Portugal is a captivating destination, known for its rich history, mild climate and stunning landscapes. With a dynamic real estate market, foreigners from all over the world consider our country an ideal refuge for purchasing property, whether for permanent residence or investment. This complete guide for 2024 provides a detailed overview of the property acquisition process in Portugal, clarifying legal, tax and other crucial elements to be considered by foreigners.

Introduction to the Real Estate Market in Portugal

Portugal is a destination appreciated by foreigners, thanks to its mild climate, feeling of security, good schools, quality services and infrastructure, for having receptive and hospitable people, where command of the English language is great, magnificent landscapes and a rich culture . These reasons are amplified by an attractive real estate market, which promotes the acquisition of properties in the country.

Recent Trends in the Real Estate Market

The Portuguese real estate market has experienced a positive rise over the last decade. House prices have grown, following tourism growth and demand from foreigners, urban rehabilitation persists, especially in historic areas of Lisbon and Porto. New real estate projects, especially luxury ones, demonstrate investors' confidence in the market.

The demand for properties in quiet regions such as the Algarve, Comporta and the coast north of Lisbon has increased. The appreciation for homes with outdoor spaces and green areas has also stood out.

Popular Areas for Foreigners

Lisbon and Porto are cities of choice due to their charm, historical scrolls and cultural offerings. On the outskirts of Lisbon, Oeiras and Cascais dominate, while in Porto, from Matosinhos to Gaia, the riverside and seaside areas are at the top. The Algarve, with its beaches and golf courses, is a popular choice for a more serene lifestyle, where Tavira, Faro and Vilamoura have been on the rise.

Available Property Types

The market offers a diversity of options, from modern apartments in urban centers, to luxurious villas with stunning views, to well-priced farms and estates in the interior of Portugal. The supply of new developments has grown, providing modernity, comfort and sustainability, with amenities such as swimming pools, gyms and concierge services.

With a safe environment, favorable legislation and excellent quality of life, Portugal is a solid option for those looking for a new residence in Europe.

Legal and Tax Requirements

Portugal has stood out as an attractive destination for foreign investors in the real estate sector, largely due to its friendly legislation and tax benefits. However, it is crucial to be well informed about the legal and tax requirements inherent to purchasing a property in Portugal.

It is vital to be well informed and possibly be assisted by competent professionals, such as lawyers and tax consultants, to ensure that all legal and tax requirements are met efficiently. With proper preparation, the process of buying a property in Portugal can be carried out successfully, allowing you to enjoy everything this beautiful country has to offer.

Required Documentation

Tax Identification Number (TIN): Before any transaction, it is essential to obtain a Tax Identification Number in Portugal. This number is mandatory to carry out any type of real estate transaction and can be obtained through Finance or a tax representative.
Portuguese Bank Account: To facilitate transactions, it is advisable to open a bank account in Portugal. This process is relatively simple, requiring only an identification document, proof of address and NIF.
Power of attorney: If you cannot be present during the various stages of the process, you can appoint a representative through a power of attorney.

Tax Regime for Non-Habitual Residents (RNH)

Portugal offers a very favorable tax regime for non-habitual residents, which provides a flat IRS rate of 20% and exemption from double taxation on pensions for a period of 10 years.

Attention: Recently, in the State Budget for 2024, the Prime Minister of the Government of Portugal announced the end of this exceptional measure, remaining in force until the end of 2024 but, considering the resignation of the current government and the new elections scheduled for March 2024, everything remains open.

Taxes Associated with Property Purchases

Municipal Tax on Onerous Property Transfers (IMT) : This is a municipal tax that must be paid before the deed. The fee varies depending on the type and value of the property.
Stamp Duty : This tax applies to both the purchase price of the property and the loan amount (if applicable), with a rate of 0.8% on the purchase value and 0.6% on the loan amount.
Municipal Property Tax (IMI) : This is an annual tax based on the asset value of the property, with rates varying between 0.3% and 0.8%.

Buying process

The process of buying a property in Portugal is quite structured. It starts with choosing the property and continues with price negotiation. Subsequently, a Purchase and Sale Promise Contract (CPCV) is signed, which is a legal agreement between the buyer and the seller. Then, the public deed of purchase and sale is carried out, which is the formal act of transferring the property. Below are the typical steps involved in the process of buying a property in Portugal:

Property Search and Selection: The first step involves researching and selecting the desired property. It is advisable to work with a licensed real estate agent who can help find properties that meet your needs and preferences.
Property Views: Schedule visits to properties of interest with your real estate agent to get a clear understanding of what is on offer.
Offer and Negotiation: Once you have found the desired property, the next step is to make an offer. Price negotiation is a common practice and your real estate agent can help with this.
Reservation: It is not always necessary, but they may ask you for a deposit to secure the property, and stop the process of visits and mediation. Usually the owner asks for a symbolic amount, between €5,000 and €10,000.
Purchase and Sale Promise Contract (CPCV): After acceptance of the offer, a CPCV is drawn up. This contract details the terms and conditions of the sale, including the purchase price, completion date and any other conditions. It is at this stage that the first payment is usually made, normally between 10% and 20% of the agreed purchase price, minus the reservation value (if any). It is advisable to request CPCV registration at the Land Registry Office. It is important to remember that the usual clauses of a CPCV provide for the total loss of the amount paid by the prospective buyer, if the agreed deadlines for the execution of the Deed are not met. On the other hand, the owner must return double the amount paid by the buyer, in case the selling owner withdraws.
Legal Checks and Due Diligence: It is crucial to carry out legal checks to ensure that there are no liens or encumbrances on the property. A lawyer can help verify the legality of the property and ensure everything is in order. On the other hand, the prospective buyer must comply with the legal requirements imposed by the money laundering law, namely identification and due diligence procedures - in relation to buyers, their representatives and beneficial owners, as long as they carry out transactions of an equal or greater amount to 15,000 euros (regardless of whether the transaction is carried out in a single or several operations), and screening for the veracity or adequacy of customer identification data previously obtained, as well as any suspicions related to money laundering or terrorist financing .
Payment of Taxes: Payment of taxes associated with the transfer of property, such as the Municipal Tax on Onerous Property Transfers (IMT) (invoices for payment of this tax are issued 24 hours before the Deed), and the Stamp Tax (paid 24 hours before the Deed of Purchase and Sale or on the same day), is a crucial step in this process.
Public Deed of Purchase and Sale: The deed is the final document that formalizes the sale of the property. It is signed in the presence of a notary, or solicitor/lawyer, who verifies and validates the transaction. It is in this act that proof of the remaining payment (made via transfer or bank check, from a bank registered in Portugal) and payment of taxes due is provided. If it is not possible for the buyer(s) to be present, they may be represented by an attorney.
Property Registration: After the deed, the property must be registered in the name of the new owner in the Land Registry. This is a crucial step that confirms the legal transfer of ownership.

Buying a property in Portugal can be a simple and straightforward process when conducted in an informed manner and with the support of competent professionals. It is vital to ensure that all legal steps are followed correctly to ensure a successful and secure transaction. Once again, I reinforce: the advice of lawyers and other specialized professionals can be invaluable in successfully and safely navigating the process of purchasing property in Portugal.

Financing

Buying a property in Portugal can be more accessible with the help of financing. There are several financing options available to foreigners, which makes it easier to purchase a home or invest in properties in the country. Below we detail some of the options and steps related to real estate financing in Portugal:

Financing Options: Mortgage Loans are the most common form of financing for property purchases. Portuguese and international banks offer mortgage loans with different conditions and interest rates.
Housing Credit: This is a specific type of mortgage loan intended for the purchase of your own home.
Private Investors or Real Estate Credit Companies: Alternatives to traditional bank financing, they can offer different conditions.
Property Assessment: Before approving financing, the bank or financing entity will carry out an assessment of the property to determine its market value and the amount that can be financed.
Credit Analysis: Financial institutions will carry out a credit analysis to assess your repayment capacity. This analysis includes reviewing your financial situation, credit history and income.
Rates and Conditions: Interest rates and financing conditions may vary significantly. It is important to compare different offers to find the most advantageous option.
Required Documentation: You will need to provide a series of documents, including proof of income, identification and details of the property you wish to purchase.
Approval and Disbursement: After financing approval, funds will be disbursed, generally directly to the seller, on the date of the deed.
Insurance: It is mandatory to have life insurance and home insurance to obtain a mortgage loan in Portugal.
Loan Management: After loan disbursement, it is important to manage repayments effectively and be aware of associated conditions, such as early repayment fees or changes in interest rates.

Financing can be a valuable tool in facilitating the purchase of a property in Portugal. However, it is crucial to be well informed about the available options, requirements and long-term implications of financing. Assistance from a financial advisor or mortgage intermediary can be very helpful in navigating the financing process and ensuring the best possible terms.

Residency Programs: Gold Visas and Non-Habitual Resident Program

Portugal has been attracting more and more foreigners, not only for its beautiful landscapes and mild climate, but also for its investment opportunities and tax benefits. In this context, two main programs stand out: the Golden Visa Program and the Program for Non-Habitual Residents (RNH).

Gold Visas:

Golden Visas are a very attractive gateway for foreign investors who wish to reside or invest in Portugal. This program offers a temporary residence permit for investors and their families, with the possibility of obtaining Portuguese citizenship after five years.

Although it is no longer possible to apply for a Golden Visa based on the purchase of a property, the Portuguese Golden Visa program remains active, keeping all the incredible benefits unchanged. There are several other ways to apply, including investing in qualified projects or venture capital funds . If carried out through the investment of at least 500,000 euros in eligible funds, it makes it possible to apply for residency for the investor and his family. The companies targeted by this investment must have been in existence for at least 5 years at the time of application, and at least 60% of the invested capital must be directed to commercial companies based in Portugal.

Obtaining a Portuguese passport and residence in the EU, through the Golden Visa program, offers instant free movement in the 27 countries of the Schengen Area, requiring a minimum investment of 500,000 euros. This program, which takes just 4 to 6 months until residence cards are issued, allows the investor and his or her immediate family to have access to education and healthcare in Portugal, in addition to working, living and studying in the country without (with minimum stay). This simplified process stands out for its efficiency and the advantages it provides, opening doors to unique opportunities in the European Union.

The Golden Visa scheme, aimed at individuals with a clean criminal record who are not Portuguese, EU or EFTA citizens , is accessible to citizens from outside these territories, including those from the United Kingdom. Popular especially among Chinese investors, who make up more than half of the applicants, it allows the inclusion of family members, such as dependent spouses, children, parents or in-laws.

It is a practical and advantageous investment: The process can be managed remotely, with the fund managers taking care of the investment. Portuguese Golden Visa funds offer the possibility of generating high returns, with a variety of funds that present different levels of risk. Therefore, for those who accept greater risk, there is significant potential in terms of both income and capital appreciation if the investment is sold in the future.

Program for Non-Habitual Residents

The Program for Non-Habitual Residents (RNH) is another significant attraction for foreigners who wish to move to Portugal. This program offers a very favorable tax regime over a period of 10 years for individuals who become tax residents in Portugal and who have not been tax residents in Portugal in the last five years. The RNH regime provides a total exemption on income from a foreign source and a flat rate of 20% on income from a Portuguese source.

The requirements to become a Non-Habitual Resident include registration as a tax resident in Portugal and staying in Portugal for more than 183 days per tax year or, if staying for a shorter period, having a home that you intend to maintain as your habitual residence.

Attention: Recently, in the State Budget for 2024, the Prime Minister of the Government of Portugal announced the end of this exceptional measure, which will however remain in force until the end of 2024 but , considering the resignation of the current government and the new elections scheduled for March 2024, everything remains open.

These programs have contributed significantly to foreign interest and investment in Portugal, benefiting both foreigners and the local economy. In addition, they have also promoted the real estate market and urban rehabilitation, contributing to the development and appreciation of Portuguese cities. For foreigners interested in taking advantage of these opportunities, it is advisable to seek qualified legal and tax advice to ensure that all conditions and requirements are adequately met.

Cost of living

Portugal is recognized for its relatively low cost of living compared to other European countries. The cost of living is one of the advantages that attracts both natives and foreigners, providing a comfortable life without requiring exorbitant expenses. However, these differences can vary significantly depending on the sector of activity:

Housing: Housing costs vary depending on the region. Lisbon, the capital, has the highest prices, followed by Cascais, while in the north and interior, costs are considerably lower. In the Algarve, Loulé is the most expensive region, with Quinta do Lago and Vilamoura standing out, and in other locations, prices fluctuate depending on the proximity to the sea and the relevance of the urban area. Rentals are scarce in the main urban areas, leading to more inflated prices, comparable to those in other European cities. South of the capital, from Tróia, through Comporta and to Melides, prices are high, but thanks to the privileged location between almost virgin beaches and almost immaculate nature, they are one of the main attractions for foreign buyers.
Food: Portugal is famous for its gastronomy and wines. Prices in restaurants and markets are reasonable, allowing you to enjoy a good meal without spending too much. The cost of a bottle of wine, whether in supermarkets or many restaurants, is a pleasant surprise. It's not difficult to find a good quality bottle of wine for 2~3 euros! In addition to prices, the diversity is also vast, both in national products, recognized for their quality (fish, meat, fruit, vegetables, etc.), and in imported products. The fresh fish, in terms of quality and price, rivals that of any other European city.
Transport: Public transport is efficient and economically accessible. There are social passes in the main cities at very low prices. Furthermore, fuel and vehicle maintenance are competitively priced. In recent years, major cities have made a significant investment in cycle paths.
Basic Services: Basic services such as electricity, water and gas are also more accessible compared to other European countries, taking into account that, thanks to the climate and sun exposure, Portugal has a lower energy consumption matrix. Regarding communications and internet costs, they are a little above the EU average, but nothing excessive.
Health: The cost of health services is moderate, with the national health system tending to be free. The private healthcare sector is well developed and is known for the quality of its services, with affordable health insurance options available for all budgets. The insurance companies Fidelidade/Multicare, Médis and Generali stand out.
Leisure: Leisure is diverse and for all budgets. From beaches, museums, concerts, to free cultural events, there is always something to do. Municipalities actively promote cultural shows at low prices or even free of charge. Portugal is one of the European countries where the most musical festivals and concerts take place, mainly modern music.

The cost of living in Portugal allows for a high quality of life, keeping expenses under control. This is one of the reasons why many foreigners choose Portugal to live, work or retire.

Testimonials

If you want to buy a house and live in Portugal, but are undecided, there is nothing like knowing the testimony of some of the celebrities who left famous cities around the world for Lisbon, Porto, Algarve, Ericeira, Comporta , etc. They are English, Brazilians, Spanish, Americans, Australians, Italians, Germans and countless other nationalities who see Portugal not only as a tourist destination, but also as a place for a second or first home. You can see a more complete version of the celebrities who chose Portugal to live on this page .

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Sharon Stone , the American actress, is building a house in Melides in 2023, on land that cost 10 million euros, a project sponsored by Hollywood star George Clooney, one of the shareholders. Sharon Stone is not given to major interviews and tries to preserve her private life, but her connection with Portugal does not go unnoticed. In 2014, the famous actress was seen in Beverly Hills wearing a filigree pendant with a heart, one of the most iconic pieces of Portuguese jewelry. This year, she came to Portugal at the invitation of Douro Azul to be the godmother of the boat "Amo a Vida" and celebrate the company's 20th anniversary.
Nicole Kidman , the Australian actress and producer, and her husband, musician Keith Urban, purchased an apartment in Parque das Nações, Lisbon, overlooking the Tagus and the Vasco da Gama bridge, for around 4 million euros. The actress exchanged her investment in Monaco and a skyscraper in Manhattan for an apartment in Lisbon. She's delighted with the view of Barreiro, but... “ I only had 14 dollars left and I had to sell the house in Santa Monica and agree to present 'Dear, I changed the house' for 10 years, but it was worth it because I'm going to be a neighbor from Gil da Expo ,” the actress told a reporter.
Scarlett Johansson , the 38-year-old American singer and actress, purchased a T3 in Príncipe Real, in Lisbon, for €1.5 million. Situated in a historic building from the 19th century, the apartment has been completely renovated. Lisbon now joins Los Angeles and New York as her favorite cities to live with her two daughters. " When I came here for the first time I felt something that I can't explain ", " There is a certain shyness in Portugal that I really like. I'm shy too. When I meet Portuguese people, in restaurants or something, they never ask me to take photos or autographs "
Monica Bellucci , the stunning Italian film actress, fell in love with Lisbon and purchased an apartment in Alfama overlooking the Tagus. "When I came here for the first time I felt something that I can't explain.", "When I meet Portuguese people, in restaurants or something, they never ask me to take photos or autographs" , "The people are very sweet and friendly. ...all We speak a lot of languages... it's very easy to communicate with the Portuguese." , "The food is very good! The fish is very fresh. There are excellent restaurants all over the city... I love cuisine that includes garlic, so I get along very well with Portuguese food."
John Malkovich was one of the first celebrities to choose Portugal to live and invest, more than 15 years ago. He bought a property in Lisbon, opened the Bica do Sapato restaurant and bought the Lux Frágil nightclub. "I immediately loved Lisbon, everything is very beautiful and the people are excellent, it's a feast for the eyes" "Lisbon is unique, the panorama is beautiful, the architecture and its diversity... the colors, the landscapes with the hills, Tagus... is a very cultural city... the food is great." "I love Fado and Amália Rodrigues". "I like the restaurants, walking around the city, going to Alfama by tram... there is a lot to do in Lisbon" .
Isabelle Adjani , the actress, known for her participation in the film "L'histoire d'Adèle H.", spends long periods of time in her apartment in Carcavelos , in Quinta de São Gonçalo, on the outskirts of Lisbon. The decision to exchange Paris for Lisbon has to do with the desire to live in a place where it is less recognized. For the French actress, now 66 years old, Portugal provides her with the comfort of anonymity that her current, calmer and more holistic phase of life requires. "A beautiful city, of which I have good romantic and artistic memories.”
Michael Fassbender , the German film actor and director of films such as "X-Men: First Class", "Prometheus" or "Steve Jobs" and his wife Alicia Vikander , the Swedish actress and dancer, famous for playing the role of Lara Croft in the film "Tomb Raider", they chose Lisbon to live. They purchased a luxurious duplex in Alfama that cost around 2 million euros. "The weather is obviously a little better than in Switzerland and Ireland. It's a smaller city, but the people are very friendly. In 25 minutes we can be at the beach, or we can go skateboarding with the kids or go surfing. It's A very family oriented place"
Cristiano Ronaldo, being Portuguese, has promoted Portugal as his favorite destination to live. He owns a mansion in Madeira , acquired the most expensive apartment in Lisbon and is preparing to move to a luxury mansion in Quinta da Marinha, Cascais. " It's a country where I want to live, in a few years. I have no doubt that we will want to live in Portugal" , " No matter how far the world we travel, it is always in Portugal that my family and I feel at home. The climate fantastic, the wonderful food, the affection of the Portuguese, it’s always a pleasure to return to my country”
Garrett McNamara , the famous North American surfing champion, has a home in the Sintra region, and his time is shared between Hawaii and Portugal. He became known worldwide for the double record he achieved by surfing the biggest wave ever (30m) at Praia do Norte, in Nazaré. His passion for Portugal grew, and it was here that he got married in 2012. "I feel very grateful, proud and honored for all the support I receive, because I love Portugal", "I never thought I would be as loved as I am in Portugal" , "They say I'm the adopted son of Portugal and I feel blessed to be here."
Eric Cantona , the former Manchester United footballer and current actor, fell in love with the Portuguese capital, which he calls the "Rio de Janeiro of Europe". He currently lives with his family in a rented apartment, valued at three million euros, on Rua de São Mamede, in Príncipe Real . In 2017, 3 years after moving to Lisbon, he challenged coach Alex Ferguson and, together, they purchased 7 luxury apartments (T1, T2 and T3) at Torel Palace Residences, valued at 3.9 million euros. "Lisbon was a true discovery. And it continues to be. It is an inspiring city with a very strong energy. I am truly in love with it" .
Gisele Bündchen , the famous model, and her husband Tom Brady, bought a house on the Alentejo coast, in Melides near , having since divorced in 2021. Gisele Caroline Bündchen is a Brazilian supermodel, philanthropist, environmental activist and businesswoman and one of the highest paid models in the world. world. In 2007, she became the 16th richest woman in the entertainment sector. " Gisele Bündchen says she loves Portugal because it is a beautiful, peaceful and welcoming country. She also praises Portuguese food, especially the fresh fish and olive oil. "
Christian Louboutin , the well-known French designer of the famous "red-soled shoes", acquired a luxury apartment in Alfama and a farm on Comporta beach. "I love Portugal because I love the Portuguese. It's not possible to like a country without liking its people. I'm Breton, I was born on the coast and I found the same thing here, but with better weather" , "I've always loved gardens and there's something about Portuguese gardens, They are some of the most beautiful in the world. I also love tiles, so it's a country made to measure for me", " The people are very friendly and I feel more and more comfortable here. I'm at peace when I'm designing here... and the food is great "
Nick Youngquest , the Australian model, and Luma Grothe , the Brazilian model, are the couple who love two of Paco Rabanne's perfumes and exchanged Paris for the tranquility of Ericeira , the 1st Surfing Reserve in Europe and the 2nd in the World. Nick is often seen at Praia dos Pescadores, attracted by the quality of the waves on the West Coast of Lisbon, located just 35 km away.
Madonna , one of the most famous singers who surrendered to Portuguese culture, moved to Lisbon with her family, where she rented an apartment and later moved to a palace on Rua das Janelas Verdes. He ended up ending his adventure in Portugal in 2020, but in the meantime returned to Portugal in 2023, to celebrate his 65th birthday in Lisbon. Despite her troubled past with the Lisbon city council Maddona has good things to say about Portugal, especially because she learned to speak the Portuguese language: "I love driving around Lisbon and listening to music from everywhere: Fado, samba, reggaeton, dance hall... It's incredible" , " My new album is a love letter to you, Portugal, and your beautiful culture ".
Bonnie Tyler , the famous singer, known for the hit "Total Eclipse of The Heart", owns a large property and a yacht in Albufeira, Algarve, where she enjoys holidays with her family. Today, at 72 years old and still in business, he says that of all his properties around the world, it is in Portugal that he has his favorite refuge. In the Algarve, his passion since 1977, he lived through the pandemic period, enjoying moments of serenity and rediscovering the little things, such as learning to swim and enjoying the beaches, gastronomy and Portuguese wine. "I have several properties around the world, but Portugal is, without a doubt, my favorite place. I never get tired of being here. I often tell my Portuguese friends that they are blessed to have been born in Portugal. It's one of the most beautiful countries in the world."
Ronan Keatonn , the famous 46-year-old Irish singer, songwriter, musician and philanthropist, bought a house in Quinta do Lago, in the Algarve, more than twenty years ago. He became famous for the hit musical "When You Say Nothing At All", which was popularized by the film "Notting Hill". To date, he has sold 20 million solo albums around the world, a number in addition to the 70 million sold while he was part of the band Boyzone. Ronan frequently visits his holiday home in the Algarve to rest and enjoy the sun, sea and restaurants in the region.
Philippe Starck , the most famous architect and designer in the world, moved to Portugal 6 years ago, where he rented a house in Cascais belonging to the Countess of Monte Real. He also has a second home in Alentejo, in Grândola. " the Portuguese are the kindest people in the world” , “Portugal is the best place in Europe to be because of the Portuguese” .