portfolio, Supercasa, BEUC
8) Consider properties with strong internet and workspaces in Portugal, as it’s a growing hub for digital nomads
Portugal is quickly becoming a favorite spot for digital nomads from around the world.
In 2023, 8% of the global digital nomad population chose to live in Portugal, making it the second most popular country for these remote workers. This trend is growing, as more people discover the benefits of working from this beautiful and culturally rich country.
With the rise of digital nomadism, the demand for coworking spaces in Portugal is booming, especially in vibrant cities like Porto. Both local and international brands are expanding their coworking facilities, with Portuguese companies like SITIO.pt and LACS leading the charge by investing in new locations and renovations.
Portugal's government is also stepping up by enhancing internet infrastructure, aiming for Gigabit network coverage in every household by 2030. This is a big draw for digital nomads who need reliable, high-speed internet to work efficiently. The increase in short-term rental platforms catering to remote workers further underscores the demand for flexible living spaces with strong connectivity.
Investing in properties with excellent internet and workspace facilities in Portugal could be a smart move, as the country is becoming a top choice for remote workers. The combination of a supportive government, expanding coworking options, and a growing community of digital nomads makes Portugal an attractive destination for those looking to invest in real estate.
Sources: Home in Portugal, Coworking Europe, Digital Watch, Connect PLS
In this video, we can see that Portugal is attracting remote workers, particularly in areas like Lisbon, Porto, and the Algarve, highlighting the importance of co-working spaces and strong internet connectivity.
9) Consider properties with sea views or near beaches, as they often have higher prices and rental rates, making them a worthwhile investment
In Portugal, coastal properties are a hot commodity due to their higher prices and rental potential.
Take the Algarve, for instance, where luxury villas can fetch between €1,000,000 and €3,000,000. This reflects their premium value, especially in sought-after spots like Vale do Lobo. The allure of the sea view or being close to the beach often justifies these prices, making them a solid investment.
When it comes to rental income, coastal properties shine. In regions like the Algarve, rental yields can be up to twice as high as those of inland properties. This means that investors can enjoy a lucrative return, thanks to the higher rental rates that sea views command.
Looking at the numbers, house prices in Portugal rose by 5.4% in 2023. Coastal areas saw even more impressive growth, underscoring the trend of higher appreciation rates for properties near the sea. This makes them a smart choice for long-term investment.
Insider tip: properties with sea views or close to the beach are not just about the view; they often come with a lifestyle that attracts both buyers and renters. This lifestyle factor can significantly boost demand and, consequently, property values.
So, if you're considering investing in Portugal, remember that coastal properties offer both immediate and long-term benefits. They are not just about the scenic beauty but also about financial gains.
Sources: Immigrant Invest, Rent Bottom Line, Global Property Guide
10) Don’t underestimate location importance, as properties in remote areas may have difficulty attracting tenants or buyers
In recent years, especially in 2023 and 2024, the real estate market has shown that location is key.
In cities like Lisbon and Porto, properties are offering impressive rental yields. For example, in Lisbon's trendy neighborhoods such as Alfama and Bairro Alto, you can expect yields of around 5.5%. Meanwhile, Porto's Cedofeita and Foz do Douro are even more lucrative, with yields reaching about 6.5%. These areas are not just popular for their charm but also for their strategic locations, making them hot spots for investors.
On the flip side, properties in less accessible areas often face challenges. They tend to have higher vacancy rates because of lower demand. This is partly due to the shrinking housing stock in Portugal, where 10 houses were sold for every new one built between 2018 and 2022. This means that remote properties might sit on the market longer, affecting your potential returns.
Transportation improvements have also played a big role in boosting property values. Expansions in metro lines and airport upgrades have made well-connected areas more appealing. These developments enhance global connectivity, making properties in these locations more attractive to both buyers and tenants. As a result, properties in major cities like Lisbon and Porto, which offer more job opportunities and better access to amenities, continue to see higher demand and appreciation rates.
In major cities like Lisbon and Porto, the demand remains high due to better job opportunities and access to amenities. This demand translates into higher appreciation rates, making these cities a smart choice for property investment. The combination of location, connectivity, and amenities makes these urban areas a magnet for both buyers and tenants.
So, if you're considering buying property in Portugal, keep in mind that location is crucial. Properties in prime areas not only offer better rental yields but also promise higher appreciation rates. This makes them a more secure investment compared to those in less accessible regions.
Sources: Property Market Index, Housenix, Spot Blue
11) Be patient with property transactions in Portugal, as the legal system can be slow
Buying property in Portugal requires patience due to the slow legal system.
In 2023, it typically took 6-9 months to complete a property transaction in Portugal. This includes steps like checking the property's legal status, signing contracts, and getting the deed. The process can feel long, but understanding each step helps manage expectations.
Delays often happen because of the high volume of cases and the complex legal procedures involved. By 2024, experts predicted that transactions might stretch to 12 months or more due to ongoing bureaucratic issues. Knowing this can help you plan better and avoid frustration.
The Portuguese courts had a backlog of over 1.5 million cases in 2023, which added to the delays. While there are efforts to reduce this backlog, it will likely take years to clear, affecting how quickly property deals can be finalized.
Despite these challenges, Portugal remains an attractive place to buy property, with its beautiful landscapes and vibrant culture. Being aware of the legal system's pace can give you an edge, allowing you to navigate the process more smoothly.
Sources: APPII Survey, Portuguese Ministry of Justice, European Comparison
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12) Factor in Portugal's IMT property transfer tax, which varies by property value and location, when budgeting for your purchase
When buying property in Portugal, you need to consider the property transfer tax called IMT.
This tax varies based on the property's value and location. For example, if your property is valued up to €97,064, you're in luck because you won't pay any IMT. But as the value climbs, so does the tax, reaching up to 7.5% for properties over €1,050,400.
Location is another key factor. Urban properties have progressive rates from 0% to 8%, while rural properties often have a fixed rate, like 6.5% for commercial plots. So, where you buy can really change how much tax you owe.
First-time homebuyers under 35 can catch a break with exemptions, which is a nice perk for younger buyers. But here's a twist: the IMT is calculated on the higher value between the deed's indicated value and the rateable value. So, even if you snag a deal, the tax might still be based on a higher value.
Real estate agencies and financial advisors often stress the importance of factoring in IMT when planning your budget. This tax can significantly affect your overall cost, so it's crucial to keep it in mind.
Sources: Portugal Buyers Agent, IMIN Portugal, Portugal Homes, Portugal Portfolio, Get NIF Portugal
From this video, we realize that the IMT property transfer tax varies by location and property value, which is crucial knowledge for budgeting property transactions in Portugal.
13) Take advantage of Portugal’s tax incentives for renovating older properties to significantly cut costs
In Portugal, the government offers tax incentives for property renovations, which can help you save money if you're investing in older homes.
One of the key benefits is the Imposto Municipal sobre Imóveis (IMI) tax reduction, which gives you a three-year exemption if your property is in a designated urban rehabilitation area. This can be extended for another five years, especially useful for homes over 30 years old or in areas set for revitalization. Imagine buying a charming old house in Lisbon and getting a tax break just for fixing it up!
There's also the Programa Reabilitar para Arrendar (RPA), which offers favorable loans for renovations. This program makes it easier for both individuals and companies to finance their projects. So, if you're thinking about turning a rundown building into a rental property, this could be a great option.
Another incentive is the Regime Fiscal de Apoio ao Investimento (RFAI)
These incentives are part of Portugal's strategy to encourage property renovations, especially in urban areas that need a little love. By taking advantage of these programs, you can not only save money but also contribute to the revitalization of beautiful Portuguese cities.
So, if you're considering buying property in Portugal, these tax incentives could make your investment much more attractive. Whether you're looking to renovate a quaint cottage in the countryside or a historic building in the city, these programs offer substantial financial benefits.
Sources: Portugal Buyers Agent, Portal da Habitação, PwC Tax Summaries
14) Leverage Portugal’s less competitive market for better price negotiations compared to other European markets
The Portuguese property market is less competitive than other European markets, offering more room for negotiation.
In 2023, the number of housing transactions in Portugal dropped by 18.7% compared to the previous year. This means fewer buyers are competing for properties, giving you a better chance to negotiate prices. The market's slower pace is a unique opportunity for potential buyers.
Property prices in Portugal are rising, but at a slower rate than in other European countries. In 2023, house prices increased by 5.4%, which is less than the 7.8% increase seen in the second quarter of 2024. This slower growth means prices aren't skyrocketing, allowing for more negotiation opportunities.
Luxury properties in Portugal are taking longer to sell, with an average of about 5 months on the market. This extended time suggests sellers aren't in a rush, giving buyers more leverage to negotiate better deals. It's a buyer's market, especially for those interested in high-end real estate.
Understanding these dynamics can give you an edge in the Portuguese property market. With less competition and slower price growth, you have more room to negotiate and potentially secure a better deal. The market's current state is favorable for buyers looking to invest in Portugal.
Sources: Global Property Guide, Sardo Real Estate, Benoit Properties
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Portugal versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
15) Consider investing in long-term rentals in the Algarve, as it’s a popular destination for retirees
The Algarve is a top choice for retirees, especially from the UK and USA.
With Portugal's largest community of foreign retirees, the Algarve is lively and welcoming for those enjoying their golden years. This influx has led to a strong demand for rental properties, not just for vacations but for long-term stays too. The region's charm lies in its beautiful beaches and quaint towns, making it an ideal retirement spot.
Real estate in the Algarve is booming, with property prices on the rise. This growth signals a healthy demand, presenting a great opportunity for long-term rental investments. The Algarve's appeal is further enhanced by its high quality of life and excellent healthcare, crucial for retirees choosing a new home.
Investing in the Algarve means tapping into a market that's not only popular but also lucrative. The region's amenities and lifestyle make it a magnet for retirees, ensuring a steady demand for rental properties. This trend is supported by the area's reputation as a retirement hotspot, offering both comfort and community.
For those considering property investment, the Algarve offers a unique blend of natural beauty and modern conveniences. Its growing popularity among retirees guarantees a consistent demand for long-term rentals, making it a wise choice for investors. The region's vibrant community and stunning landscapes are just the icing on the cake.
Sources: Digital Emigre, EUROPA, Ocean Horizon
Our team found this video detailing rental costs in the Algarve, showing how long-term rentals in this region appeal to retirees and offer affordable options during winter months.
16) Build a local network in Portugal to access off-market property deals, as locals often buy through personal connections
In Portugal, private property sales have become increasingly common, especially in 2023 and 2024.
Without a Multiple Listing Service (MLS), many homes are sold without public listings, often at inflated prices. Locals know that personal connections are key to finding these hidden gems. By building a network, you can access off-market deals that others might miss.
Local estate agents are invaluable because they often know about properties not listed online. In Portugal, not all new listings make it to websites quickly, so having an agent on your side can open doors to exclusive opportunities.
Expatriates who have successfully bought homes here often stress the importance of local contacts. A trusted lawyer or settlement agent can be a game-changer, especially if you're not fluent in Portuguese. They can handle the paperwork and even complete certain procedures for you, making the process much smoother.
In community discussions, it's noted that properties are often listed at inflated prices with little urgency to sell. This is where having insider knowledge and local contacts can really pay off, allowing you to navigate the market more effectively.
Remember, locals often prefer to buy property through personal connections, so building a network can provide access to off-market deals.
Sources: Nomad Gate Community Discussion, Portugal Property Guide, Property Guides
17) In Portugal, buyers usually pay the real estate agent's commission, unlike in many other countries
In Portugal, the buyer usually pays the real estate agent's commission, which might surprise you if you're used to different practices elsewhere.
Take the United States, for instance, where the seller typically covers the commission, usually around 5-6% of the sale price. This fee is then split between the listing agent and the buyer's agent. So, when you hear that in Portugal, the buyer is responsible for this cost, it might catch you off guard.
International buyers often express surprise at this practice. They might say something like, "I was surprised to find out that in Portugal, the buyer pays the real estate agent's commission. It was a significant expense, but the process was smooth and well-managed by our agent." This highlights how different the experience can be compared to what they might expect elsewhere.
In Portugal, the buyer's responsibility for the commission can be a significant expense, but many find the process smooth and well-managed by their agents. This practice is a stark contrast to what international buyers might expect, especially those familiar with the U.S. system.
Despite the initial surprise, many buyers appreciate the transparency and efficiency of the Portuguese real estate process. The commission covers a range of services, ensuring that buyers receive comprehensive support throughout their property purchase journey.
Sources: Portugal Homes, Global Citizen Solutions, Real Estate Bricks
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.