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Buying a House in Portugal: How Much it Costs and Documents Needed

8 de July, 2022

Buying a House in Portugal: How Much it Costs and Documents Needed

Reading: 14 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 Brazilian buy a house in Portugal?

Buying a house in the country is one of the first thoughts of Brazilians 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 the purchase of the house by a Brazilian or 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 property aspect, such as number of bedrooms, location and state of conservation of the house. But it should also cover the financial aspect, what will be the budget for the property, in other words, 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 in Brazil. There are a few ways to search for a property, the most traditional, of course, is to look for a real estate agent, with a 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 property websites, both for renting and buying, where you can find good opportunities. In some of these sites, there are even advertisements from the real estate agents themselves.

3. Visit

The 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 mould – especially in winter – so take a good look at the walls and wardrobes 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 among buyers. What is the best way to transfer the money from Brazil to Portugal? Is it possible to finance being Brazilian? There are many doubts, but the transaction is simple and can be cheaper through the platforms. You just need to plan properly to check the limits of the transaction.

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.

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

Home key delivery after purchase
Financing can also be a good opportunity to buy a house in Portugal.

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 1 million euros. Prices to buy a house in Portugal will depend on several factors, from the city where you want to buy a property, to its size and state of conservation.

On May 08, 2022, we carried out a search on Imovirtual, for properties with 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 are ready to be inhabited. Prices vary greatly 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 April 2022, the value of the square meter for sale in Lisbon closed at 3,773€, while the one in Porto closed at 2,239€.

As can be seen, the square meters in Lisbon are much more expensive than in other cities. In some situations, it is possible to buy a larger and more comfortable property in smaller cities for the same price as a small flat in the capital.

Lisbon

ParishPrice
Alvalade315 to 995 thousand euros
Star210 to 50 thousand euros
Camp Oiapoque185 to 700 thousand euros
Mercy180 to 750 thousand euros
Park of Nations150 to 550 thousand euros
Saint Anthony230 to 600 thousand euros
Santa Maria Maior130,000 to 950,000 euros

If you are in doubt between renting or buying property in Lisbon, check out this guide that we have prepared to help you.

Porto

ParishPrice
Aldoar, Foz do Douro and Nevogilde200 to 700 thousand euros
Bonfim160 to 350 thousand euros
Campanhã150 to 320 thousand euros
Cedofeita, Santo Ildefonso, Sé, Miragaia, São Nicolau and Vitória160 to 550 thousand euros
Paranhos155 to 350 thousand euros

Faro

Council/ ParishPrice
Faro – Sé and São Pedro150 to 300 thousand euros
Albufeira – Albufeira and Olhos de Água125 to 680 thousand euros
Portimão – Portimão110 to 380 thousand 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 always updated, both concentrate publications both from owners and real estate agents, so it is possible to find a wide offer of properties and select according to your objectives.

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, as they are a little different from Brazil, both architecturally and in terms of functionality, which are very different.

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 conditioning, which heats and cools the environment.

Bathroom without window

Don’t be alarmed if you find bathrooms without windows. When I said that the houses have only one front you can understand a little bit the question, 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 extractor fan is essential, especially to avoid the mould that accompanies humidity.

Front of typical houses in Lagos, Algarve, Portugal
Assessing the condition of the property is important when buying a house in Portugal.

Here are some house care things you need to be aware of when buying a property in Portugal.

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 apartment. A T1+1 corresponds to a one-bedroom flat, plus a room that can be made into a bedroom, but probably has no window (that difference we talked about before).

How does property financing work in Portugal?

Financing property in Portugal is a good opportunity for those who want to buy. A Brazilian can get up to 70% financing for the property, that is, the rest must be paid as a down payment.

If you intend to make a loan to buy a house in Portugal, the first step is to look for a bank. There are large banking institutions in the country, 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 before choosing the best option.

If you still live in Brazil, the doubt if it is possible to use Brazilian proof of income is common, the answer is yes, you can use your Brazilian proofs. The Brazilian income statement, as well as payslips and bank statements can be used as proof when applying for financing.

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

Yes.

It is possible to buy a house in Portugal while still living in Brazil, but you will need a professional in the country to mediate the process. That’s because one of the requirements for buying a house in Portugal is to have the Tax Identification Number (NIF). To request the NIF still in Brazil, we recommend that you use the Bordr platform, which solves everything for you legally, quickly and at a fair price.

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 personally can be a mistake. So, plan yourself and before finalising the negotiation make a visit to Portugal and to the property.

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, equivalent to the CPF in Brazil, is essential to be able to carry out the transaction in the country. To request the NIF you must go to the Finance Department in Portugal.

Besides that, it is necessary to present your personal documentation, which can be your passport, if you don’t have residence in the country yet. The residence permit in Portugal can also be used in the process, or even the citizen card, for those who have European citizenship.

You will also need to present proof of income, for the negotiation. If you are still in Brazil, you must present the Brazilian income tax and other documents that help to 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, it is natural that there are many doubts. Among the main ways are banks and digital platforms.

Among the platforms for sending money internationally, we especially recommend Wise and Remessa Online. Both offer good sending conditions and low rates compared to other financial institutions.

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

Another option are the banks in Brazil, you can consult the bank in which you have an account and check the conditions. But be aware, in addition to higher rates, the currency exchange rate may not be very favourable by banking institutions.

Where to buy a house in Portugal?

Despite being a small country, Portugal is quite diverse, there are sunnier regions, like the Algarve, colder regions, like the North and more cosmopolitan regions, like 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.

In more touristic cities, such as Porto and Lisbon, prices are higher, but in the outskirts of these cities it is possible to buy good, bigger and better priced properties.

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

Lisbon is the most expensive place to buy a house in Portugal
Lisbon has the most expensive square meter to buy a house in Portugal.

Discover the best cities to live in Portugal according to your profile.

Residence permit through the purchase of property in Portugal

Depending on the value of the property you intend to buy in Portugal and the location, it is possible to apply for a permanent residence visa or Golden Visa.

Another very common doubt is if buying property in Portugal earns citizenship, see our explanation on the subject 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 indicate getting help from a consultancy.

Is it worth buying a house in Portugal?

Yes.

Especially for those who want to finance. In Portugal, property financing is very attractive, it’s more worth buying a property than renting. The monthly value of a mortgage is less than that paid in rents, which suffer from tourist pressure.

Interest rates in Brazil are high, especially when it comes to real estate financing. With rates that reach almost 10% in some banks, the value of long-term financing is unpredictable, and the installments may increase more than expected. On the other hand, 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.

If you intend to buy a house in Portugal by sending all the purchase money from Brazil, it may not be the best choice. With the devaluation of the real, your savings in Portugal may be reduced to very low values. So, if it is the case, send only what is necessary to make the down payment and then send it little by little. If you intend to work in Portugal, at some point you will start earning in euro and the value of the installments is very light in the budget.

But in the end, who has the answer to this question is you, is it worth it for you to invest in a property in Portugal? Considering all that we have presented, it is possible to better understand the country’s panorama and evaluate the purchase conditions before deciding.

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

There are, but it is possible that you can only find cheap property in more inland regions of the country. In the districts of Viseu, Vila Real, Beja – in Alentejo, among others, it is possible to find properties from 50 thousand euros.

In Viseu, for example, we find a two bedroom property with up to 70 m² starting at 80 thousand euros. In Évora, we find many two bedroom properties between 50 and 60 m² in the range of 100 thousand euros.

But you should weigh up the quality of life and job opportunities in these regions, they are less developed and it could be a poor 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 tax when buying a house in Portugal is common, just like in Brazil. In Portugal, the taxes levied on this type of transaction are:

  • IMI – Municipal Property Tax, paid annually;
  • IMT – Municipal Tax on Property Transfers, 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 property, 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 without income?

If you know how, tell me!

It is difficult to buy a house in Portugal or anywhere in the world without income. You need to have enough money to make the purchase of a property, either in cash or financed. Therefore, you need to have some kind of income.

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 a proof of where that money comes from, as well as you will need to use sending platforms to send money to Portugal. By Central Bank rule, the platforms will ask you to submit your income tax return to verify that the money is legal.

Article originally published on the Euro Tips website

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Author:

Atlantic Bridge

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