Portugal’s real estate market has gained remarkable popularity over the years. Its safe lifestyle, European Union membership, and status as a European country make real estate investments very attractive to investors. For those wanting to buy property in Portugal, there are many property types catering to different needs and preferences. Until 2023, residency permits could be obtained through real estate purchases, but this investment option has been removed. You can find details on our Portugal Golden Visa page. In the rest of our article, we cover the process of buying a home in Portugal, prices, taxes, and things to consider. Enjoy reading!
Why Should You Buy Property in Portugal?
If you are looking for a high standard of living in Europe, Portugal is the right place for you. The advantages of buying property in Portugal include owning real estate in popular tourist areas and generating income through short- and long-term rentals. Lisbon, Porto, and the Algarve regions are particularly popular for their high rental yields. Legally residing in Portugal also offers opportunities such as free movement within the Schengen area and tax advantages.
What Are the Requirements to Buy a Home in Portugal? Can Turkish Citizens Buy Property in Portugal?
Turkish citizens can purchase property in Portugal. Portugal does not impose any legal restrictions on foreigners acquiring property. Therefore, citizens of the Republic of Turkey can also freely buy real estate such as houses, apartments, or villas.
Is It Possible to Buy Property Using a Mortgage?
It is possible to purchase a home in Portugal using a mortgage (housing loan). Portuguese banks offer loan facilities to foreign buyers for property purchases. In general, the conditions are as follows:
- Portuguese banks generally provide loans ranging from 60% to 80% of the property value.
- A down payment of at least 20% to 30% of the property value is required.
- Loan terms typically range between 25 and 30 years.
- Fixed and variable interest rate options are available. Variable-rate loans are generally based on the EURIBOR (European Central Bank reference interest rate) index.
Portugal Real Estate Market & Home Prices
Housing prices in coastal cities and major metropolises in Portugal range between an average of 3,000 € and 5,000 € per square meter. Rental yields generally range from 4% to 7%. The table below shows the average sales price and monthly rental income for a 120 m² home in key Portuguese cities:
| City | 120 m² Home Price (€) | Monthly Rental Income (€) |
|---|---|---|
| Lisbon | 480,000 | 1,800 – 2,200 |
| Porto | 390,000 | 1,400 – 1,800 |
| Faro (Algarve) | 350,000 | 1,200 – 1,600 |
| Coimbra | 260,000 | 850 – 1,100 |
| Braga | 240,000 | 800 – 1,000 |
| Setúbal | 220,000 | 750 – 950 |
Where to Buy Property in Portugal?
For those considering buying property in Portugal, major cities like Lisbon and Porto stand out with strong rental yields, while cities like Coimbra and Braga offer more cost-effective investment opportunities. Meanwhile, the Algarve region is highly attractive in terms of vacation homes and tourism-oriented short-term rentals.
Lisbon
As the oldest capital of Portugal and Europe, Lisbon (Lisboa) is the country’s largest city and has the most expensive real estate market. Demand and popularity have increased over the years, offering high investment alternatives with rental yields between 5% and 8%. Square meter prices in the city center are around 4,000 – 7,000 €.
- Average m² price: 4,500 €
- Rental yield: 5%
Porto
Porto is Portugal’s second-largest city, located on the banks of the Douro River. Compared to Lisbon, Porto is a quieter and more livable city, offering a rich wine culture and an authentic lifestyle. The city’s economy relies on tourism, wine exports, technology startups, and the service sector. Neighborhoods like Baixa, Ribeira, and Cedofeita are popular tourist spots with many short-term rental apartments. Those seeking a more luxurious lifestyle and higher rental yields prefer Boavista and Foz do Douro.
- Average m² price: 3,500 €
- Rental yield: 5.5%
Faro (Algarve)
Faro, the capital of the Algarve region, is a major hub in the holiday home market. The city has high income potential, especially during the summer months when short-term rentals are intensive. Faro has become a popular tourism center particularly since the opening of Faro Airport, with luxury hotel complexes and golf courses continuing to attract visitors.
- Average m² price: 3,200 €
- Rental yield: 6%
Leiria
Leiria is a historic city located between Porto and Lisbon, making it an ideal location for investors looking for a peaceful and rural lifestyle. Blending historic castles with picturesque streets, this charming city offers many homes under 100,000 €. Average prices per square meter range between 1,600 € and 2,000 €. Leiria has high potential to capture a share of the domestic market and is a preferred option for families and retirees.
- Average m² price: ~1,600 €/m²
- Rental yield: ~4.39%
Setúbal
Located south of Lisbon, Setúbal offers a vibrant coastal lifestyle. Property prices are around 85,000 €, while homes with ocean views sell for about 130,000 €. A short drive from the capital, Setúbal is an ideal destination for investors who want to spend their days relaxing on the beach and enjoying the sun.
- Average m² price: ~2,100 – 3,500 €/m²
- Rental yield: 5.9% – 6%
Guarda
If you want to wake up to breathtaking views every day, consider the Guarda Serra da Estrela region, home to Portugal’s largest and highest cities. Many homes sell for less than 50,000 €; some properties need restoration while others are well-maintained. This is an ideal choice for those looking for an affordable, budget-friendly home in Portugal.
- Average m² price: 700 – 1,416 €/m²
- Rental yield: 6.5% – 6.7%
Top 6 Most Affordable Regions to Buy Property in Portugal
Portugal offers many alternatives for those seeking budget-friendly real estate. Properties needing restoration can be found in central locations or towns. Many investors prefer regions where low-budget repairs and maintenance work can make homes livable or ready for rent. These regions are:
- Leiria
- Guarda
- Algarve
- Castelo Branco (Castelo)
- Madeira
- Setúbal
How to Buy Real Estate in Portugal?
If you want to buy a home in Portugal, you don’t have to navigate the complex details entirely on your own. From obtaining a tax number to signing the final deed, our experienced partners professionally manage the entire process on your behalf, ensuring your move and investment are completed safely and without surprises.
- Share your dreams and desires with our GVS partners first. The clarity of your demands will determine every detail of your journey to your dream home. Do you prefer a small town, a coastal area, a rural setting, or city life?
- Share your price range, limits, and budget with the expert. This will narrow down your search results to properties matching your criteria. Focusing on homes that suit you is essential.
- Define your purpose: Why are you buying a home in Portugal? Is it for living, retirement planning, a holiday home, or a long-term investment property to preserve value through rental income?
- Determine your expectations from a home: Do you want two or three bedrooms, two or three bathrooms, a garden, or a room for children? Would you like a terrace, a pool area, a private garage, or space for your pets to move freely? Knowing these factors in advance saves time and helps you find the right home.
- Obtain a tax identification number (número de identificação fiscal – NIF), which is required to buy property, open a bank account, sign contracts, pay bills, or perform any other transaction in Portugal.
- If you are in Portugal, you can apply to a local tax office with your passport and address documents. If you are abroad, a lawyer or tax representative can handle the necessary procedures on your behalf. While managing all legal procedures, our partners provide virtual tours, detailed video tours, photos, floor plans, and real estate reports to keep you informed.
- After choosing your home, you will make an offer. If necessary, pre-approval and proof of funds will be provided.
- GSV partners will check legal details, title deeds, licenses, planning information, contracts, and whether there are any debts or legal issues related to the property.
- The final deed-signing process is called “Escritura,” and all parties are present at the notary. Official transfer of ownership from seller to buyer occurs upon signing the deed, making you a homeowner in Portugal.
- For the purchase to be fully finalized, the property must be registered in your name. At this stage, your lawyer submits the necessary documents to the land registry office and tax office. Once official records are updated, you are recorded as the legal owner of the property.
Popular Portugal Real Estate Websites
For those searching for homes in Portugal, here are some popular real estate platforms frequently preferred by locals:
- Idealista.pt: One of Portugal’s largest and most comprehensive real estate platforms. It offers many property types such as residential, commercial, land, and holiday homes under one roof. It is user-friendly with detailed filtering features and map search functionality. English language support is also available.
- Imovirtual.com: Features residential and commercial properties for rent and sale across Portugal with a modern and simple interface. It has strong listing density in major cities like Lisbon, Porto, and the Algarve, and is widely used.
- Casa.sapo.pt: Another major platform actively used by real estate agents in Portugal. It offers a wide portfolio in residential, land, and commercial property categories, and also lists new projects and under-construction homes.
- Remax.pt: The official real estate website of the world-renowned REMAX network’s Portugal branch. Recommended for investors looking to receive quality consulting services and make purchases with corporate assurance.
- Century21.pt: The Portuguese arm of the international real estate chain Century 21. It offers a wide portfolio in both urban and coastal regions, with English listing options available, making it particularly suitable for foreign buyers.
Documents Required to Buy a Home in Portugal
The documents required when purchasing property in Portugal are important for ensuring that both the legal process and the deed transfer are completed smoothly. Our partners, who are well-versed in local legal processes, obtain the relevant documents for you:
- NIF – Tax Number
- Valid Passport or ID Document
- Portuguese Bank Account Details
- Promissory Purchase and Sale Agreement (Contrato de Promessa de Compra e Venda)
- Energy Certificate (Certificado Energético)
- Title Deed and Cadastre Documents
- Debt-Free Certificate (Declaração de Dívida)
- Notarized Public Sales Agreement (Escritura Pública)
How Much is Property Tax?
Property tax in Portugal can vary depending on the type, value, and intended use of the property. Details for IMI (Imposto Municipal sobre Imóveis), IMT (Imposto Municipal sobre Transmissões Onerosas de Imóveis), and AIMI (Adicional ao IMI) taxes are as follows:
IMI (Municipal Property Tax)
IMI is an annual municipal property tax that property owners must pay in Portugal. IMI tax is calculated based on the property’s tax value (Valor Patrimonial Tributário – VPT), determined by factors such as property features, location, and age. Tax rates vary depending on the property type and municipality:
- For urban properties: Ranges between 0.3% and 0.45%.
- For rural properties: Applied at a rate of 0.8%.
IMT (Property Transfer Tax)
IMT is a one-time tax paid when purchasing a property in Portugal. It is paid during the purchase transaction and must generally be completed before notary procedures. The tax rate depends on the property type, value, and the buyer’s intention (e.g., whether bought as a primary residence or for investment):
- For primary residence purchases: Rates range from 0% to 6%.
- For secondary residence or investment purchases: Rates range from 1% to 8%.
- For commercial properties: A fixed tax rate of 6.5% is applied.
AIMI (Additional Tax for High-Value Properties)
AIMI is an additional property tax applied to high-value property owners. It is calculated over the total tax value of properties and paid annually. This tax comes into play when the total property value exceeds certain thresholds:
- For individuals: If the total property value exceeds 600,000 €, an AIMI of 0.7% is applied. If the property value exceeds 1,000,000 €, a 1% rate is paid.
- For companies: 0.4% AIMI is applied over the total property value.
Exemptions and Exceptions:
- Temporary IMI exemption: A three-year temporary exemption can be granted if gross annual household income is equal to or less than 153,300 € and the property’s tax value does not exceed 125,000 €.
- Permanent IMI exemption: Can be applied if the household’s annual gross income is equal to or less than 2.3 times the annual value of the Social Support Index (IAS), and the total value of the household’s property does not exceed ten times the annual value of the IAS.
- Properties in historic or rehabilitation areas: Exemptions are also available for buildings constructed over 30 years ago or located in Urban Rehabilitation Areas.
Taxes and Additional Costs
When purchasing real estate in Portugal, not only the home purchase price but also certain taxes and official fees must be taken into account. IMT (purchase tax) and stamp duty are the primary items affecting total cost. The IMT rate can vary between 0% and 8% depending on the property type and purpose of use. The annual IMI (property tax) ranges between 0.3% and 0.45% depending on property value and is paid annually after ownership. VAT only applies to commercial or some newly constructed projects.
- IMT – Property Purchase Tax (6%): 15,000 €
- Stamp Duty (0.8%): 2,000 €
- Notary and Land Registry Fees: 1,200 €
- Lawyer/Consultant Fee (estimated): 10,000 €
Total Additional Cost: 28,200 €
Does Buying a Home in Portugal Grant Citizenship?
It is no longer possible to obtain a residency permit or citizenship solely by purchasing property in Portugal. The Golden Visa program is still active; however, investment criteria have changed. Real estate investment is no longer evaluated under this program. You can find detailed information about current investment options and the application process on our Portugal Golden Visa page and contact our expert partners for support on the best solution for you.
