Guide to Buying Property for Sale in Portugal

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Andrea Barnes
Editor
Andrea is Communications Manager at FXcompared. Prior to joining FXcompared, she worked as a communications consultant for companies seeking guidance with their social media, marketing and digital… Read more

How to Buy Property in Portugal

Whether you are seeking a holiday getaway or looking to invest in overseas real estate, property for sale in Portugal is appealing for a number of reasons. 

Though the cost of housing in Portugal is considered to be quite low compared to the rest of Europe, prices of real estate in Portugal have increased in recent years. Bloomberg reported, via property data company Confidencial Imobiliario, that house prices in Portugal rose by 18.7% in 2022, indicating a growing popularity in Portuguese real estate in the wake of the Covid-19 pandemic, when prices fell in some regions. 

Potential investors should know that over the five years prior to 2023, the euro’s current valuation against the US dollar has declined significantly, while against the British pound it has fluctuated but remained relatively steady. That being said, Portugal’s reasonably priced real estate makes it an excellent opportunity for foreign investors looking to buy an overseas property.

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Portugal Welcomes Foreign Buyers

Portugal recognizes the appeal of its real estate market and is aiming to attract more foreign investors to property for sale in Portugal. To entice foreign buyers, Portugal is offering non-EU citizens a 5-year residency permit when they buy a Portuguese property worth a minimum of €500,000. This permit allows the holder to work, study, and travel throughout participating Schengen countries. After five years the permit holder can then apply for permanent residency, if they choose.

While there are no restrictions on foreign property ownership in Portugal and transaction costs are generally low, the level of bureaucracy involved in the process of purchasing or selling Portuguese real estate can make it more difficult for those who are not familiar with the Portuguese language, its legal and administrative systems, and home-buying process.

Portugal Welcomes Foreign Buyers

Portugal recognises the appeal of its real estate market and is aiming to attract more foreign investors to property for sale in Portugal. 

To entice foreign buyers, Portugal is offering non-EU citizens a five-year residency permit when they buy a Portuguese property worth a minimum of €500,000. This permit allows the holder to work, study and travel throughout participating countries in the Schengen Area (the 27 European countries that have removed border control at their mutual borders). After five years the permit holder can then apply for permanent residency, if they choose.

While there are no restrictions on foreign property ownership in Portugal and transaction costs are generally low, the level of bureaucracy involved in the process of purchasing or selling Portuguese real estate can make it more difficult for those who are not familiar with the Portuguese language; its legal and administrative systems; and home-buying process.

One example of this is the Número de Indentificação Fiscal, which is a tax identification number that’s required for all purchases that involve paying tax in the country. Whether you are buying to invest or live in Portugal, you’ll need to apply for one of these numbers from the Portuguese Tax and Customs Authority.

A Practical Guide to Buying Property in Portugal

FXcompared's Guide to Buying Property in Portugal will help you navigate the world of Portuguese real estate. It is important to understand and follow the proper procedures to ensure your transaction is successful. There are a number of things to consider that can help make for a smoother property purchasing experience:

  • Define your goals
  • Account for changing exchange rates
  • Research financing options
  • Learn the rules and regulations
  • Know the neighbourhood
  • Use a money transfer provider
  • Manage expenses

Read on to learn more about buying property in Portugal.

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Define Your Goals

Identifying what you want to accomplish with your purchase upfront will save you time and effort in the long run, as well as help you to find the best home for your needs. Your investment objective obviously plans a large role in your decision-making process.

Are you looking for a primary home; a rental property that can supply steady cash flow; a holiday home to share with family and friends; a pied-a-terre for work or occasional visits; or a future home for retirement? Your investment objective should be clearly established before you make any decisions.

You should also create your own list of the most important factors to consider when looking for a new home in Portugal. Factors such as neighbourhood safety and crime statistics, location, community resources, access to public transportation or future developmental plans for the area are all important things to consider.

If you plan to rent out a property that you have bought with a view to retiring in Portugal at a later date, there are a number of expenses to consider. These include your monthly mortgage payments (if the unit is not rented out, you need to be prepared to cover payments until it is occupied again); taxes; and any repairs, renovations or ongoing maintenance that the property may need. Knowing all your expenses upfront will help you determine how much you can afford to spend.

Account For Changing Exchange Rates

Currency exchange rates don’t always stay the same, and if the rate isn’t in your favour when you send a large amount of money abroad, you could stand to lose a lot of money during your purchase. Talking to a money transfer provider early in the process can help you identify the best options to assist you in managing risky international currency markets. 

It is common for foreign exchange brokers to offer their customers a number of products and strategies that can lock-in a future exchange rate to protect against currency market risk. Forward contracts and hedging strategies can also help you manage foreign exchange currency risk.

A broker specialising in international transfers can also help you determine if you are better off paying in your home currency or in euros. Refer to the overseas property buying checklist for questions to consider and visit our historic exchange rates page for a big picture view of current currency market trends.

Research Financing Options

Many people choose to make an all-cash payment when purchasing a home abroad, but financing is also an option. Be aware, however, if you choose to finance your purchase it may be difficult to obtain financing from abroad.

No matter how you choose to pay for your new home, it is highly recommended by most experts that you retain the advice of a real estate attorney who speaks the language and is familiar with the Portuguese real estate market to advise you.

You should also factor in the additional costs that come with buying a home in Portugal which the buyer must cover: the deposit, which is typically between 10-20% of the purchase price; a property transfer tax, which can be between 0-8% of the purchase price; notary and property registration fees; real estate agency fees, which are typically 5%; and a stamp duty, which is currently fixed at 0.8% of the purchase price. 

It is important to have a plan in place to send money overseas when you need to make payments to cover these fees.

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Learn the Rules and Regulations

There are a number of steps to navigate to successfully purchase real estate in Portugal. Getting a Portuguese-speaking lawyer and a licensed real estate agent – who can help negotiate the property price and the associated fees you need to pay – will help enormously. 

You can find listings for licensed agents through the Portuguese Chamber of Commerce, as well as English-language newspapers such as the Algarve Resident and the Portugal News. Portuguese newspapers such as Publico, Correio da Manha, Expresso, Sol and Metro also can contain listings from agents. If you do not speak Portuguese, get documents professionally translated and only sign when you understand what you are signing.

It is easy to learn about a country’s foreign property ownership laws by checking the International Consortium of Real Estate Associations website or by visiting the US State Department’s website for more information on Portugal's safety and stability.

portugal property madeira overseas investment

Manage Expenses

Managing expenses for your overseas purchase means identifying those expenses upfront so you know exactly what you need to ensure a successful transaction. You want to factor in all relevant costs and expenses as early as possible to give yourself the time to research all your options for payment.

You should also factor in expenses such as mortgage payments, construction or renovation work, surveyor or maintenance fees, additional taxes and any other costs that might be relevant to your situation.

If you have monthly payments to make, such as a monthly mortgage payment, it is easy to set up a recurring payment plan with a money transfer provider, which can make the process much easier to manage, offer you better currency exchange rates and save you costly monthly bank wire transfer fees. 

It is worth the time to compare different providers to find the best broker for your needs. Luckily, FXcompared's comparison tool can help you find the best money transfer provider for your specific needs. 


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FXcompared.com is an fx money comparison site for international money transfer and to compare rates from currency brokers for sending money abroad. The website and the information provided is for informational purposes only and does not constitute an offer, solicitation or advice on any financial service or transaction. None of the information presented is intended to form the basis for any investment decision, and no specific recommendations are intended.  FXC Group Ltd and FX Compared Ltd does not provide any guarantees of any data from third parties listed on this website. FX compared Ltd expressly disclaims any and all responsibility for any direct or consequential loss or damage of any kind whatsoever arising directly or indirectly from (i) any error, omission or inaccuracy in any such information or (ii) any action resulting therefrom.