Buying Property in Portugal: Expert Guide
Reviewed by Gonçalo Roxo, Co-founder of Your Property Advisor (Portugal) 
The Portuguese real estate landscape continues to evolve, meaning purchasing property can pose challenges for foreigners.
“Portugal is sometimes referred to as the California of Europe for several reasons.” Says Eric Finnas Dahlstrom, CEO of JamesEdition in our 2024 The Edition market report. “Facing the ocean with impressive, long sand dunes that stretch as far as the eye can see, Portugal has attracted tech talent for many years, who have settled in Lisbon and the neighboring areas, such as Cascais and Estoril.”
“After some recent changes in their tax regimes dampened the demand from overseas buyers, we are once again seeing a rebound in 2024 as the area continues to be one of the European favorites of global HNWIs”.
We outlined recent legislative changes in our Portugal Market report; in this article, we delve deeper into the buying process.
Buying Property in Portugal: The Expert Outlook
As a global marketplace for international real estate with over 65,000 homes for sale in Portugal, JamesEdition collaborates with local professionals to analyze market dynamics.
With that in mind, we partnered with Your Property Advisor (YPA), experts in the Portuguese real estate sector. As part of that, we spoke to Co-Founder Gonçalo Roxo, drawing on his 10+ years of experience and knowledge.
From obtaining a Portuguese tax number and exploring mortgage options to conducting due diligence and signing the final deed, Roxo helped us to explore the key stages of the property-buying journey and essential questions to keep in mind.
Gonçalo RoxoCo-founder of Your Property Advisor (Portugal)Your Property Advisor is a real estate consultancy that sells properties without maintaining a portfolio. This approach gives us the freedom to search for all available properties across Portuguese territory, providing a significant advantage for buyers. In a continuously expanding ‘seller’s’ market, a real estate consultancy that seeks to protect buyers' interests serves as a valuable solution to meet market needs.
1. Obtaining a Tax Identification Number
To purchase a property in Portugal as a native or non-resident, it’s necessary to have a Portuguese tax identification number (NIF – Número de Identificação Fiscal), which can be obtained at the tax office. This requirement applies to individuals and companies.
2. Opening a Bank Account
Typically, the documents required to open a bank account in Portugal include:
- Passport or national ID card
- Portuguese tax number (NIF – Número de Identificação Fiscal)
- Proof of address (in your home country and any Portuguese address if applicable)
- Proof of employment or income – for example, a payslip or job contract
- Application form provided by the bank
In some cases, and depending on the bank’s rules, you can open a Portuguese bank account from abroad. With the right legal preparations such as a power of attorney, you can appoint someone to open the account on your behalf.
Each bank has its own policies and procedures, and these may change. As a result, we recommend contacting the bank directly or consulting a professional for the most accurate and personalized advice.
Alternatively, you’ll need to visit the bank in person once you arrive in Portugal to finalize the account opening process, sign documents, and receive tools like a debit card and online access”.
Major banks in Portugal like Caixa Geral de Depósitos often provide services in multiple languages and have experience dealing with foreign clients.
3. Engaging with a Lawyer
It’s advisable to engage a real estate lawyer from the start of the buying process, because you’ll need to analyze key property documents – title, land and energy registry certificates, habitation license, etc.
4. Property Reservation
When a person finds the home for them, the first phase is reservation – a simple one-page document that needs to be signed by the buyer and seller, along with payment of a fee by the purchaser, which can range from €5,000 to €20,000.
The main goal is getting the property off the market and preventing other parties from making higher offers. This step isn’t mandatory, and it’s possible to go straight to the next phase.
5. Promissory Contract of Sale & Purchase
After the main documents have been checked, it’s time to move to the promissory sale and purchase contract. This covers the important points of the sale and a complete review of the property – closing price, information regarding the buyer and seller, what’s included in the purchase (for example, furniture), payment terms, and other conditions.
6. Due Diligence
During this phase, you and/or your legal representative review the essential documents, including:
- Title certificate (certidão do registo predial): Confirms the legal owner and checks for encumbrances or liens.
- Tax document (caderneta predial): Verifies the property’s tax status and registered information.
- Housing license (licença de habitação): Ensures the dwelling is legally habitable.
- Energy certificate: Required by law to evaluate the home’s efficiency.
- Technical housing file (ficha técnica de habitação): Details the residence’s construction and materials.
7. Final Deed & Payment
On the date stipulated in the promissory contract (usually within a couple of months) and after all information is reviewed and agreed upon, the final deed is signed in front of a Portuguese notary.
The buyer then pays the remaining balance plus the purchase tax (IMT) and receives the keys to their new home.
Full Cost of Buying Property
Purchasing real estate in Portugal incurs additional costs beyond the purchase price, ranging from 6% to 10% of the property value. Below is a breakdown of the key expenses.
- Municipal tax over real estate transactions (IMT): 1% to 8%, depending on various factors. For a €250,000 home, expect to pay around €8,415.
- Stamp duty (imposto do selo): 0.8%, amounting to €2,000 for a €250,000 property.
- Annual municipal tax over real estate (IMI): 0.3% to 0.8% of the dwelling’s taxable value.
- Property registration fee: Typically €375 using the Casa Pronta service.
- Bank fees (if taking out a loan): Approximately €1,000 for valuation and processing.
- Stamp duty over loan: 0.6% of the loan amount.
- Mortgage registration fee: €375 using Casa Pronta (if getting a mortgage)
- Life and multi-risk insurance: Costs vary based on several factors.
For more information, browse our detailed article about property taxes in Portugal.
Can Foreigners Buy a Property in Portugal?
There are no restrictions on foreigners buying property in Portugal: EU and non-EU citizens can freely purchase real estate, though non-EU people need a visa or permit to live in Portugal.
Locations for Expats
Regions like Lisbon, Cascais, Estoril, Comporta, Sintra, the Algarve, Madeira, and the Silver Coast continue to attract many people. These ever-popular destinations are sought-after for their high quality of living, proximity to nature and the ocean, and the opportunity to enjoy local culture.
For data on top locations, take a look at our guide: Price Report 2024: How Much Does a House Cost in Portugal? Best Places to Buy.
Mortgage Options for Foreigners
Portugal offers mortgage choices for non-natives, whether buying a home or investing from abroad. Details depend on your residency status and the purpose of your purchase, with homeownership rates at about 78%, indicating accessible options.
Interest rates vary widely from 1% to 8%, influenced by factors like property value and financial history. Consulting with banks or a broker is advisable to navigate the process effectively.
Explore the buying process with our expert guides to Portugal real estate:
