Real estate in Portugal - everything you need to know and leading buyer agent services

Portugal has developed in the recent years as a serious alternative to other European top real estate markets. Even in top locations such as Porto, Lisbon or the Algarve, the prices per square meter are between 1000 and 4000 EUR and are suitable even for smaller investments. In other regions even much lower prices can be realized. Portugal enjoys a steadily increasing demand in tourism, which is supported by the government and authorities.

 

The real estate market is increasingly developing into a tenant market which means that citizens tend more to rent then to buy real estate. This tendency is reflected in a strong increase in demand for long-term rentings. With the right real estate in Portugal buyers can achieve significantly better returns than in other European markets. Especially renting apartments or houses via platforms such as airbnb.de or booking.com as part of the Alojamento Local is currently making investments very attractive. Portugal also has one of the best and reliable Golden Visa programs in Europe which makes real estate  investments even more attractive. 

  

On our site you will find everything you need to know and many tips regarding real estate in Portugal. We explain the purchase process, the best regions, the tourist rental alojamento local, the costs of purchasing real estate in Portugal, tax opportunities for retirees and also the sea level in Portugal by the climate change. If you have any questions feel free to contact us! Buying real estate in Portugal can be easy.

 

Pearls of Portugal is the leading buyer agent which provides the most extensive services for buying real estate in Portugal. We also provide services to apply for the Golden Visa in Portugal.  We are looking forward to hear from you!

 

 

Contents


Find the best real estate in Portugal with the leading buyer agent Pearls of Portugal

Buying real estate in Portugal is not easy for international investors. There are a plethora of online portals and thousands of brokers that can be used to research real estate. Many interested buyers do not speak Portuguese. The legal legislation and standards in the marketing of real estate are very different compared to other countries. 

 

We of Pearls of Portugal are the leading buyer agent in Portugal that finds the best real estate for our clients and makes the purchase as safe and cheap as possible. We do not market a limited portfolio of real estate and are not regionally tied. The market is our portfolio. We offer all services related to the purchase of real estate for our customers ina fixed success fee. Our services and services create a number of important benefits for our customers:

  • We take care of the entire work for you.  We search on over 120 plattform, 70 real estate networks and banks. That relieves and saves time and nerves
  • We accompany you throughout the entire process. We organize the viewings for you and clarify questions
  • We provide you with professional evaluations of the real estate to guarantee you real and optimal market prices  
  • Our customers save a lot of money because we conduct the price negotiations for you with local and native employees
  • We work independently of the purchase price which allows us to show you also price attractive alternatives. 
  • Through us you have the best choice of objects and market transparency because we are not limited by a portfolio.
  • We offer fixed prices regardless of the real estate value. This way we can work 100% in your interest
  • We pay for many lawyer services which makes gives our clients a perfect cost control
  • You take no risk. If you do not like any of our proposal and do not wish to visit them, you will have no costs

WE FIND real estate  FOR OUR CLIENTS WITH an EXCELLENT MARKET VALUE

PG7: Dream House in Lisbon Mafra - 10 Min. to the beach

  • 518 sqm area and 1800 sqm private land
  • Big pool and high-end equipment
  • 5 bedrooms and 5 bathroom
  • 2 additional store rooms and 2 living rooms

Price: 695.000 EUR



Regions for real estate in Portugal

Although Portugal is a small country, there are many different regions with completely different characteristics. Each regions has its pros and cons also depending of the objectives to buy real estate in Portugal. Where to invest should be the first question to answer before searching for a property in Portugal. We strongly advice to visit the regions first and not only to take a decision based on the google findings.

Real Estate in Lisbon

The capital of Portugal and thus the largest city of the country is like Porto on the Atlantic coast. Unlike Porto, however, Lisbon is a much livelier metropolis. The cosmopolitan character of other Western European cities with a juxtaposition of tradition, modernity and liberal thinking can also be found here.

 

With its unpretentious charm, the city is becoming increasingly popular among foreign investors. The city has no internationally known figurehead like the Berlin Wall or the Eiffel Tower. Nevertheless, the city convinces with its great variety of different sights, cultural offer and infrastructure. In addition, the city offers ideal excursions in nearby destinations such as Sintra, Cascais, Mafra, Obidos, Sesimbra. The beautiful beaches at the mouth of the River Tagus can be reached within 30 minutes from the city.

 

The demand for real estate has increased significantly in recent years in Lisbon. In particular, the letting of tourists by private individuals has increased so much that even politics deal with the impact on the city. There was a great demand for touristic renting licences in Lisbon. Thats why the city has decided to suspend the allocation of new licences in some parts of the city. An official overview can be found here. In the middle and upper price segment, however, the supply is still very varied, the performance is stable and prices are still below the European average. Even in the very trendy suburbs of Sintra, Cascais and Sesimbra, inexpensive real estate can be purchased.

 

Real Estate Porto

Porto is Portugal's second largest city after Lisbon. The city is located at the mouth of the river Douro, which defines the picturesque scenery of Porto. The region is famous for the production of port wine. Charismatic for the city is the labyrinth of narrow streets of the Ribeira district. Here you can easily get lost in one of the countless cafes or restaurants and spend a few nice hours.

 

The entire center is characterized by ancient houses, narrow cobbled streets and many flying merchants. Especially the thriving cultural scene is appreciated by many visitors and locals. Also noteworthy is the great range of shopping. In addition to the fixed market hall "Bolhão" there are a number of weekly markets and shopping center, where you can shop very well local food but also international fashion.

 

Porto has become one of the most popular tourist destinations in the world in recent years. The city has been awarded several times as the best tourism city in Europe. Many tourists visit Porto for a city break or use the location as a base to visit other northern Portuguese cities such as Braga, Guimarães or Coimbra. Also popular are day trips to the adjacent wine region or the beaches Espinho or Matosinhos in the area of Porto.

 

A few years ago, in the center of Porto, you could still buy fantastic properties for less than 1000 EUR per square meter. Prices have been steadily rising but are still much more attractive compared to other European cities. Highly recommended is the purchase of an apartment, if you want to move to the city center. For renting to tourists, focus on the districts of Cedofeita, Santo Ildefonso, Sé, Miragaia, São Nicolau and Vitória, since visitors are first looking for accommodation in the city center. Gaia still offers reasonably priced real estate  and also has good access to the metro. Although there are also beautiful beaches, locals buy more properties in the north of the Douro. 

 

There was a great demand for touristic renting licences in Porto. Thats why the city has decided to suspend the allocation of new licences in some parts of the city. An official overview can be found here.

 

Real estate Algarve

The Algarve is the southernmost region of Portugal, known for its beaches, cliff-top landscapes and pulsing tourist centers. The coastal region is densely populated with a change of charming fishing villages and small towns. The area is also known for its excellent golf courses, which attract many international players each year and offer appropriate hotel facilities.

 

In the Algarve, the highest number of sunny days in Europe is counted, which makes properties for long-term use even in winter very attractive. The summers are hot and dry. The winters are very mild. The temperatures rarely fall below 10 degrees in this season and sometimes reach up to 20 degrees.

 

The best and most famous beaches in Portugal are in the Algarve. There are over 15 major beaches that can be reached quickly and easily by car. The beach of Odeceixe, for example, is lined with imposing cliffs, with the sea on one side and the river on the other. For families or grandparents with grandchildren, the beach is ideal as the younger children can enjoy the tranquility of the river while the adults enjoy the sea.

 

 For tourists, the Algarve is very popular. Therefore, the region has a very rich offer of restaurants, cafes, bars, shopping and leisure activities. The densely populated coastal strip "Litoral" forms the tourist center of the Algarve.

 

Especially in summer, renting a property is very attractive. Popular places to buy real estate are Tavira, Monte Gordo, Vale de Lobo, Vilamoura, Albufeira, Carvoeiro and Ferragudo. The properties are in the middle to upper price segment for Portugal. Most buyers are looking for freestanding real estate with a pool for their own use. If you want to rent and occasionally use the property for yourself, then an apartment in the small towns can also be attractive.

 

 

Real estate Atlantic coast / Silver Coast

Portugal's Atlantic coast stretches for nearly 700 kilometers on the entire eastern side of the country. The coast offers a rich variety of landscapes, cities and cultures. Each region on the coast has its own distinctive character and attracts with cliffs, sandy beaches and lots of nature.

 

 In the past, the region was dominated by summer guests from Portugal. Despite the cooler sea temperatures, many people enjoy the popular summer beaches in summer and enjoy the great weather. Meanwhile, many international tourists have discovered the region for themselves. This includes mainly visitors with interests in surfing, fishing or hiking. A mass tourism as in the Algarve however does not exist.

 

Visiting many small maritime towns along the coast brings a little time travel into a strongly decelerated world. Below are a few examples.

 

An internationally undiscovered city is Esposende in the north of Portugal dar. The city is also compared with Lagos on the Algarve due to the beautiful sea channels. The landscape is similar to the Baltic Sea, but has a much warmer climate. Many investors are attracted to the region, as the summers are not quite as hot as in the south of Portugal and nature is as strong as in northern Europe.

 

The beach town Nazaré is known worldwide for its extraordinary surfing conditions. Many world records have already been set here. The place itself is essentially characterized by its fishing traditions. The long, crescent-shaped beach is known for its beauty and pure white sandy beach.

 

 A small town further south is the town of Sines. The city has a historic old town with a castle and a large port facility. The most famous son of the city is the sailor Vasco da Gama. Due to the strong refinery facilities, the city was formerly shunned by investors. Due to the very sustainable policy in the last decade, the environmental conditions around the city have clearly normalized. This brings the beautiful and traditional character of the city back to life.

 

These are just three examples of Portugal's Atlantic coast. We are happy to inform and advise you in every detail. The real estate price are still quite low at the atlantic coast of Portugal which makes the pruchase of a property even more attractive

Real estate Alentejo

Alentejo is a large region in Portugal, which is located above the Algarve and extends to the capital Lisbon from the coast to the Spanish border. The landscapes and villages are correspondingly diverse. But they all have one thing in common. If you want to escape the hustle and bustle of cities and tourist centers, Alentejo is the place for you.

 

On the coast there are many fishing villages and small towns that have remained natural. The coastal landscape from Tróia to Zambujeira do Mar has even been incorporated into the Southeast Alentejo Natural Park. The interior of the region is known as the main cultivation area of cork oaks, which also characterize many landscapes with their charismatic form. The beautiful landscapes are compared by many travelers with Italian Tuscany.

 

One of the most important cities of Elvas has been classified by UNESCO as a World Heritage Site. There you can visit the Temple of Diana and see how culture and spirituality have a unique character.

 

Tourism is the region is not developed, but this in turn makes the attraction of the region. Land prices in the region are very low and real estate is reasonably priced. If you would like to purchase real estate with a lot of land, you will be able to invest successfully in this region even with smaller budgets.

 

For between 100.000 and 200.000 EUR you can already buy very beautiful houses with land. Many interested investors also opt for the renovation of an older property such as a farmhouses. The prices for such houses are usually with land between 10,000 and 30,000 EUR. The low labor costs for craftsmen make this an interesting option, not just for artisanal buyers.

 

 

Real Estate north Portugal

The further north you are in Portugal, the more you immerse yourself in the Portuguese society. Nature is much stronger than in the south and there are still many spots where social trends of acceleration and digitization have so far passed. Contrary to some rumors, the north is not cold, it is colder compared to the south of Portugal.

In the north you will find many small towns that have retained their charm and in whose restaurants you will ask in vain for an English menu. Cities with such a character include Ponte de Lima, Vila Verde, Braga, Arcos de Valdevez, Guimarães or Viana do Castelo. At the same time, the cities have a good infrastructure. Here you also find the best hospitals in the north of Portugal.

 

Due to the not very touristy infrastructure and the beautiful landscapes, the north or in particular the Peneda-Gerês National Park has become a very popular holiday destination for hikers and nature lovers. Thanks to the mild climate, the region offers ideal conditions for extended tours throughout the year. In addition to shady forest trails, the circular walks also offer challenging mountain trails and impressive panoramic views.

 

The unclear, mountainous landscape is habitat for many wild animals such as wolves, wild cats or wild horses. In the valleys there are lush vegetation and forests, especially oaks, prunus and the world-protected tree species Albergaria and Cabril.

 

With regard to real estate, there are still very good offers for houses and above all plots of land. When choosing the region, a distinction should be made between own use and renting to tourists. The strong hiking tourism takes place in the National Park and accordingly there are the right properties to find in the region. If you do not want to rent, you can find absolute dream properties on favorable conditions in the north.

 

 


Sea levels in Portugal and real estate

Many real estate buyers consider the proximity to the coast as an important factor when choosing the right region for a property in Portugal. An increasingly important factor is the rising sea level caused by climate change. Unfortunately, we have to deal with it, even if the effects will only be visible in a few decades. Worldwide sea levels can rise up to 82 cm by the end of the century. By 2050 the IPCC experts predict a sea level rise of 17-38 centimeters. The 2013 IPCC also notes that the rise of the oceans' water level could be accompanied by ocean storms.

 

Basically, one can assume that the impact of Portugal will not hit as hard as other nations in Europe. Portugal has already begun to 'liberate' many coastal areas from buildings where the buildings were built very close to the water. The measure has caused much displeasure among the owners, but makes sense from a geo and environmental perspective.

Which regions will be affected most by rising sea levels?

The scientific organization Climate Central provides simulations for the next decades for the global rise of the oceans. Of course, these simulations are not perfect and there are many factors for rising sea levels. Nevertheless we would like to provide you with a simulation for Portugal in the year 2040. The simulation is a good orientation for real estate purchases in areas that might be affcted by rising sea levels.

 

 

The most affected regions in Portugal according to Climate Central are the coasts of:

  • Aveiro
  • Figueira da Foz
  • Samora Correira region
  • Comporta
  • Lagos (Algarve)
  • Alvor
  • Portimão
  • Vilamoura
  • Faro
  • Olhão

North Portugal sea levels 2040 (simulation)

Source: Climate Control

Middle Portugal sea levels 2040 (simulation)

Source: Climate Control

South Portugal sea levels 2040 (simulation)

Source: Climate Control


How to rent real estate in Portugal / Alojamento Local

 

In contrast to other European countries, real estate can be rented in a simple and relatively non-bureaucratic way (quite simply it is nowhere) for tourist purposes. One of the best options is short term renting called "Alojamento Local" in Portugal.

 

 

"Alojamento Local" is the small commercial use of a property for tourist rental by natural persons. Without the registration number you can not register your property on platforms like airbnb.de or booking.com. But the effort is unique and, in our opinion, very limited, if you have informed yourself correctly. We would like to give you a first overview of the most important points in the following text. We are happy to advise and assist you in detail as part of our services.

 

Roughly speaking, there are only two essential steps for registering as "Alojamento Local". The first obligatory step is the registration of a small business, a so-called "actividade". You can only complete the registration forms of the Alojamento Local with the proof issued by the tax authority. The actividade can be requested online at the "Portal Finanças" or at any tax office. We recommend registering on-site, as the online process is not without stumbling blocks and questions can be answered on-site.

 

It is important to note that the small business is registered for the provision of accommodation services (as defined in Section I, subclasses 55201 or 55204 of the Portuguese classification of economic activities).

 

The registration as Alojamanto Local "can be done easily via the portal" Balcão Único Eletrónico". If the digital registration is not possible or you would like to carry out the report personally, you can also do this at many municipal administrations ("câmara municipal"). However, this often depends on the wealth of experience of the responsible officials. The paper form of the application can be found here.

 

You need the following documents if you own the property and you are a natural person:

  • A copy of the identity card
  • A personal statement containing the suitability of the building or the suitability of autonomous parts thereof (eg apartments) for the provision of accommodation services and compliance with applicable legal and regulatory standards.
  • A copy of the land register entry ("caderneta predial") as the owner of the property.
  • A copy of the explanation of the beginning of an "activity" (small business, see above).

For short term renting in Portugal a few more points are important and should be considered:

  •  Income earned through furnished accommodation for tourists [CAE 55201] is taxed under category B (as selfemployed income). To declare the income, each bill must be issued to the guest through a certified program or bill slip through a portal of the tax office.
  • Local lodging establishments must have an complaint book (livro de reclamações).
  • The so-called SEF (Serviço de Estrangeiros e Fronteiras) must be informed about the accommodation of foreign nationals. So all guests who do not have the Portuguese nationality - regardless of age. You can do that through the SEF portal.
  • Certain security features are required for the property. These are: a) a fire extinguisher and an accessible fire blanket; (b) First Aid Equipment c) The national emergency number (112) in a location visible to the user. In any case, we also recommend the attachment of fire alarms with integrated batteries and a term of 10 years. In addition, you should mark the exits, the fire extinguisher and the first aid box with self-illuminating signs.
  • When you advertise the property, the activity name and registration number given at registration should always be given. In our opinion, the registration number is especially important.

 

 


The buying process for real estate in Portugal

When buying a property in Portugal, it is advisable to have the process accompanied by a lawyer. We work with a number of lawyers together. The costs for the lawyers are included in our fixed prices.

 

 

The lawyer checks the legal situation of the real estate. The focus is on the ownership of the seller (certidao de teor), the presence of loads or the examination of basic security. In addition, it is checked whether the property exists officially in the form as it should be sold. We also like to check whether the conditions for a later tourist rental are given. 

 

 The Portuguese land registry (registo predial) provides the legal valuation of the property and provides information on how the property is constructed. But you can also obtain information about the legitimacy of the seller and about the possible burdens of the property. The caderneta predial is an excerpt from the tax register containing information about the tax situation and the tax obligations associated with the property.

 

The examinations, which are routine work, are included in the purchase pre-contract that is customary for property purchases in Portugal (contrato de promessa de compra e venda). The preliminary contract is legally valid even without notarial participation. It is usual to pay a down payment of 5-10% of the total price. In the preliminary contract, the seller should already present the necessary energy passport of the property. The same applies to an extract of the land register entry.

 

The pre-contract must include the corresponding registration numbers of the two documents, which should always be checked for safety. In addition, houses that were build after 1951 should have an official license (licença de utilização) that matches the actual building conditions. This document sets out the purpose for which the property was built and also ensures that it is a legal use of the building.

 

The preliminary contract normally includes a passage obliging the other party to enforce the notarial contract of sale. Otherwise, as a rule, claims for damages are also formulated if the actual contract does not materialize for other reasons. In the preliminary contract, the seller must also inform about existing tenants or list them.

 

The subsequent purchase contract requires a notarial form, taking into account inheritance law, family law and tax law aspects and is pre-formulated by a lawyer. In contrast to other European countries, a registration of the buyer in the land register is not required for the acquisition process, so that the buyer becomes the owner of the property upon conclusion of the notarial contract of sale. However, the entry should be settled directly with the purchase or within o period of 2 month after the purchase.

 

 


The costs of buying real estate in Portugal?

As in other countries buying real estate brings along other cost besides the actual  price. Some of these costs are obligatory, other costs are optional. We are happy to help.

 

Obligatory costs (continental Portugal):

  • Notary fees: They are between two and three percent of the purchase price and are incurred during the actual purchase
  • Real Estate Transfer Tax (IMT): The tax is staggered and a maximum of eight percent is due. For real estate under 92.407 Euro, there is no transfer tax. You can simulate the tax here
  • Property tax: This tax diffenciates depending on the region and must be paid annually. The rate is between 0.3 and 0.8% of the property value according to the land register entry. One should therefore not be surprised if the registered information on the value and size of the real estate usually deviate strongly from the reality
  • Application for a tax number (NIF) approx. 7 EUR
  • Land registry entry (about 250 EUR)
  • VAT on new real estate
  • Stamp duty: This is paid at the tax office and must be presented to the notary when signing the purchase contract. This is 0.8% of the purchase price

Optional costs:

  • Legal fees: If you hire a lawyer, the costs are between two to three percent of the purchase price
  • Brokerage commission: The ordering principle also exists in Portugal, but in contrast to other countries it is lived out in the spirit of the idea. If you look up a  Portuguese broker, you pay up to five percent of the purchase price

 


Pensions and real estate in Portugal

In recent years, many pensioners from Europe have moved to Portugal. One reason for this is the substantial tax reliefs granted to newly arrived citizens. The motivation for this is obvious. The government wants to create significant incentives for retirees to invest in the local real estate market and spend their money in Portugal.

 

If you buy a property in Portugal, you must register with the municipality of your Portuguese residence within a 3 months period. You already need a tax number for this registration. This is your old tax number from your current country. That means when you register as a resident, you are still tax-deductible in your "old" country.

 

The basic condition for acquiring the special status is a tax residency in Portugal. The requirements are met if you are in Portugal for more than 183 days in a calendar year or have property on 31 December that suggests that you have your habitual residence there.

 

When you meet these requirements, you must report as a "resident" to the Portuguese tax authorities. However, the Portuguese legislator has linked the tax relief to the special status of "non-ordinary tax resident" (residente não habitual). After the registration as a resident taxpayer in Portugal, you can apply for the special status until 31st March of the following year.

 

Under the UK/Portugal tax treaty, UK State pension and the majority of other pension income is taxable only in Portugal. As it comes from a foreign source, this makes it tax-free for non-habitual residents. Civil service pensions and other UK income and gains – which are taxable in the UK under the treaty – are also exempt from Portuguese taxation under NHR rules. This remains the case even if they are not actually taxed in Britain.

 

The special tax status is limited to 10 years. The status is acquired from the year in which the application is made. With the acquisition of the special tax status, the Portuguese State exempts your pension from the tax. 

 


Portugal life quality

Besides the advantage of getting a permanent visa in Portugal and Europe, Portugal offers also a lot of life quality. With an average daytime temperature of 14-21°C the weather is much milder than in UK or Germany  with 4-12°C. Even in the winter you can find places like the Algarve where the temperature does not drop below 10°C. 

 

In addition, the living costs in Portugal are  about 25% lower than for example in UK or Germany, which is associated with a significant purchasing power of foreign income in Portugal. This is particularly noticeable in labour costs and local food. 

 

Not to forget the traditional Portuguese cuisine, which is based on a great variety of fish and seafood, meat, vegetables, rice and of course high-quality wines.       

                                           

Portugal has invested heavily in the modernization of its infrastructure. The result is an extensive transportion network connecting the main cities. The main airports of Portugal - Porto, Lisbon and Faro - are well connected in Europe and are prime destinations of all low cost airlines such as Ryanair.

 

As a result  traveling to the easternmost country in Europe has become very cheap and time attractive. The road network in Portugal has been well developed. The main routes are covered by fee-based Autoestradas or toll-free Itinerários Principais (IP) or Itinerários Complementares (IC).