Portugal is home to many ex-pats, digital nomads, and business people. They choose to live in Portugal because of the many amenities the country provides. These include stability in the economy and politics, a quality lifestyle, and a low cost of living.
The rate of homeowners in Portugal makes up around 75 per cent of the total population. Besides the factors above, the affordability of the real estate market is the reason for this high rate. Lisbon is an example of this with its affordable market. Compared to other Western European countries, it offers more affordable houses.
Foreigners also choose to reside in Portugal due to its beautiful coast and favourable climate. Portugal offers both a tranquil lifestyle in the rural as well as a city life in the centre.
The government of Portugal encourages foreign investors to buy real estate in Portugal. The Golden Visa program in Portugal is the most popular way to do this. It aims to provide residency for investors in return for a qualified investment. Besides residency, it also offers the right to work, live and study in Portugal. Furthermore, you’ll have visa-free access to the Schengen countries.
The main steps to buying property in Portugal are as follows:
- You first need to get a Portuguese tax number (NIF). You can obtain it from any local tax office
- You can then visit properties and decide on one of them that suits you
- Mortgage can be an option at this step. If you plan to take out a mortgage, you’ll decide on the best mortgage option
- Negotiation or bargaining is possible before you negotiate on the last price
- Following the agreement on the price, you’ll make a down payment
- At this point, signing a pre-sale-purchase contract is advisable. It’s known as CPCV (Contrato-Promessa De Compra e Venda)
- Finally, you’ll sign and notarize the property deed or Escritura Publica de Compra e Venda.
To sign the sales contract, you’ll need the following documents as well:
- A photo ID
- CPCV (Contrato-Promessa De Compra e Venda)
- Property’s energy certificate
- Payment of the stamp (Imposto de Selo), and
- Land register (Caderneta Predial).
Certain taxes and fees are also required while buying a property. The first one is the IMT (Imposto Municipal Sobre Transmissões) transfer tax. Its rate depends on the cost of your home. If the property is a second or third home, the tax will be higher. Notary and land registry fees are other expenses. Usually, they cost from 0.2 per cent to 1.2 per cent of the property value. Another one is stamp duty. It costs around 0.8 per cent of the property value.
Consulting a real estate agent (Inmobiliaria in Portuguese) will prove useful before buying a house in Portugal. It will save you both time and money. An experienced agent will make this process easier. Note that they need to have a license number acquired by the Portuguese Association of Real Estate agents.
Let’s now look at some of the popular destinations you can buy property in.
Lisbon is regarded as one of the cheapest capitals in Europe. Especially investors and expats prefer to buy property in Lisbon. It has become an international business hub for many startups and tech companies. Property prices in destinations like Avenida da Liberdade, Lapa, and Baixa Chiado have increased considerably. Cheaper options are available in more inland areas like Amadora and Benfica. Cascais and Estoril are other cheaper options preferred by young professionals. They are around 35 minutes away from Lisbon, and they’re coastal towns.
Porto is another coastal city looking over the Atlantic and offering some first-class beachfront property. You can find various properties here. Foz Douro neighbourhood, for example, offers great beachfront properties. For commercial properties, you can look at the Ribeira neighbourhood.
Another destination between Lisbon and Porto is the Silver Coast. It offers pristine beaches as well as properties. Areas like Tomar, Peniche, Obidos, or Nazare are favourable choices cheaper than the Algarve.
The Golden Coast in the Algarve offers various types of properties. You can find apartments, luxury houses, and villas offering an ocean view. In places like Lagos and Albufeira, prices are quite high. You can also choose rural areas like Alcoutim or Monchique. They offer cheaper properties.
There’s a variety of property options in Portugal, ranging from studio apartments to bigger houses. Getting used to some terms about properties can be useful before the purchase process:
- A Casa or a Moradia: A typical detached home
- A Casa Geminada: A semi-detached house
- Condomínios or condos: Individual apartment units sharing common areas
- Quintas: Classic rustic houses or farms. They’re typically available in the inland areas.
For more insights, please refer to Get Properties