Foreign Ownership Rules
Unlike many countries, Portugal places no restrictions on foreign property ownership. Americans and other non-EU citizens can buy property on exactly the same terms as Portuguese citizens.
✓ No restrictions: No special permits, no trusts required, no prohibited zones. You can buy residential, commercial, agricultural, or any other property type.
What You Need
- NIF (tax number): Required before any property transaction
- Portuguese bank account: For payments and ongoing expenses
- Valid identification: Passport for notary transactions
You do NOT need residency to buy property. Many buyers purchase before obtaining a visa, using the property as proof of accommodation for their D7 application.
Buying Process
The Portuguese property purchase process is generally straightforward but involves several formal steps:
- Find property: Work with real estate agents (many English-speaking in expat areas)
- Make offer: Negotiate price and terms with seller
- Promissory contract (CPCV): Binding agreement with 10-30% deposit
- Due diligence: Lawyer verifies title, debts, and legal status
- Final deed (Escritura): Signed before notary, balance paid
- Registration: Property registered in your name at Land Registry
💡 Timeline: From accepted offer to final deed typically takes 1-3 months, depending on mortgage and due diligence complexity.
Essential Professionals
- Lawyer (Advogado): Essential for due diligence and contract review. Budget €1,500-3,000+
- Notary (Notário): Required for final deed signing
- Real estate agent: Usually paid by seller (3-5% commission)
- Surveyor: Recommended for older properties or structural concerns
Taxes & Fees When Buying
IMT (Property Transfer Tax)
IMT (Imposto Municipal sobre Transmissões) is the main tax when buying. Rates depend on property value and type:
| Property Value | Primary Residence Rate | Secondary/Investment Rate |
|---|---|---|
| Up to €97,064 | 0% | 1% |
| €97,064 - €132,774 | 2% | 2% |
| €132,774 - €181,034 | 5% | 5% |
| €181,034 - €301,688 | 7% | 7% |
| €301,688 - €578,598 | 8% | 8% |
| Over €1,000,000 | 7.5% flat | 7.5% flat |
Other Buying Costs
- Stamp Duty (IS): 0.8% of purchase price
- Notary fees: €500-1,000
- Registration fees: €250-500
- Legal fees: €1,500-3,000+
Budget 8-10% of purchase price for all taxes and fees combined. This is in addition to your deposit and balance.
Ongoing Property Taxes
IMI (Municipal Property Tax)
Annual property tax based on tax value (often lower than market value):
- Urban properties: 0.3% - 0.45% of tax value
- Rural properties: 0.8% of tax value
- Paid in 1-3 installments annually
AIMI (Wealth Tax)
Additional tax for high-value property portfolios:
- Applies to combined property values over €600,000 (individuals) or €1.2M (couples)
- Rate: 0.7% - 1.5% on value above threshold
AL Licenses (Short-Term Rentals)
If you plan to rent your property on Airbnb or similar platforms, you need an AL (Alojamento Local) license.
2024-2025 Rules
- New licenses suspended: Lisbon, Porto, and other "pressure zones" have banned new AL licenses
- Existing licenses: Must be renewed and can be inherited with property sale
- Outside pressure zones: New licenses still available in smaller cities and rural areas
If short-term rental income is your goal, verify AL license status BEFORE purchase. Properties in Lisbon/Porto without existing licenses cannot obtain new ones.
AL Tax Implications
- Rental income taxed at 28% (simplified regime) or normal rates
- NHR holders may have different treatment
- VAT may apply to rental services
Popular Areas for Expats
Lisbon Region
- Prices: €4,000-8,000+/sqm in central Lisbon
- Popular: Cascais, Estoril, Sintra (more affordable coastal options)
- Note: Highest prices, best infrastructure, AL restrictions
Porto & North
- Prices: €2,500-5,000/sqm in Porto center
- Popular: Foz do Douro, Matosinhos, Braga
- Note: Growing expat community, more affordable than Lisbon
Algarve
- Prices: Wide range, €2,000-6,000+/sqm
- Popular: Lagos, Tavira, Vilamoura, Carvoeiro
- Note: Established expat community, strong rental market, tourist focus
Silver Coast (Costa de Prata)
- Prices: €1,500-3,000/sqm
- Popular: Óbidos, Peniche, Caldas da Rainha
- Note: Growing expat area, more affordable, good surfing
Financing Options
Portuguese banks offer mortgages to non-residents, though terms are less favorable than for residents:
Non-Resident Mortgages
- LTV (Loan to Value): Typically 60-70% for non-residents
- Interest rates: Usually Euribor + spread (2-3% total typical)
- Term: Up to 30 years, but must end before age 75-80
- Requirements: Proof of income, credit history, property valuation
💡 Tip: Many American expats use US-based financing (HELOC, cash-out refi) or pay cash. Portuguese bank bureaucracy can be slow.