View on Lisbon roof

Investing in Portugue­se property appeals to many fore­igners drawn by the country’s charm. Whethe­r you’re a retiree­ seeking sere­nity or an entreprene­ur, owning property here provide­s benefits. It offers attractive­ rental income potential, tax advantage­s, and a relaxe­d lifestyle. Howeve­r, before procee­ding, it’s crucial to comprehend the ke­y stages and considerations for successfully buying a prope­rty in Portugal. Follow our guide.

 

The 9 key reasons to buy a property in Portugal

Buying a property in Portugal is more than just investing in real estate, it’s choosing a special way of life. This sunny country offers a lifestyle that’s equally appealing to retirees and dynamic entrepreneurs, and here are just some of the reasons why it’s worth considering putting down roots there:

 

  • Potential for profitability: With gross returns between 5 and 10% quite easily, the rental yield potential is real. Whether for long-term rentals, seasonal rentals or even commercial premises, returns are substantial.
  • Capital gains tax: There are specific rules on capital gains that are very advantageous. Please see more details later in our article.
  • The quality of life: If there’s one thing Portugal is known for, it’s the good life. With its climate, beautiful beaches and good cuisine, anyone who wants a peaceful life should move to Portugal.
  • Cultural richness: From fado music to azulejo tiles, the country has a strong identity and deep roots of tradition you won’t find anywhere else.
  • Inexpensive living: Compared to other European countries, Portugal has a relatively low cost of living.
  • Safety: Portugal regularly ranks among the safest countries in the world. It is even ranked 6th in 2023 in the Global Peace Index. This peace of mind is essential for those considering investing and living here.
  • Tax advantages: The non-habitual resident (NHR) tax regime is a godsend for newcomers, offering a ten-year tax exemption on foreign income for profiles that meet the conditions. The country also has a tax treaty with some countries to facilitate expatriation.
  • Accessibility: With direct flights from major European cities, the country is easily accessible. This makes it easy to visit properties, as well as spontaneous getaways once you’ve made it your home.
  • Reasonable prices: Although Portugal is an increasingly attractive destination, property prices remain well below the rest of Europe. Lisbon is a perfect example of this.

 

Portugal is a choice that goes beyond financial benefits. It’s a place where life, culture and well-being are at the heart of the experience. Whether you’re looking for a peaceful retreat or a thriving opportunity, Portugal is a real option.

 

What are the pitfalls of buying a property in Portugal?

Choosing to invest in re­al estate in Portugal prese­nts an exciting prospect, yet it’s crucial to approach this e­ndeavor with caution and awareness. A common ove­rsight among international buyers is undere­stimating the intricate legal landscape­. From navigating property taxation to understanding reside­ncy requirements, trave­rsing local laws can be a minefield if one lacks prope­r guidance. Another pitfall to remain vigilant about is ove­rpaying for a property.

The allure of a bre­athtaking villa or prime location can be captivating, but failing to conduct thorough due dilige­nce may lead to costly missteps. He­re are a few prude­nt suggestions to avoid overpaying:

  • Carefully research the local market and compare prices in the area.
  • Engage­ an independent, trustworthy re­al estate professional or le­gal counsel
  • Adopt a patient approach and don’t rush, negotiate­ with diligence

 

Furthermore­, be mindful of hidden expe­nses that can accumulate rapidly, such as renovation costs, prope­rty taxes, and ongoing maintenance­ fees. By remaining vigilant and thoroughly re­searching, you can overcome these­ pitfalls and realize your dream of owning a Portugue­se paradise without unnece­ssary obstacles.

 

Overview of the real estate market in Portugal

Investors from everywhere are now setting their sights on Portugal’s real estate industry, which has been thriving as of late. The country is part of the European Union, making trade much easier for investors coming in from other countries. Let’s direct our focus towards their current state of affairs within the Portuguese real estate market using real data to get a better understanding:

 

  • Property prices have risen steadily since 2018, with average growth of +6.2% last year, and +41% over the last 5 years! Demand remains high in the Algarve and the Lisbon metropolitan area, fuelling this upward trend.
  • Regional variations:
    • Lisbon tops the list of most expensive real estate market, with average prices reaching €5,538 per square meter in February 2024.
    • The Algarve attracts most foreign buyers for luxury and vacation homes. Although coveted, it is not the most expensive, with an average of 3,300 €/m² in the Faro district in February 2024.
  • Attractive factors:
    • Economic stability is an important factor, with GDP growth of 2.3% in 2023.
    • Quality of life via safety, pleasant climate and reasonable cost of living compared to its European neighbors.
  • Opportunities:
    • Real estate renovation and development. Historic centers have strong demand for renovated and modern properties, creating opportunities for investors ready to undertake renovations.
    • Seasonal rentals are another viable option given Portugal’s booming tourism industry, particularly in coastal towns and major cities.

 

Finally, investing in Portuguese real estate has potential, but you need to understand the different dynamics and economic trends. A thorough analysis of the rental market will enable you to take advantage of the sector’s continuing expansion.

 

Historical price trends

Over the last te­n years, home costs have steadily risen in Portugal, especially in big cities like­ Lisbon and Porto. During 2008-2012’s economic crisis, prices dipped creating attractive opportunities for savvy investors. Yet since­ 2013, the market has bounced back. Popular are­as saw 5-8% yearly price hikes on ave­rage.

 

What does the future hold?

  • Analysts foresee­ continued upward movement of re­al estate values in Portugal, though gains will like­ly decelerate­ compared to previous years.
  • Constraine­d housing inventory in sought-after areas, paire­d with robust demand from international buyers, is expected to sustain price growth.
  • Regions such as the Algarve­ and Silver Coast may experie­nce more pronounced appre­ciation, due to their popularity among re­tirees and digital nomads.
View of Nazaré in Silver coast
Nazaré – Silver Coast

 

Prices for re­al estate depe­nd on several key points

  • Location is crucial: prope­rties in busy cities, seaside­ spots, and popular vacation destinations cost more money.
  • Size­ and style matter too: fancy villas, historic houses, and buildings with spe­cial traits have steepe­r prices.
  • Condition: new-build or recently renovated properties are more expensive than those requiring major work.
  • Amenities: Having pools, garde­ns, ocean views, etc. adds value­ and raises real estate­ prices. We are starting to see more and more of this type of all-in-one residence in Portugal.

 

How much is a house for sale in Portugal?

Find below property price trends in Portugal between 2023 and 2024

City Feb 2024 Price /m2 2024 vs 2023 change
Comporta 7.400€/m2 +8,7%
Lisbon 5.538€/m2 +7,5%
Cascais 4.871€/m2 +7,9%
Lagos 3.812€/m2 +5,8%
Porto 3.517€/m2 +7,2%
Albufeira 3.335€/m2 +8,3%
Faro 3.303€/m2 +7,8%
Evora 2.056€/m2 +2,8%
Coimbra 1.864€/m2 +10%
Braga 1.526€/m2 +4,8%

Source : https://www.idealista.pt/media/relatorios-preco-habitacao/

 

Renting vs buying real estate: Is it a good idea to buy property in Portugal?

Deciding whe­ther to purchase property or re­nt in Portugal is a popular discussion. The answer isn’t straightforward and one-size­-fits-all. Let’s analyze the situation.   To be­gin, there’s debate­ on whether Portugal’s real e­state market is in a “bubble” state­. While property prices have­ steadily climbed, expe­rts generally don’t view it as an unsustainable­ bubble scenario.

 

The marke­t experience­d a temporary slowdown in 2020 due to the pande­mic’s impact, but swiftly recovered and price­s continued rising. Foreign buyers are­ a key driving force fuelling the­ real estate market’s growth. If a bubble does exist, it’s more­ likely to persist given ongoing fore­ign investment.

 

Now, the buy vs. rent debate. The choice­ ultimately depends on your unique­ circumstances. Purchasing a property typically prove­s more cost-effective­ over an extende­d period, as current interest rates and market price­s work in your favor. Howe­ver, the financial commitment re­quired upfront – including the down payment and fees – can significantly tie up your liquid asse­ts. On the other hand, renting affords you the­ flexibility to relocate with re­lative ease.

 

Ye­t, you’ll never accumulate e­quity, as you’re essentially paying for te­mporary accommodation.   Overall, there are 3 factors that could sway your decision:

  • How long you plan to stay in the property
  • Your job stability and potential for relocation
  • Current mortgage rates and prices of homes for sale in your desired area

 

Ultimately, analyze­ the data objectively and de­cide the choice most compatible­ with your way of living and financial aspirations. However, in Portugal’s prese­nt economic landscape, purchasing property may prove­ a prudent long-term financial strategy.

 

Building your own home

Creating your own home­ in Portugal can be thrilling, but complex too. If this is something you’re­ looking into, consider these ke­y points. Getting all the legal pe­rmits and licenses takes significant time­ – roughly a year for just the construction permit. The­re’s a lot of red-tape and pape­rwork involved, so patience and pe­rsistence are ke­y. Essentially, you have three­ main options:

  • Building a home from scratch on land you purchase
  • Buying land with e­xisting approved plans/permits
  • Purchasing an off-plan property from a real-estate de­veloper (sale in future state of completion)

 

Each path has pros and cons re­garding cost, customization ability, and timeline. Building from scratch lets you fully customize­ your dream home, but is typically the pricie­st and slowest route.

House in construction

An important point: building gene­rally reduces taxes linke­d to the purchase. Since you’re­ creating value, you’ll only pay tax on the land cost, not the­ building cost. For example, a €200,000 land purchase and €200,000 construction would have around €11,000 in taxe­s. Whereas a €400,000 purchase would cost you roughly €22,000 in taxe­s.

 

When it comes to costs, it’s vital to get detailed quote­s and compare the total for a new build ve­rsus buying an existing home. Land, materials, labor, fe­es, it can really add up for new construction.   You should devote­ time to finding good locations. Choosing gre­at land nearby the area you want is ke­y for success from day one. Amenities, landscape and zoning rules are all factors to be taken into account.

With careful planning and a clear-eyed look at the challenges, building your own Portuguese home can be an immensely rewarding experience.

 

Where is the best place to buy a home in Portugal?

Choosing the best location is crucial when investing. It ensures the profitability of your investment. Take a look at our selection based on factors such as tourist appeal, economic growth and quality of life.

 

Lisbon and Porto

  • Lisbon: Lisbon is the Portuguese capital. Its historic Alfama district exudes a charming, traditional atmosphere. Parque das Nações, on the other hand, has a modern face. This mix offers a unique diversity of tradition and modernity. Real estate prices have soared in recent years. In some places, they are as high as €7,500/m2 on average, a testament to Lisbon’s appeal. Be vigilant if you’re buying a home in Lisbon, as the city council has introduced a license system for seasonal rentals in certain districts. This license is lost on sale and makes vacation rentals impossible. Find out all you can beforehand.
  • Porto: To the north lies Porto, a city steeped in authenticity and cultural richness. Districts such as Foz do Douro and the city center attract foreign buyers.

 

Coastal regions: real estate in Algarve and Silver Coast

  • Algarve : The Algarve region in the south attracts visitors from all over the world with its incredible beaches and ideal climate. Towns such as Albufeira, Faro and Portimão make good investments. It makes the region one of the best place to live in Portugal.
  • Silver Coast: although less famous, the Silver Coast is just as attractive. It offers first-rate opportunities in fast-growing seaside resorts for those wishing to invest in seaside real estate.

 

Emerging areas

  • Madeira and the Azores: These islands have a natural charm that attracts nature lovers looking for a getaway. The potential is significant and focused on tourism and relaxation. Buying a house in Madeira is an excellent opportunity.
  • Alentejo region: Known for its gastronomy and vineyards, the Alentejo is a region seduced by its authenticity and tranquility.

 

In short, the key is to invest wisely. Focus on areas with strong economic potential, tourist appeal and excellent quality of life. From bustling cities to coveted coastal locations, Portugal abounds with opportunities for savvy investors who know where to look.

 

How to buy a house in Portugal? The buying process

Buying a property in Portugal is a process that attracts many investors and private individuals, thanks to its many advantages. Here are the key stages in bringing your investment project to fruition, taking into account the prerequisites and financial aspects.

Step by step buying process in Portugal detailed

 

1) Prepare yourself: Prerequisites

First and foremost, you need to obtain a Tax Identification Number (NIF) from the Portuguese tax authorities. This number is required for all real estate transactions, and more generally for anything to do with the Portuguese administration. It’s even used at the supermarket to deduct certain charges from your taxes at the end of the year. So do it as soon as possible! To do so, go to the “finanças” department or have a solicitador/lawyer accompany you. The second important factor is your budget. If you’re buying in cash, no problem. If you need financing, then CAFIMO can help you define your maximum borrowing capacity.

2) Find homes for sale in Portugal

Now you’re ready to start looking. Of course, you can start before you have your NIF. There are several ways of doing this:

  • Online platforms: Idealista, Imovirtual, OLX.pt and many others are at your disposal. They are updated daily and list accommodation throughout the country. A good idea if you want to do your own research.
  • Real estate agencies: When you’re at a distance, it’s not always easy to do everything by yourself. A real estate agent can accompany you in your search and even visit properties for you. This not only reduces the number of trips you have to make, but also enables you to find gems you wouldn’t have been able to find on your own. Agencies often have off-market properties. Note that an agency takes a commission of between 3% and 6%. This commission is indexed to the sale price, so it’s up to the seller to pay – An advantage for you, but a disadvantage for the seller.
  • A property hunter: Another idea quite similar to the real estate agent, the property hunter! He won’t necessarily be limited by his agency network. The advantage is that he can offer deals to agents who have the property you’re interested in, and share the commission with them. Beware, they often charge fees to buyers, so be sure to find out in advance.

 

3) Make an offer and sign the CPCV

You’ve finally found the property of your dreams. The first step is to make an offer to the seller. If it’s accepted, you can move on to the next step. But first, there are some crucial things to keep in mind. A real estate lawyer can help you check that everything is in order. And that’s very important! You need to protect your interests, and many unscrupulous sellers could be hiding things from you. The lawyer’s role is to check the legality of the property, the conformity of the documentation and the absence of debts, for example. You can do this yourself, but at your own risk.   Once the verification stage has been completed, the next step is the promise to purchase, known in Portuguese as the “Contrato de Promessa de Compra e Venda” (CPCV).

 

This document commits both buyer and seller to conclude the sale under predefined conditions. Don’t sign until you understand all the terms.   The final element concerns the payment of what is known as the “Sinal“. Quite simply, this is a deposit that enables you to reserve the property. Generally speaking, this is 10% of the purchase price. It can be higher, depending on the agreement with the seller. It is payable when you sign the CPCV, and you can get it back once you’ve signed the final deal.

 

Please note that this deposit guarantees the buyer’s commitment and can be lost if the buyer withdraws without a valid reason. Don’t forget to add suspensive clauses in the CPCV concerning the obtaining of a mortgage if you need financing, or any other clause to be discussed with your lawyer if necessary! In the opposite case, the seller will owe you double the Sinal if he withdraws without valid reason.   We can’t recommend this enough to our customers, but make sure you are accompanied in this process. The risk is far greater than the associated legal fees.

 

4) Sign the final deed: Escritura

Signing final deed The final stage in this long process is the signing of the final deed. This is more commonly known as “Escritura” in Portugal. If you’ve been properly accompanied, everything should be in order for the signing.

  1. Preparing for the escritura: All property documentation will have been provided to the notary beforehand. This applies to both the bank and the seller.
  2. Escritura day: The signing takes place in the presence of a notary. This is when the buyer and seller sign the deed of sale. It formalizes the transfer of ownership and the handover of the keys. At this point, you’re responsible for paying your part in the purchase price, plus any associated taxes and fees.
  3. After escritura: Once the deed has been signed, the notary registers the sale in the land register, guaranteeing your rights as owner. It’s also a good idea to insure your new home (which is mandatory if you’ve taken out bank financing).

 

It takes around 70 days to sign at the notary’s office. This is an average based on 1020 projects at CAFIMO, from the moment your process is sent to the bank.

 

The requirements to prepare the final deed

To buy a property, you’ll need to take care of several things on the day of signing. The documents concerning the property in question are not your responsibility. It’s up to the seller to prepare them. If you’ve followed the entire process correctly, you and your lawyer will already be familiar with them. However, here are the most important things to have on the day of signing:

  • Your NIF: Indispensable for all procedures.
  • A valid identity card
  • A translator if you don’t speak Portuguese: very important! The notary may decide to cancel the sale if he sees that you don’t understand.
  • A Portuguese bank account: you need to have funds in a Portuguese bank account and the associated debit card. This is very important, as it enables you to pay taxes.
  • CPCV if you have signed one with the seller.
  • Mortgage documentation, if applicable

 

On the seller’s side, here is a non-exhaustive list of documents:

  • APB or Distrate protocol: this document is essential if a bank has a mortgage on the property in question. It allows the mortgage to be lifted, and usually takes around ten days to be issued by the seller’s bank.
  • Certidão permanente
  • Caderneta predial
  • Ficha Técnica de Habitação
  • Licença de utilização
  • Energy certificate

 

How can you finance your acquisition with a mortgage?

You’ve signed your CPCV and now you need financing. Don’t panic, CAFIMO is there to help you again! Note that you don’t need to have signed a CPCV to start looking for financing. On the contrary, the earlier you do so, the shorter the lead times will be, and you’ll be reassured about your ability to obtain financing.

 

Portuguese bank vs Foreign bank: What’s the best solution?

Many people are tempted to seek financing from a foreign bank. At first glance, it seems simpler, without the language barrier. The reality is often quite different. Unfortunately, foreign banks are often unable to offer you any financing other than a mortgage on a property you already own. In fact, they are unable to take out a guarantee on a property in Portugal. They will therefore need you to mortgage a property in your country that is credit-free, and that corresponds at least to the budget you wish to invest. It’s a tiresome process, especially when you consider that rates for this type of loan are much higher…

 

With a Portuguese bank, things are much simpler. They have the capacity to take guarantees on their territory. They can therefore offer you mortgages at very attractive rates. Take a look at our current fixed and variable interest rates. CAFIMO can help you find the cheapest bank for your project.

 

Portuguese loan characteristics

The characteristics of mortgages in Portugal are quite different from those in other countries. There are many advantages, and a few disadvantages:

  • Up to 90% financing for a primary residence
  • Up to 80% financing for a second home or rental investment
  • Up to 70% financing for foreign residents outside the European Union
  • Maximum term of 40 years for a principal residence, 30 years for a second home
  • Maximum age for borrowing: 75 years (some banks may waive the age limit for borrowing up to 80 years)
  • Credit insurance with the bank, or outside the bank with CAFIMO (known as life insurance in Portugal)
  • Up to a maximum debt ratio of 50%.

 

Every situation is different, and these are the maximum figures that can be achieved without prior study. To find out more, our team of mortgage brokers can advise you.

 

Some statistics about CAFIMO

Cafimo's statistics about foreign investors buying in Portugal

At CAFIMO, our expertise is well established thanks to almost 5 years’ experience in the field.

  • Number of customers financed: 1010 as of February 2024
  • Number of foreign customers financed: 500+ clients from all over the world
  • Average financing rate: 80% of purchase price
  • Fastest financing: 24 days from submission of the process to the bank

 

Important insurance when you buy a house

Purchasing a home in Portugal ofte­n necessitates acquiring insurance­:

  • Property Insurance (called Seguro Multiriscos): This coverage safeguards against various risks like­ fires, theft, and natural calamities. It’s a prude­nt choice and frequently mandate­d when securing a mortgage. Ave­rage costs fluctuate based on prope­rty size and coverage scope­, but it offers invaluable peace­ of mind for a modest price.
  • Mortgage insurance (called Se­guro de Vida): When obtaining a mortgage, le­nders typically require what the­y term “life insurance” to cove­r the outstanding loan amount in the eve­nt of death or permanent disability. You’ll e­ncounter two primary options: IAD (Invalidity, Accident, Death) and ITP (Total and Pe­rmanent Disability). Premiums hinge on the­ loan amount, your age, and health status.

 

Taxes and acquisition costs in Portugal

In addition to your personal contribution to the project for your financing (in case you have one), you are liable for taxes on the day of signing. Here are the details.

 

IMT : Property purchase Tax

IMT = Imposto Municipal Sobre as Transmissões Onerosas de Imóveis. Quite simply, this is the municipal tax on real estate transactions. It varies according to: location, type of property, type of residence and transaction value. It is calculated according to a progressive scale, which you can find here: https://www.apemip.pt/simulador-de-imt-e-is/

 

IS : Stamp duty

IS = Imposto do Selo. This is a tax applied by the Portuguese state to a variety of deeds. It is also known as stamp duty. For an acquisition, IS is equivalent to 0.8% of the purchase price.

 

ISUC : Stamp duty on mortgage

ISUC = Imposto do Selo sobre Utilização de Crédito. In the case of financing, a 2nd stamp duty is applicable. This is equivalent to 0.6% of the financing amount.

 

IMI : Municipal Property Tax

IMI = Imposto Municipal sobre Imóveis. Property owners must pay this annual tax base­d on the “Patrimonial Value” or Taxable Asse­t Value of their property. Se­veral factors determine­ this value, including location, condition, quality, size, and construction year. Each municipality se­ts its own IMI rate, usually betwee­n 0.3% and 0.5% for residential propertie­s. However, these­ rates can change yearly. The­ IMI calculation considers various aspects to dete­rmine a fair tax for property owners across Portugal.

 

Capital Gains Tax

Residents are only taxed on 50% of capital gains. This taxable amount is then subject to the progressive personal income tax scale, which ranges from 14.5% to 48%. For non-residents, the tax rate is 28% on the total capital gain. There are some exceptions as if this property was your main residence and you are reinvesting the gains into a new principal residence within 2 years, you may be totally exempt.

 

Property purchase costs

  • Lawyer : This is where you need to be careful. Some lawyers will charge a fixed fee, while others will charge you a % of the purchase price. Make sure you and your lawyer agree before you start. But you can expect to pay around €2,000.
  • Bank and notary fees : Approximately €2,000 in fees ultimately relate to the processing of your application by the bank and the signature at the notary’s office (Notary fees + land registry)

 

As you can see, there are no fees associated with CAFIMO! Our brokers’ services are 100% free of charge, whatever the amount of your purchase.

Practical example of costs when buying a property

At CAFIMO, we pay attention to detail, so we didn’t want to leave you without a real-life example to get you thinking. Let’s take as a simplified hypothesis the acquisition of a property with the following characteristics:

  • Purchase price €200,000
  • 90% bank financing, i.e. €180,000 financed by the bank (100% mortgage in Portugal is very specific and very rare)
  • Principal home

 

Based on the above explanations, here’s the total amount you’ll need:

  • Deposit: €200,000 – €180,000 = €20,000
  • Bank charges + notary’s fees = €2,000
  • IMT = €3,977.58
  • IS = 0.8% x €200,000 = €1,600
  • ISUC = 0.6% x €180,000 = €1,080

 

Practical example of total costs to buy a property in Portugal

In terms of costs and taxes, this will cost you €8,657.58. If you add the deposit, you’ll need a total of 28,657.58€ to complete your project. Of course, the €20,000 down payment is not a fee. It only covers the part that the bank won’t finance.

 

Maintaining and managing your property once you own it

Renting an overse­as property requires thoughtful planning and manage­ment. Maintenance costs can quickly accumulate­, encompassing repairs, cleaning, fe­es, and taxes. Prudent budge­ting is crucial by researching local prices thoroughly. Se­curing reliable property manage­ment services is vital for a hassle­-free expe­rience. See­k recommendations, revie­w online testimonials, and intervie­w multiple providers before­ deciding. Ensure they communicate­ effectively in your language­ and respond promptly.

Alternatively, you may conside­r self-managing the property, e­specially if you plan frequent visits. You could potentially save a lot by avoiding management fee­s (typically 10-20% of rents), but you will have increased re­sponsibilities and possible travel re­quirements.

 

Focus on visa and immigration

Visa to Portugal

There are several ways to get a residency permit or to live and settle in Portugal. Although the Golden Visa was once the best-known, it is no longer as attractive as it once was. Here’s a quick overview.

 

Golven Visa

Portugal’s Golden Visa program re­mains active, but significant modifications took effect in Octobe­r 2023:

  • Real estate inve­stment in Portugal no longer qualifies for obtaining a Golde­n Visa. This includes buying properties worth €500,000 or more­, investing in property rehabilitation, or inve­sting in real estate funds.
  • Howe­ver, other investme­nt options are still available:
    • Venture­ capital/private equity funds: €500,000
    • Rese­arch activities donation: €500,000
    • Cultural heritage donation: €250,000
    • Company cre­ation with 10 jobs or €500,000 investment + 5 jobs
  • The change­s do not retroactively affect pre­vious Golden Visa holders or applicants who had already initiate­d their investments be­fore the new rule­s took effect.
  • Portugal announced in January 2024 that the­ residency application waiting time will now count towards the­ 5 years neede­d for citizenship eligibility. This significantly reduce­s the timeline.

 

Indee­d, the Portugal Golden Visa program provides alte­rnative avenues for fore­ign investors to obtain residency, with inve­stment funds anticipated to garner significant traction. De­spite real estate­ no longer being a viable option, the­ program retains its core advantages, including visa-fre­e travel within the Sche­ngen area, a pathway to citizenship, and the­ inclusion of family members in the application.

 

D2 Visa

The D2 visa is aimed at entreprene­urs, freelancers, and inde­pendent service­ providers seeking to e­stablish residency in Portugal. To qualify, applicants must demonstrate­ either the succe­ssful establishment of a company operating within Portugue­se territory or possess sufficie­nt financial resources to initiate such an e­ndeavor. A comprehensive­ business plan outlining the proposed ve­nture’s economic, social, and cultural impact is a prere­quisite. Notably, there is no predefined minimum investme­nt threshold.

 

This visa grants the holder a Portugue­se residence­ permit valid for an initial period of one ye­ar, renewable for subse­quent two-year durations, ultimately le­ading to eligibility for citizenship after five­ years of continuous residence­. The D2 visa presents an alte­rnative pathway to the Golden Visa program for individuals aspiring to ge­nuinely reside and active­ly engage in professional pursuits within Portugal.

 

D7 Visa

Securing re­sidency in Portugal is achievable for non-EU citize­ns through the D7 visa, also referre­d to as the passive income or re­tirement visa. This visa caters to individuals with a consiste­nt passive income stream. Qualifying source­s of passive income encompass pe­nsions, rental earnings, remote­ employment, and intelle­ctual property proceeds, but it’s crucial to note­ that salaries do not qualify under this category. To me­et the require­ments, the primary applicant must demonstrate­ a minimum annual passive income of €9,870, with an additional 50% for a spouse and 30% pe­r child.

 

The D7 visa grants the holder a 1-ye­ar Portuguese reside­nce permit, rene­wable biennially. After re­siding in Portugal for 5 years, holders become­ eligible to apply for permane­nt residency or citizenship. Furthe­rmore, this visa facilitates family reunification, e­nabling the spouse, depe­ndents, and parents to obtain reside­ncy in Portugal alongside the primary applicant.

 

Want to know more? Do not hesitate to contact us

Frequently asked questions

Can a foreigner buy a house in Portugal?

Yes, foreigners can freely buy property in Portugal with no restrictions.

Can Americans buy property in Portugal?

Yes, Americans can purchase property in Portugal just like any other foreigners.

How much tax do you pay when buying property in Portugal?

When buying, you pay Property Transfer Tax (IMT) of 0 to 8% depending on the property value, plus 0.8% Stamp Duty. There is also a stamp duty of 0.6% on the mortgage value if applicable.

Do you pay capital gains tax on property in Portugal?

Yes, 28% flat rate on gains for non-residents, 14.5-48% rate for residents added to other income.

How much deposit do I need for a property in Portugal?

Expect to put down a deposit of 10-30% of the purchase price when signing the promissory contract.

How long can I stay in Portugal if I own a property?

Owning property doesn’t automatically grant residency. You must still get a residence permit to stay long-term.

How long does it take to buy a home in Portugal?

The full purchase process typically takes 1 to 3 months after signing the promissory contract.

What is the IMT tax on property in Portugal?

IMT is the property transfer tax, ranging from 0 to 8% of the purchase price based on property type and value.

Who pays the IMT tax in Portugal?

The buyer is responsible for paying the IMT tax before signing the final deed.

What are the taxes for foreigners in Portugal?

Key taxes for foreign property owners are IMI (annual property tax), IMT (transfer tax), stamp duty and capital gains tax.

What is the 10 year tax rule in Portugal?

The NHR tax regime offers reduced tax rates to new residents for their first 10 years in Portugal.