Buying Property in Portugal: Your Definitive Guide

Looking for a stunning property in one of Europe’s most captivating countries? The Portuguese real estate market has become highly sought-after in recent years, with expats from all walks of life cottoning on and relocating to this sun-drenched gem in the Iberian Peninsula.

From retirees looking to spend their golden years in the Algarve to families relocating to Lisbon, if you are considering buying property in Portugal, then you are on to a winner.

This article is your go-to guide to snapping up a property in the country. From answering questions such as “Can foreigners buy property in Portugal?” to delving into the key areas to consider, we have you covered.

We will also provide you with key information on the types of properties you will find here, in addition to practical information such as financing your property and property taxes to be aware of.

Why should you buy property in Portugal?

Portugal’s real estate market has experienced significant steady growth and has become an attractive and profitable investment option in recent years. Factors such as a stable economy, affordable prices, and a high quality of life have contributed to its appeal among both domestic and foreign buyers. 

Key reasons to buy property in Portugal 

Some of the key advantages of buying property in Portugal include:  

• An investment in a dynamic real estate market with a high return on investment potential  
• Low cost of living compared with other countries in Western Europe  
• Sublime climate with incredible summers and mild winters  
• Top-quality education and healthcare services  
• Seventh safest country in the world, according to the 2024 Global Peace Index 
• The Portuguese, in general, speak excellent English  
• Incredible gastronomy  
• Cultural and recreational activities
• Festivals and events throughout the year 
• No restrictions on foreign property ownership

Can foreigners purchase real estate in Portugal?  

The first question that you’ll probably want to know is whether it is easy to purchase real estate in Portugal as a foreigner. And the simple answer is yes, foreigners can buy property in Lisbon. There are no restrictions on foreigners buying property in the county, and non-Portuguese nationals will have the same rights as locals when it comes to buying and owning property, including land.

One important consideration is that, if you are looking to move to Portugal, you will need to secure residence in the country. For example, if you are a UK citizen, you will only be able to stay in the country for three months without securing a residency permit.  

Where to Buy Property in Portugal

Cobblestone streets wind through centuries-old neighborhoods, sun-kissed beaches stretch as far as the eye can see, and a cultural tapestry is woven with a long history, from the Moors to the Romans. Yes, Portugal has lots to offer buyers.  

In this section, we’ll run over some of the best places to buy Portuguese property in the country, from the bright lights of Lisbon to the sandy beaches of the Algarve. Note that this list is by no means comprehensive, as you’ll find stunning locations up and down the country. Desirable areas not mentioned here include Aveiro, Coimbra, and Viseu. 

Lisbon  

Aside perhaps from the Algarve, Lisbon is the most well-known part of Portugal. This mesmerizing capital city effortlessly embraces the past and the present, enchanting all who grace its streets. From the cobbled streets of Alfama to the dynamic neighborhood of Baixa, with boutique shopping and buzzing nightlife, you’ll find something for any buyer. Families should consider Estrela, with its wide open parks ideal for spending time outdoors. You also have Parque das Naçōes, with its futuristic cable cars, top-quality restaurants spilling out on the street, and fabulous views of the River Tejo.  

You can consult our article, How to Buy a House in Lisbon, for more information.

Cascais  

Located just a short drive from Lisbon, Cascais is a charming coastal town that has become synonymous with luxury living.

Its beautiful beaches, excellent restaurants, and thriving cultural scene make it a favorite among affluent residents and tourists alike.

Cascais also boasts top-notch golf courses, marinas, and a relaxed ambiance, making it an ideal place for those seeking a more refined and laid-back lifestyle.

You can find out more in our article, Buying Property in Cascais.  

Algarve  

Does the Algarve need any introduction? This sublime part of southern Portugal is renowned for its stunning coastline, golden beaches, and excellent climate. It has become somewhat of a mecca for tourists, expats, and retirees seeking a sunny, beachside lifestyle. Particularly in peak tourism season, the coastal towns in the region come alive with internationals from all over the world seeking a slice of the Algarve. Besides its natural beauty, the Algarve offers world-class golf resorts, charming fishing villages, and a lively social scene. Areas like Faro, Albufeira, and Lagos are particularly popular among property buyers. If you are thinking about moving to the Algarve, it shouldn’t take you long to settle in. There is an array of activities to get involved in, such as water sports, yoga classes, and cooking classes, where you’ll be able to get to know fellow expats.

For prospective buyers considering the Algarve, our article, Buying Property in Algarve, Portugal, has you covered, running over the intricacies of how to buy in Southern Portugal.

Porto  

The second biggest city of Portugal, Porto, has evolved quite drastically over the years, now competing with Lisbon as the country’s most talked-about city. Yes, Porto can certainly hold its own, with its charming narrow streets, fabulous riverside restaurants and cafes, and boutique stores. If you are looking for beautiful beaches, you’ll find many close to Porto and many activities to get involved in, such as surfing, yoga, or even cooking classes. Both local and foreign investors will find long-term rentals to be an attractive option, with many students, remote workers, and young professionals creating demand for this type of accommodation in the city, leading to high rental yields. 

If you are considering buying Portuguese property in this charming city, our article, Buying Property in Porto, Portugal, will provide you with everything you need to know.

Alentejo  

For those looking to escape the hustle and bustle of city life, the Alentejo region in southern Portugal offers a tranquil and idyllic setting. Known for its rolling plains, vineyards, olive groves, and medieval hilltop villages, the Alentejo provides a slower pace of life and a strong connection to nature. It’s a popular choice for those seeking rural retreats and a more traditional Portuguese lifestyle. It would be the perfect part of the country to find a spacious countryside house at a very reasonable price. The Alentejo is often favored by locals as a top vacation destination, given the beauty of the countryside and the delicious food on offer.   

The Silver Coast  

The Silver Coast in Portugal is a captivating region renowned for its pristine beaches, historic towns, and vibrant culture.

Situated on the Western Coast between Lisbon and Porto, the Silver Coast is characterized by rugged cliffs, golden sands, and charming fishing villages.

If you are looking for a more authentic part of the country, to truly enjoy the local life and embrace staggeringly beautiful landscapes, then the Silver Coast could be the place for you.

Madiera and the Azores

The autonomous islands of Madiera and the Azores are both ideal locations for those looking for tranquil island living. Madeira, off the coast of northern Africa, is the more built-up of the two, with the cosmopolitan capital, Funchal, a top destination for lifestyle buyers.

With a year-round sublime climate, Maderia is the dream for many. The Azores, to the northwest of Maderia, boast unique scenery, incredible gastronomy, and dazzlingly green rolling hills.

Both islands are very different but their commonality is their undisputed beauty, friendly locals, and high quality of life.

Comporta and Melides  

Comporta and Melides, located in the Alentejo region, have gained popularity in recent years. Located on the Southwest coast of the country, Comporta and Melides hug the Portuguese coastline and are characterized by their pristine beaches, sand dunes, and untouched natural beauty.

The architecture here is also unique, embracing nature in the design of many buildings while still keeping the typical style of the Alentejo region.

Comporta, in particular, has attracted attention from celebrities and jet-setters and has been nicknamed the “Hamptons of Europe,” making it a chic and exclusive destination to move to. 

Where to Find Property in Portugal

When buying properties in Portugal, it’s always a good idea to consult with an experienced real estate professional. The real estate market in Portugal is fragmented and there is no one place to find all the properties available. A property expert will provide full market access in addition to making the process of buying a home in Portugal much easier, guiding you from sourcing your ideal property through to acquisition.

Also, make sure the real estate agent you opt for is fully licensed. They should be certified by the Instituto da Construção e do Imobiliário (IMPIC). You can verify their credentials using their AMI license number, issued by the Associação de Mediadores Imobiliários.

How to Find Property in Portugal

Each buyer will be after something slightly different, and it is important to have a clear picture of what you are after and have a budget in mind. Here, we’ll guide you through the main points of finding the perfect property in Portugal.

Finding the perfect property for your needs

How to begin your property search

• Define your requirements: Make a list of your specific needs and preferences. Consider factors like location, size, budget, amenities, proximity to schools, healthcare services, transport, and other important facilities.
• Determine your budget: Establish a realistic budget for the property purchase and think about whether you will need a mortgage. This will help you narrow down your search and focus on properties within your price range.
• Research neighborhoods: Conduct thorough research on different neighborhoods to find areas that align with your lifestyle and preferences. Look for information on schools, for example, if you are moving with your children, and potential for future growth, if you may rent out the property in the future.

Navigating property websites

It’s important to note that there is no one place to find all the properties on the market, and instead, you’ll find a fragmented property market. It is, therefore, useful to enlist the help of real estate professionals. Buyer’s agents will also have access to properties that you will not find elsewhere on the market. With this said, here are a couple of tips to make the most out of property websites:

• A quick search for keywords, such as “buy home in Portugal”, “Portugal buying property” or “buy house Portugal,” can be a good place to start to get to grips with the Portuguese real estate market, what’s on offer, and determine which areas may be best for you.
• Websites often have advanced search filters that you can utilize to help you refine your search based on your requirements and compare real estate prices between neighborhoods to help you understand the property market.
• Consider setting up email alerts on property websites to receive notifications when new properties meeting your criteria become available.

Work with property specialists

• Work with a real estate professional: Consider enlisting the services of a reputable real estate agent or buyer’s agent. Qualified real estate agents can provide valuable insights, grant access to exclusive listings, and guide you through the entire property purchase process. Note that real estate agents work on behalf of the seller and will secure a higher commission for a higher sale. A buyer’s agent, on the other hand, will work solely on behalf of the buyer, ensuring their exact needs are met.
• Communicate your needs: Clearly communicate your requirements to the real estate agents you choose to work with so they can focus on finding properties that match your criteria.

Property viewings

• Schedule viewings: Once you have shortlisted some properties, schedule viewings to physically inspect them. Pay attention to the property’s condition, layout, and potential renovation needs. Real estate agents and buyer’s agents will be able to arrange viewings on your behalf.
• Ask questions: During viewings, don’t hesitate to ask questions about the property, the neighborhood, or any ongoing or planned developments. A top tip is to have some questions written down beforehand so that you can be sure to cover all the bases. Also, speak with neighbors to get a feel for the neighborhood. It is also worth visiting the property in the daytime and at night, as places can have a distinctly different feel to them depending on when you visit them.

Evaluating property prices and investment potential

Consider the long-term investment potential of the property. You should take into account factors like potential rental income, property appreciation, and the overall economic prospects of the area.

Navigating the Portuguese legal system

Navigating the Portuguese legal system can be tricky, particularly for individuals unfamiliar with the country’s legal procedures. Working with a Portuguese real estate lawyer is highly recommended.

Due diligence

Due diligence plays a crucial role in real estate transactions, enabling you to identify any legal issues or potential obstacles that need to be addressed before proceeding with the transaction. Your lawyer will conduct due diligence checks on your behalf. This can include issues with the property but also with the seller. They will also be able to inform you of any outstanding debt on the property.

Financing a Property in Portugal

Acquiring a new property, especially abroad, requires focus and careful observation when it comes to financing your property. In this section, we provide you with some information about mortgages in Portugal and the importance of defining your budget.

Get your budget straight

Before thinking about buying a property in Portugal, you should reflect on what finances you have available to purchase real estate and how much you want to invest. It’s important to find a safe balance between savings (if you already have the full amount, that simplifies the equation) and the need to finance part of the costs.

If you decide on monthly instalments, be aware that these should not exceed 35-40 percent of your monthly net income, just to be on the safe side.

When it comes to how to actually buy your property, there are several options on the table.

One-off payment

This option, pagamento a pronto, in Portuguese, involves paying the wholesale price of the property to the seller in one go, normally via a bank check that you hand over when you sign the property deed.

Mortgage loans

Getting a mortgage, either from a Portuguese bank or one at home and using the property itself as a guarantee against defaulting, is a more common option than a one-off payment.

Mortgage subrogation

If there is an outstanding mortgage on the property from the previous property owner, you can change the name of the debtor to your own name, taking on all the rights and responsibilities and making you the new mortgage payer. You have to request this from the same banking entity in which the mortgage already exists.

One benefit of subrogating a mortgage is that it saves the costs of a new mortgage, but the downside is that the terms and conditions are fixed, and you cannot really adapt them to meet your needs.

Getting a mortgage in Portugal

Another important aspect to consider is the availability of mortgages. Generally, residents have greater borrowing options compared to non-residents. If you plan on obtaining a mortgage loan to purchase property in Portugal, it is advisable to determine the maximum amount you can borrow before making an offer. There are several Portuguese banks that offer mortgages for foreigners.

For residents in Portugal seeking a mortgage, a deposit or down payment typically falls between 10 percent and 20 percent.

On the other hand, non-residents looking for a mortgage usually require a deposit of approximately 30 percent, although there may be cases where the percentage is slightly lower. Consulting with a mortgage broker can provide further guidance on this matter.

You can find out more about mortgages in Portugal in our article: How to Get a Mortgage in Portugal in 2024.

Step by Step: Buying a House in Portugal

In this section, we’ll provide you with a short step-by-step guide on how to buy a house in Portugal. We will provide more information on some of the steps later in the article, such as financing your property and tips on finding the ideal property.

Step 1: Financing your property

Before embarking on the journey of buying a house in Portugal, it’s essential to assess your financial situation and explore your financing options. If you plan to take out a mortgage, research various Portuguese banks to find the best interest rates and terms that suit your needs. There are many different Portuguese banks offering mortgage loans for foreigners, so it’s important to determine which one provides the best deal based on your requirements. Also, ensure that you have a clear understanding of the associated property costs, including taxes, legal fees, and property registration expenses.

Step 2: Finding your dream property

When searching for properties, you should have an idea of where you would like to buy and the type of property that you would like to purchase. For this, it is worth setting a budget and conducting thorough research online to get a basic understanding of the Portuguese real estate market. When scouting out properties, consider factors such as location, amenities, proximity to essential services, and potential for rental income if you intend to use the property as an investment. It is also worth listing the assistance of real estate professionals who will understand the property market and can help you find your ideal property.

Step 3. Making an offer and negotiation

When you find a property that fits your criteria, it’s time to make an offer. If you work with a real estate professional, they can help you with this, enabling you to secure the property at the best possible price. Negotiation is a customary part of the process in Portugal, so be prepared to engage in back-and-forth discussions with the seller until both parties reach a mutual agreement.

Step 4: Reservation Agreement and Promissory Contract (CPCV)

Once the offer is accepted and the negotiations conclude successfully, you may have a preliminary step (Reservation Agreement) that is basically used to show your intent to purchase the property and to ensure that the property is “off the market” while you make your final decision. Usually, with the signing of the Reservation Agreement, a reservation fee of between €5,000 and €15,000 will need to be paid. This can be completely refunded should you not move forward with the purchase. However, the refundability of the reservation fee and the terms for the refund to be made will have to be clearly stated on the Reservation Agreement.

The following step is the Promissory Contract (Contrato Promessa de Compra e Venda – CPCV). This contract solidifies the transaction and typically requires you to pay a deposit, which is often around 10 percent of the property’s purchase price. The CPCV is signed in front of a Notary. At this stage, ensure that you fully understand the terms and conditions outlined in the contract before signing it. The CPCV legally binds both parties to proceed with the sale according to the agreed-upon terms.

Step 5:  Sign the Escritura (Final Deed)

The final step in the property purchase process to finalize the purchase is signing the Escritura, also known as the Final Deed. This is the formal contract that transfers ownership of the property from the seller to the buyer. It must be signed in front of the Notary. Before signing, ensure that you or your legal representative thoroughly review the document and clarify any doubts. At this stage, you will be required to pay the remaining balance of the property price, as well as other associated fees and taxes. Once the Escritura is signed, you become the official owner of the property, and the process is complete.

Requirements for a Successful Property Purchase

An essential part of the process when buying real estate in Portugal is getting the Portuguese NIF number, a Portuguese tax number that is essential to opening a bank account in Portugal and for completing other important financial transactions in the country.

You can apply for a Portuguese tax number yourself at your local tax office or get an attorney to assist you. If you are a non-EU citizen, you will need to have a fiscal representative. To avoid having to go to the local tax office to get your Portuguese tax number, you can also apply for your Portuguese NIF number online.

It is highly recommended to open a Portuguese bank account when buying property to avoid transaction fees when making your purchase. There are a variety of Portuguese banks to consider, many of which offer mortgages for foreign buyers.

What are the lending terms?

There are more than 15 Portuguese banks that provide mortgages for foreign buyers looking to invest in Portuguese property. Mortgage terms usually range from 3 to 30 years. To be eligible, you will need to:

• Have a solid credit history in order to have your loan approved
• Have proof of a solid income, which you will need to show through pay slips or tax returns to show you can manage monthly mortgage payments
• Be aged above 18. While there is no statutory maximum for obtaining a mortgage, banks usually set their own limits, often requiring the mortgage to be fully paid by the time the owner reaches 70-80 years old.

Buying Property Portugal: Required Documents

In addition to your NIF number, which you can get from your local tax office, you will need the following documents:

• Photo ID: A valid identification document that verifies your identity.
• Contrato Promessa de Compra e Venda (CPCV): The buying contract or property deed that outlines the terms and conditions of the property purchase.
• Energy Certificate: This document provides information about the energy efficiency of the property and must be presented to you by the seller.
• Imposto de Selo: The stamp duty payment, which is a tax required by the Tax Authority for property transactions.
• Caderneta Predial: The land registry certificate that contains information about the property, including its location, boundaries, and registered owner. The land registry certificate, issued in paper format, serves as evidence of the legal status of a property as of the date of issuance. The land registry certificate compiles and describes the current registrations applicable to that property.

Having these documents is essential for a smooth and legally compliant real estate transaction in Portugal. We recommend working with an independent lawyer who will be able to assist you with determining the documents you need and completing due diligence checks on your property on your behalf.

Buying Property in Portugal Pitfalls

Be aware of the following pitfalls of buying real estate in Portugal.

Legal complexities: We highly recommend working with an experienced real estate lawyer to ensure you will face no legal issues, for example, in checking if the owner has the right to sell or if there are any outstanding debts associated with the property. You should also make sure that the deeds are correct, again highlighting the importance of lawyers for a successful real estate purchase.

Taxes: Ensure you are up to speed on property taxes, maintenance fees, and other associated fees.

Property location: Ensure you are completely content with the location of the property and that it is conveniently located, such as close to a school if you are moving with family.

Title deed verification: Ensure thorough verification of property title deeds to avoid any disputes or legal complications in the future.

Buildings may have been constructed with no administrative record: You may need to ensure that your purchase incorporates a ‘rectification’ process, not only updating the records but also legitimizing any existing structures that lack proper planning permissions. The key difficulty with this is agreeing with the seller to get things sorted and working out who should pay for it.

Property Tax in Portugal

When it comes to buying a house in Portugal, you will need to be aware of the taxes that you will need to pay. In this section, we’ll first delve into the taxes that you will need to understand and budget for when purchasing Portugal real estate and then discuss the taxes you will need to consider after the purchase process.

Taxes to consider during the purchase process

Below, we briefly explore the taxes to consider during the purchase process.

Property Purchase Tax (IMT)

The Imposto Municipal sobre as Transmissões Onerosas de Imóveis (IMT) or Municipal Tax on Onerous Transmissions of Real Estate) is a property transfer tax in Portugal, which is also referred to as the Property Purchase Tax. The tax rate varies from 0 to 10 percent and is levied over the purchase price of the property.

The 0 to 8 percent range depends on the price, location, property type, and purpose for which the property will be used, for instance, whether it will be used as your permanent residence or secondary housing. The 10 percent rate applies in cases where the buyer has connections with territories that benefit from favorable taxation schemes, known as blacklisted jurisdictions. When calculating the Property Purchase Tax (IMT), the following criteria are taken into consideration:

• Type of property: Urban property or rural property
• Buying purpose: Principal or secondary residence
• House location: Mainland Portugal or its autonomous regions
• Blacklisted jurisdictions: Whether the property owner has connections with territories that benefit from favorable taxation schemes

You can use the following sum to work out the Portugal tax rate:

IMT = property value x tax rate x tax deduction

You can calculate the IMT  using our Portugal property tax calculator.

Imposto do Selo (Stamp Duty)

Imposto do Selo, or Stamp Duty, is one of the oldest state taxes and an additional transaction cost for property buyers. It is levied on title deeds, contracts, bank mortgages, and loans. Securities subject to Stamp Duty also include bills of exchange and promissory notes, although these are not typical instruments for property acquisition.

The Stamp Duty you pay depends on the property’s worth. The rate for purchasing a property in Portugal is 0.8 percent of the value of the business or the value of the property, levied on the higher value. If the property is donated, the Stamp Duty for the transaction will be 10 percent of the value of the business or the value of the property.

Stamp Duty

Imposto do Selo (Stamp Duty) is one of the oldest state taxes and is an additional transaction tax for real estate transfers. Typically, it amounts to 0.8 percent of the deed’s total value and must be paid at the time of purchase.

Notary fees

Although it is not a tax, you will need to take Notary fees into consideration. The Notary is the private entity responsible for providing you with the official documents that prove you are the owner of the property. This fee usually amounts to between €500 and €1,000.

Taxes to consider after the purchase

In this section, we will briefly discuss the taxes you should consider and budget for once you have acquired your property.

Municipal Property Tax (IMI)

The Imposto Municipal sobre Imóveis (IMI), also known as Municipal Property Tax or Immovable Property Tax, is an annual tax that property owners in Portugal must pay. The municipality where the property is located determines the tax.

The IMI is levied on the Property Tax Value (VPT) and not on the property price paid upon purchase. For urban properties, the IMI rate ranges from 0.3 to 0.45 percent of the VPT, which can increase to 0.5 percent in some instances. The IMI rate applied for rustic buildings is 0.8 percent.

AIMI Tax (Additional to IMI Tax)

If you’re investing in a higher-end property in Portugal that has a value of more than €600,000 are subject to the additional property tax known as Adicional ao Imposto Municipal sobre Imóveis or AIMI.

This tax is charged on real estate assets owned by natural or legal Portuguese residents who own properties with a high Tax Asset Value (VPT). AIMI can be calculated as follows:

• 0.7 percent tax on owning property valued between €600,001 and €1 million
• 1 percent tax on property valued between €1mil and €2 million
• 1.5 percent tax on property if its total value is above €2 million

The €600,000 threshold applies individually. If the property is jointly owned with your partner, AIMI will only apply if the property’s value exceeds €1.2 million.

Capital Gains Tax

When you sell your Portuguese property, any capital gain from the sale may be taxable. Capital gains refer to the profit made from the property’s sale. Capital Gains Tax is levied on property sales in Portugal, and the amount you pay depends on your residency status.

Capital Gains Tax is levied differently for Portuguese residents and non-residents who sell property in the country. For Portuguese residents, the tax on capital gains is only levied on 50 percent of their whole capital gain. When your real estate capital gain is added to your other yearly income, taxation will take effect. It may range from 14.5 percent to 48 percent, depending on the income tax scale rates, with the income tax rate determined by your earnings. Non-residents are taxed at a rate of 28 percent and on the full amount of the capital gain from the property sale.

Portuguese Capital Gains Tax on real estate is based on the real estate added value, which is the amount obtained by subtracting it from the property’s sale value. The Capital Gains Tax rate is applied to this result.

Inheritance tax

There is no Inheritance Tax in Portugal. However, a 10 percent Stamp Duty will apply to the assets passed on as inheritance. Spouses, descendants, and ascendants inheriting said assets are exempt from paying the Stamp Duty fee.

Can you purchase a house in Portugal with crypto?

In Portugal, it is now possible to purchase a property using Bitcoin. The first recorded instance of this occurred in May 2022, when an investor bought a property in the city of Braga using cryptocurrency. It is also possible to sell your house for crypto in Portugal.

Property Purchase Costs

In addition to the payment for the property and the associated fees, you should be aware of the following additional costs.

• Legal fees: A lawyer will cost you approximately €2000-€5000, depending on the type of property, the price, and the complexities of the purchase.
• Land Registry Fee: There is a public fee for the Land Registry, amounting to €250.
• Notary Fees: Notary fees will cost you around €500-1,000.
• Mortgage: Factor in costs for a mortgage broker, including the application fee of €290 and the bank valuation fee of €280.

Is it worth buying property in Portugal?

While the Portuguese real estate  is rich and dynamic, you may be asking yourself, “Is now the right time to buy?” This is a complex question and will depend on your current situation. While property prices have been increasing in the past few years in many key areas, buying a property in Portugal is a good financial investment, whether you are looking for capital appreciation or to rent out your property for long-term gains.

What to consider before buying property in Portugal

Demand for accommodation in Portugal, particularly in key cities such as Lisbon and Porto, means that investors can get a nice return on their investment in the long term. If you are considering investing in short-term rentals, ensure you do your research and speak with a real estate specialist who will be able to advise you on potential locations.

Is there a real estate bubble in Portugal?

The Portuguese economy has experienced a steady increase following the financial crisis and recession. The boom in tourism and a thriving housing market are key indicators of this recovery. Currently, major cities are experiencing a surge in demand for property that surpasses the available supply, resulting in a significant uptick in property prices. The trend is further fueled by ongoing renovations of neglected buildings, the construction of new apartment complexes, and the emergence of new hotels. Consequently, some neighborhoods are undergoing significant gentrification.

The combination of robust tourism and heightened demand is driving up rental prices, raising concerns about a potential real estate bubble in Portugal. Many properties are being perceived as overvalued. The persistence of this property bubble seems likely unless there is a slowdown in interest from foreign investors, who have been the predominant buyers in recent years.

Property trends in Portugal

After property transactions fell by around 20 percent, the Portuguese real estate market stabilized from the second quarter of 2023 onwards. Predictions for 2024 suggest that the Portuguese economy will gradually pick up momentum despite facing political and economic uncertainties on a national level and globally. Alongside this, while current interest rates are high at the moment, they look set to fall, potentially fostering more favorable real estate market conditions as the year progresses.

Should you be looking for rehabilitation and renovation projects, you should be able to find some properties at excellent prices. True, many will require lots of work done to them, but some will need less major repairs and could be an excellent way to jump onto the Portuguese property ladder without breaking the bank.

Is it worth buying property in Portugal for rent?

Buying Portugal real estate to rent is an excellent financial investment. It is worth it as there is more demand for accommodation than what is currently available — especially in Lisbon and Porto. Also, rental yields during peak tourism season make property rental in Portugal a viable investment. For example, a vacation rental in the Algarve to put up for short-term rentals could be a lucrative option.

Renting versus buying property

While there is no right or wrong answer to this – it will depend completely on your personal situation and budget – buying property is the better financial option in the long term. Renting a place while you search for the perfect property to buy is also a good idea so that you have a base to explore neighborhoods or areas of the country.

Selecting the seller

Carefully select which seller to buy from. Remember that the negotiation and purchase process can depend very much on who you are buying the property from: A private property seller, real estate agent, developer, or bank.

Choose who to buy with: A Buyer’s agent versus a realtor

In Portugal, while a realtor (or real estate agent) works on behalf of the seller and will secure a higher commission for a higher sale, a buyer’s agent works exclusively on behalf of the buyer, ensuring your needs are met. From scouting out the ideal property based on your exact requirements to negotiation and aftercare, they will assist you throughout the buying process, reducing hassle and stress.

Goldcrest: How We Can Help You Secure Your Dream Home

Goldcrest is a buyer’s agent that is based in Lisbon, Porto, and the Algarve. We provide expert, impartial advice on real estate investments and how to buy property in Portugal. From scouting out the perfect property through to property acquisition, we have you covered throughout the process.

If you are looking to purchase property in Portugal, don’t hesitate to get in touch. Our team of skilled experts is available to solve all your real estate doubts, offering insightful expertise and strategic advice. We also provide comprehensive after-sales services and can assist with property set-up and property management, amongst other services.

What’s more, with our residency and citizenship division, Global Citizen Solutions, we are your one-stop-shop for all things related to residency, citizenship, and setting up your NIF number in Portugal. Why not book a non-binding call with us today to find out more about your options?

Why choose Goldcrest?

• Local knowledge: With offices located across Portugal, our presence nationwide allows us to assist you personally across the country.
• Independent service: As an independent buying agent, we do not represent any development or project. Our service is entirely tailored toward each individual client, providing you with everything you need to secure the perfect property at the best possible price. As an impartial advisor on the real estate market, we work solely on behalf of our client and provide a service tailored to your needs and requirements.
• Streamlined process: Our real estate agents speak English and Portuguese, and our service is completely focused on providing you with a hassle-free buying experience, saving you time.
• Experienced team: Our expert real estate team has a vast local knowledge of the real estate market. We have cutting-edge technology and metasearch tools at our disposal to provide full market coverage, ensuring the best investment choices and negotiated prices.
• Network of partners: Our network of contacts includes lawyers, property management services, builders, architects, designers, and landscape gardeners, again saving you time and hassle by providing you with trusted experts in their field of work.

You can also check out our latest book on Buying Property in Portugal, where we provide you with a rundown of the buying process, top locations to consider, practical information vital to your move, plus much more. You can find a preview of the book here.