Buying real estate can be a stressful task. The process of buying a property involves many steps. The budget available, the method of payment, the type and location of the property, the legal process, and the additional costs are only some of the moving parts. The complication and stress multiplies when the subject property you want to acquire is located abroad. Portugal is no exception. We will try to ease the process of buying a property in Portugal with this guide here.

There are many reasons why people are interested in buying a property in Portugal. The country offers a high quality of life at low costs of living. The coastal paradise has a splendid climate. The nature and history of the country are breath-taking. It is safe, peaceful, and enjoyable to live in Portugal. Also, as an investment, the Portuguese real estate has many advantages to offer. There are attractive tax incentives to encourage international investors to acquire property in Portugal.  Furthermore, the real estate market of the country continues its solid progress benefiting owners with handsome appreciation and rental yields.

The “Why?” is easy to explain with the above reasonings.  As to “How?”, we will try to answer in detail below.  We will also provide insights into whether it is a good idea to buy property in Portugal or not.

How Complicated Is It to Buy Property in Portugal?

Buying property is often a drag. However, some countries provide buyers with a transparent and straightforward process. Portugal is one of those countries. Admittedly, legal transactions are always too much to handle by yourself. That is why buyers should always consider hiring a law firm to make the process smoother. These being said, Portugal’s real estate transaction process is relatively convenient.

The convenience of buying real estate in Portugal reflects in the number of transactions in the country. It is common for both locals and foreigners to choose to buy property rather than renting. This implies that the prices are still attractive and the transaction process does not put too much of an additional burden on the buyers.

Foreigners Can Benefit from the Advantages of Owning Property in Portugal

Portugal allows, in fact, encourages foreign investors to buy property in Portugal. Foreigners buy property in Portugal the same way locals do. The process is not different for any nationality.

Portugal’s investor immigration scheme, The Portugal Golden Visa Program, incentivizes foreign investors to buy property in Portugal. The program offers residency in exchange for real estate -and other forms of- investments. Portugal’s Golden Visa Program may even lead to citizenship.

The Process of Buying Property in Portugal

To initiate the process of buying real estate in Portugal, there are several requirements.

The first requirement is a Portuguese fiscal number. Also known as a tax number, número de contribuinte (NIF), is mandatory for every buyer. NIF can be received via government finance offices. To receive a NIF, verifiable address and valid passport number must be submitted. Having a NIF is necessary for opening a bank account and completing transactions.

The second requirement is the proper identification information. A passport or a Portuguese ID card is a valid form of identification.

Although it is not mandatory, it is advised to open a bank account in Portugal. It prevents any unnecessary expenditure due to fluctuations in exchange rates or international transfer fees.

Purchasing the Property

Once the property is selected, the buyer and seller must agree on a price. Then, the legal process begins.

It is best to hire a law firm for this process since the due diligence and legal documents tend to be complicated. To avoid any mistakes during the paperwork process, it is always safer to involve a professional. After the due diligence is performed and the contract is examined by professionals, parties must sign the document. This stage is where the buyer pays a deposit.  It is typical for this downpayment to be around 10%.  The final phase of the transaction takes place in front of a notary. Here, the buyer pays the rest of the amount agreed upon. Then the official documents are signed by both parties and the transaction is complete.

The Costs of Buying Property in Portugal

Aside from the amount paid to the seller, there are several costs of buying a property in Portugal. These are the IMT, Stamp Duty, Notary, and Land Registration Fees.

The IMT refers to the Property Transfer Tax. It varies depending on the price of the property. Stamp Duty is a fixed amount that equals 0.8% of the price of the property. Notary and Land Registration Fees also change according to the specific circumstances. However, these fees rarely exceed 600 euros.

Taxation of Real Estate in Portugal

Portugal imposes taxation on its real estate properties. The taxation costs of the property transaction were already mentioned in the previous section. The IMT generally varies around 6% in Portugal. However, it might also be not required if the house is to be the primary residence of the buyer. The Stamp Duty equals 0.8% of the price of the property. Finally, notary and registry costs vary around a few hundred euros.

Portugal Golden Visa Program

Portugal’s residency by investment scheme may come in handy when buying property. For foreign buyers, the Portugal Golden Visa Program is a great opportunity. It enables non-EU citizens to have access to some of the EU member state rights.  The residence permit allows for visa-free mobility, and it may eventually lead to Portuguese citizenship.

To obtain a Golden Visa, investors may invest 500,000 euros or more in Portuguese property. There are alternative routes where the minimum investment requirement is lower. For instance, if the property is older than 30 years or in need of renovation, the requirement is reduced to 350,000 euros. Additionally, if these properties are in low-density areas, there is an additional 20% cut on the minimum investment value, bringing them to 400,000 euros and 280,000 euros respectively.  Thus, Portugal’s Golden Visa program is a great opportunity to combine two benefits out of one investment. By following this route, investors may buy real estate and also receive Portuguese residency at the same time.

The GET Golden Visa

The GET Golden Visa is a professional company that guides investors and their families through the process of obtaining residency or citizenship programs. With its attentive and friendly staff, the GET Golden Visa is always ready to help its clients become global citizens.