Portugal continues to be a sought-after destination for international property buyers in 2025. Whether you’re looking for a vacation home, a retirement retreat, or an investment property, understanding the buying process, associated taxes, and mortgage options is crucial. This guide walks you through everything you need to know.
📝 Can Foreigners Buy Property in Portugal?
Yes, foreigners can purchase property in Portugal without restrictions. The process is transparent and accessible to international buyers, whether you’re from the EU or a non-EU country. (Portugal Homes)
🛠️ Step-by-Step Guide to Buying Property in Portugal
1. Obtain a Portuguese Tax Identification Number (NIF)
Before initiating any property transaction, you must acquire an NIF. This number is essential for all legal and financial dealings in Portugal, including property purchases. (Tytle)
2. Open a Portuguese Bank Account
A local bank account is necessary for financial transactions related to the property purchase, such as paying taxes and receiving mortgage funds.
3. Engage a Lawyer
While not mandatory, hiring a lawyer specializing in Portuguese real estate law is highly recommended. They can assist with due diligence, contract review, and ensure all legal requirements are met.
4. Find a Property
Utilize reputable property portals like Idealista, Casa Sapo, and Imovirtual to search for properties. It’s advisable to visit the properties in person before making an offer.
5. Make an Offer and Sign a Promissory Contract
Once you find a suitable property, make an offer. Upon agreement, both parties sign a “Contrato de Promessa de Compra e Venda” (CPCV), committing to the sale. A deposit, typically 10% to 30% of the purchase price, is paid at this stage. (Portugal Investment Properties)
6. Finalize the Purchase
The final deed, known as “Escritura de Compra e Venda,” is signed before a notary. The remaining balance is paid, and ownership is officially transferred.
💰 Taxes and Additional Costs for Property Buyers
Understanding the taxes and additional costs involved is crucial for budgeting your property purchase.
IMT (Property Transfer Tax)
IMT is a progressive tax paid upon purchasing property. Rates vary based on the property’s value and whether it’s your primary residence. (Portugal Investment Properties)
Stamp Duty (Imposto do Selo)
A one-time tax of 0.8% of the property’s purchase price or the property’s tax value, whichever is higher.
IMI (Municipal Property Tax)
An annual tax based on the property’s tax value, ranging from 0.3% to 0.8%, depending on the municipality.
Notary and Registration Fees
Fees for the notary services and registering the property in your name, which can vary but are generally modest.
Legal Fees
If you hire a lawyer, their fees will depend on the complexity of the transaction.
🏦 Mortgages for Foreign Buyers
Portuguese banks offer mortgage options to foreign buyers, though terms may differ from those available to residents.
Deposit Requirements
Non-resident buyers are typically required to provide a deposit of at least 20% to 30% of the property’s value. (Global Citizen Solutions)
Loan-to-Value (LTV) Ratio
Banks generally offer mortgages covering up to 70% to 80% of the property’s value or appraised value.
Interest Rates
Interest rates for mortgages in Portugal are competitive, with fixed rates ranging from 2.5% to 3.3% for the initial years. (Portugal Buyer Tours)
Required Documentation
To apply for a mortgage, you’ll need to provide proof of income, bank statements, and a clean credit history.
🏡 Residency Options Linked to Property Ownership
While purchasing property in Portugal doesn’t automatically grant residency, there are visa options available for those looking to reside in the country.
D7 Visa
Suitable for retirees or individuals with passive income. Requires proof of sufficient income to support yourself during your stay.
D8 Visa
Designed for remote workers and freelancers willing to work remotely from Portugal. Requires proof of remote employment or business activity. (Portugal Investment Properties)
📌 Final Tips for Foreign Buyers
- Due Diligence: Always conduct thorough research on the property’s legal status, including checking for any debts or encumbrances.
- Professional Assistance: Engage professionals such as lawyers and real estate agents who are familiar with the Portuguese property market.
- Budgeting: Account for all taxes, fees, and potential renovation costs when budgeting for your property purchase.
- Local Regulations: Be aware of local zoning laws and regulations, especially if you plan to rent out the property.
