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Buying a House in Portugal

8 de July, 2022

Buying a House in Portugal

Buy house in portugal
Reading: 13 min

Doubts at the time of buying a house exist in any circumstance, but when it comes to purchasing a property abroad, they can be even more intimidating. Whether it’s in relation to documentation or the forms of payment, buying a house in Portugal may be easier than you think.

In this article we will solve all the doubts and help you to make the best decision for the purchase of a property in the country, check it out.

How can a foreigner buy a house in Portugal?

Buying a house in the country is one of the first thoughts of those who intend to live in Portugal. The good news is that it may be simpler than it seems at first.

There are few differences in buying the house by a foreigner or a Portuguese, the process, in general, is quite similar. The main difference may be in the financing, if this is an option, since there may not be a relationship as an account holder in a Portuguese bank, which makes the search start from scratch.

Below we present a step by step guide on how to buy a house in Portugal, check it out:

1. Define what you are looking for

The first step in buying a house in Portugal is to define what you are looking for in the property. At this point, you should think about both the aspect of the property, such as number of bedrooms, location and state of conservation of the house. But you should also cover the financial aspect, what will be the budget for the property, i.e. how much you have available to buy a house.

2. Start the house search

Looking for a property can be a bit of a laborious process, especially if you are still living abroad. There are a few ways to search for a property, the most traditional, of course, is through a real estate agent, with more personalized service, the broker can help you find the ideal house, with the characteristics that you want.

But don’t limit your search to the realtor, in Portugal there are good real estate websites, both for renting and buying, where you can find good opportunities. In some of these sites, there are even ads from the real estate agencies themselves and many have a video presentation in addition to photos.

3. Visit

visit to the property is essential for a successful purchase. At this time take the opportunity to observe the region, whether for investment or to live, the location of the property is important.

At the property, make a thorough visit, take a good look at the building, the state of conservation and possible problems. Some problems are common in real estate in Portugal, such as mold – especially in winter – so take a good look at the walls and closets for possible problems.

4. Close the conditions

The purchase conditions may vary a lot and a good negotiation can make all the difference. At this moment, the broker can be a good assistant in the process of defining the conditions.

5. Preparing documentation

Before starting the process of searching for a property, it is good to check the documents required for the purchase. Thus, at the time of the negotiation, having the documentation prepared makes the progress of the negotiations much easier. Below we will present in detail what they are, between personal and financial documentation, it is good to have everything in order before starting.

In this step also include the purchase and sale contract, essential to make official the conditions of purchase and the details of the transaction.

6. Transferring money or applying for finance

The payment of the property is one of the stages that generates the most doubt in buyers. What is the best way to transfer money to Portugal to buy property? Is it possible to finance being a foreigner? There are many doubts, but the transaction is simple and can be cheaper via digital platforms. You just need to plan properly to check the transaction limits.

7. Doing the deed

Negotiation concluded, payment defined, it’s time to pass the property documentation to your name. When the payment is made directly with the seller, both parties need only be present for the signature. In the case of financing, the presence of a bank representative is necessary.

Real estate agent presents financing conditions
Financing when buying a house in Portugal can be an excellent option and with fixed interest rates.

Once the deed is signed, the property is registered in your name and that’s it, the house is officially yours!

How much does a house cost in Portugal, on average?

It varies a lot, you can find houses from 50 thousand euros to more than 2 million euros. The prices to buy a house in Portugal will depend on several factors, from the city where you want to buy the property, to the size and state of conservation of the property.

On December 12, 2022, we conducted a search on Imovirtual, for properties with the typology T2, i.e. with two bedrooms, up to 70 m² in different parishes (neighborhoods) of the main cities in Portugal.

All the properties are in good condition and many of them are already furnished and ready to be lived in. The prices vary a lot from one city to another, but being in Porto and Lisbon the properties are more expensive.

According to the house price evolution report, developed by Idealista, in November 2022, the value of the square meter for sale in Lisbon – considering the city and not the district – closed at 5,145€, while in Porto – also considering the city and not the district – closed at 3,188€.

As you can see, the square footage in Lisbon is much more expensive than in other cities. In some situations, it is possible to buy a larger and more comfortable property in smaller cities, or even in cities near Lisbon, for the same price as a small apartment in the capital.

Lisbon

ParishPrice
Alvalade296,000 to 1,255,000 euros
Star160,000 to 1,350,000 euros
Camp Oiapoque155,000 to 520,000 euros
Mercy195,000 to 895,000 euros
Park of Nations214,000 to 369,000 euros
Saint Anthony265,000 to 1,050,000 euros
Santa Maria Maior160,000 to 990,000 euros

Also check out where and how to find luxury homes for sale in Lisbon.

Porto

ParishPrice
Aldoar, Foz do Douro and Nevogilde138,000 to 725,000 euros
Bonfim159,000 to 540,000 euros
Campanhã75,000 to 275,000 euros
Cedofeita, Santo Ildefonso, Sé, Miragaia, São Nicolau and Vitória135,000 to 600,000 euros
Paranhos65,000 to 280,000 euros

Faro

Council/ ParishPrice
Faro – Sé and São Pedro120,000 to 364,000 euros
Albufeira – Albufeira and Olhos de Água125,000 to 640,000 euros
Portimão – Portimão106,000 to 453 thousand euros

Braga

ParishPrice
Maximinos, Sé and Cividade135,000 to 300,000 euros
Saint Victor215,000 to 280,000 euros
São José de São Lárzaro and São João do Souto128,000 to 220,000 euros

Where to find houses to buy in Portugal?

The internet has made the process of searching for a property much easier, especially when the purchase is in another country. Among the Portuguese sites for buying property, the ones that stand out most are Imovirtual and Casa Sapo.

In both sites you can filter by city, price and other characteristics of the property. With ads that are always up to date, both concentrate publications from both owners and real estate agents, so it is possible to find a wide offer of properties and select according to your objectives.

Houses in Porto, Portugal.
Scheduling a visit before buying a house in Portugal is of utmost importance to avoid unpleasant surprises with the property.

Among the estate agents, the two main ones operating throughout the country are Remax and Era. You can also search their websites and find updated property ads throughout the country. As they are the largest in the country, you will find a wide range of properties for sale and, if you prefer, you can count on a more personalised service from the brokers.

What are houses like in Portugal?

It is worth paying attention to some curiosities about the houses in Portugal, because they are a little different from Brazil, both in terms of architecture and functionality. Check some of them out before buying a house in Portugal.

Window on one side only

It is common for flats in Portugal to have only one side with windows (unless they are corner flats). Most buildings are built next to each other, so there are windows on only one side.

Protection against cold

Another difference is in the preparation of the houses for the cold. In Portugal, many houses have double-glazed windows, which help reduce heat loss in the property, in winter this feature is essential. As well as the heating system, nowadays many houses have dual function air conditioners, which heat and cool the environment.

Bathroom without window

Don’t be alarmed if you find windowless bathrooms. When I mentioned that the houses have only one front you can understand a little bit about it, who would want to lose natural light space with a bathroom? Thus, it is common for bathrooms to have exhaust fan systems, which remove condensation from the hot water. A quality exhaust fan is essential, especially to avoid the mold that accompanies moisture.

Here are a few home precautions in Portugal that you need to be aware of when buying a property in the country.

Nomenclature

But there is still a fundamental difference in the nomenclature, the houses and flats are named by typology, that is, you will find properties with the designation T accompanied by a number.

This number in question is the number of rooms, so there are T1, T2, T3, etc. A T0 corresponds to a studio in Brazil. A T1+1 corresponds to a one-bedroom apartment, plus a room that can be made into a bedroom, but probably doesn’t have a window (that difference we talked about before).

How does property financing work in Portugal?

Financing your property in Portugal is a good opportunity for those who want to buy.

If you intend to get a mortgage to buy a house in Portugal, the first step is to look for a bank. There are large banking institutions in the country, so make a simulation on the website of the chosen bank and check the conditions. The credit analysis varies a lot from one bank to another, so it is good to research the institutions calmly enough to choose the one that offers the best conditions for you.

Is it possible to buy a house in Portugal while living abroad?

Yes, it is possible to buy a house in Portugal while still living in another country, but you will need a professional in the country to intermediate the process. One of the requirements to buy a house in Portugal is to have the Fiscal Identification Number (NIF).

Be careful when buying a property at a distance, if possible visit it before concluding the purchase, it is a high investment and not knowing it personally can be risky. Therefore, plan ahead and visit Portugal and the property before finalizing the negotiation.

What is needed to buy a house in Portugal?

The first essential item to buy a property in Portugal is the Tax Identification Number, the NIF, which we mentioned earlier. This document is essential to be able to perform the transaction in the country. To request the NIF you must go to the Finance Department in Portugal.

In addition, you must present your personal documentation, which can be your passport, if you do not yet have residence in the country. The residence permit in Portugal can also be used in the process, or the citizen card, for those with European citizenship.

You will also need to present proof of income, for the negotiation. If you are still abroad, you must submit your country’s tax return and other documents that help prove your income.

Other important documents for buying a house in Portugal

  • Land Registry Certificate: this is the certificate of content used to confirm the legitimacy of the owner and buyer;
  • Caderneta Predial: proving the current fiscal situation of the property (this document must be requested at the Finance Department);
  • Licença de Utilização: serves to state what will be the purpose of the property and should be requested at the local parish council;
  • Housing Technical File: describes all the technical characteristics of the property.

How to transfer money to Portugal to buy property?

There are many ways to send money to Portugal, but when it comes to large amounts for international remittances, there are bound to be many questions. Among the main ways are banks and digital platforms.

Among the platforms for sending international money, we especially recommend Remessa Online, which offers good sending conditions and low fees compared to other financial institutions.

Usually the platforms present limits for sending abroad, to raise the sending limit, you need to make the complete Remessa Online registration and prove your income. For example, if you sell a property in Brazil, you can send the proof to raise the limits and send a larger amount to Portugal.

Another digital platform worth checking out is Wise, which also provides good rate options for submissions of a higher amount and upon proof of income.

Finally, you can also send money abroad through the bank. In this case, you should check the conditions of the bank in which you have an account. But be aware, besides higher fees, the currency exchange rate may not be very favorable by the banking institutions.

Where to buy a house in Portugal?

Despite being a small country, Portugal is quite diverse, there are sunnier regions, such as the cities in the Algarve, colder and rainy regions, such as the North, more rural regions, such as the Alentejo, and more cosmopolitan regions, such as Lisbon. Therefore, it is necessary to evaluate well what you want when buying a house in Portugal.

One tip is to get to know the cities, that is, make a list of possible places where you would like to live and spend some time in Portugal to get to know them. This way, you can better delimit what you like and what is in the lifestyle you intend to lead in the country.

Real estate consultant for buying a house in Portugal
For those who plan to buy a house still in Brazil, a real estate consultant becomes indispensable.

In more touristy cities, like Porto and Lisbon, prices are higher, but in the outskirts of these cities, in the so-called metropolitan region, it is possible to buy good, bigger and better priced properties.

If the goal is to buy a property to invest in, the ideal is that it be in the big centers, either for short term rental or for residence, it is in the main cities that the great demands are and you can get a faster return on investment.

Discover 8 small cities to live well in Portugal.

Residence permit through the purchase of property in Portugal

Depending on the amount you intend to buy a house in Portugal and the location, it is possible to apply for a permanent residence visa or Golden Visa. Learn all about it in this article.

If you need help buying a house in Portugal, from finding the perfect house, finding the best financing solution or even monetizing the property, we recommend getting help from a specialized consultancy in the area. Atlantic Bridge can help you with that!

Is it worth buying a house in Portugal?

Yes, especially for those who want to finance.

In Portugal, real estate financing is very attractive, it is more worthwhile to buy a property than to rent. The monthly value of a mortgage is lower than that paid in rentals, which suffer from tourist pressure. In Portugal, many institutions offer fixed or mixed interest rates, in which it is possible to know the amount to be paid from the beginning to the end of the loan.

Cheap houses for sale in Portugal, do they still exist?

There are, but it is possible that you can only find a cheap property to live in the interior of Portugal. In the districts of Viseu, Vila Real, Beja – in Alentejo, among others, it is possible to find properties from 60 thousand euros considering a T2 of up to 70m². However, there is not much real estate on offer.

In Viseu, for example, we find apartments with these characteristics, between 61 and 150 thousand euros. In Évora, we find some completely finished properties that need an excellent renovation, in the range of 15 to 20 thousand euros, and some habitable apartments in the range of 90 to 180 thousand euros. In Vila Real, we find apartments ranging from 80 to 90 thousand euros.

But you should consider the quality of life and job opportunities in these regions, they are less developed and may not be the best investment.

Another possibility is to buy older properties in better regions, an old two bedroom flat, without any renovation, in Porto, can be bought for around 100 thousand euros. You will need to invest in the property and make good renovations, but it is a good opportunity.

Frequently asked questions about buying a house in Portugal

We have separated four very frequent doubts among our readers to answer them in a very simple way.

What are the taxes on buying a house in Portugal?

Paying taxes when buying a house in Portugal is common, just as it is in Brazil. The taxes in Portugal that are levied on this type of transaction are:

  • IMI – Municipal Property Tax, paid annually;
  • IMT – Municipal Tax on Onerous Transmissions of Real Estate, paid only on the purchase and on the value declared in the deed;
  • Stamp Duty is levied on all documents, contracts, titles, deeds, etc.

How to buy a house in Portugal from Brazil?

You have the option of using the specific websites for buying and selling real estate, as we talked about throughout the article, such as:

You can also search through real estate agencies and count on the help of a realtor. There is also the Chaves na Mão project, which can be of great help for those looking to buy a house in Portugal while in Brazil.

How to buy a house in Portugal?

You just need to have enough money to make the payment for the property. At the beginning of this article, we listed some documents that will be needed to buy a house in Portugal. You will need to present proof of where this money is coming from, as well as you will need to use sending platforms to send money to Portugal. Per Central Bank regulations, the platforms will ask you to submit your income tax return to verify that the money is legal.

Article by Lívia Tostes and Carolina Sanches, originally published on the EuroDicas website.

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Author:

Atlantic Bridge

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