Buying property in Portugal in 2025 – complete step-by-step guide for foreigners

Everything you need to know to buy a property in Portugal in 2025: legal steps, costs, documents, financing options, and insider tips for avoiding costly mistakes.

Buying property in Portugal is one of the most popular strategies for relocation, lifestyle improvement, and investment. The country combines affordable real estate (compared to Western European capitals), political stability, a welcoming tax environment, a safe living standard, and excellent quality of life. Whether you are purchasing a holiday home, a rental investment, or planning a permanent move, understanding the process will save time, reduce stress, and protect you from unexpected costs.

Why foreigners buy property in Portugal

Portugal attracts an increasing number of foreign buyers from Europe, North America, and the Middle East. Reasons are straightforward:

• High rental demand in cities like Lisbon, Porto, and in coastal regions such as Algarve and Cascais
• Stable real estate market with long-term growth
• Safety, mild climate, and internationally ranked quality of life
• Clear legal framework for foreign ownership (100% ownership possible)

Unlike some countries, Portugal does not restrict foreign ownership. You can buy as an individual or through a company.

Step 1: Get your NIF (tax number)

The NIF is your tax identification number in Portugal. Without it, you cannot buy a property, open a bank account, connect utilities, or sign most contracts. Non-EU buyers generally need a fiscal representative; EU citizens can apply directly at a tax office or through a lawyer.

How to obtain it:

• In person at a Finanças office
• Through a lawyer or relocation consultant
• Online through certified providers (fastest for buyers abroad)

Step 2: Open a Portuguese bank account

Most property-related payments — deposits, taxes, utilities, mortgage repayments — must be processed through a Portuguese bank account. While some banks allow remote opening, others require a visit. Expect to provide identity documents, proof of address, proof of income, and your NIF.

Step 3: Start property search (with or without a buyer’s agent)

Portugal’s property listings are not centralized. Properties may appear:

• On private platforms and real estate portals
• Directly on agency websites
• Through networking and local contacts

Buyer’s agents (representing the buyer, not the seller) are increasingly common among foreign investors. They negotiate on your behalf and verify documents early, preventing surprises during due diligence.

Step 4: Conduct due diligence (essential stage)

Never skip due diligence. In Portugal, buyers are strongly advised to involve a local lawyer. Your lawyer will verify:

• Property registration
• Absence of outstanding debts, mortgages, or liens
• Urban planning compliance (construction legality)
• Licensing / habitability certificate (important for rentals)

Many buyers fall in love with the property and rush to sign. A good lawyer prevents you from inheriting someone else’s problems.

Step 5: Sign the CPCV (Promissory Purchase and Sale Agreement)

The CPCV is the first binding contract. Here’s what happens:

• You agree on the property price and main terms.
• You pay a deposit (usually 10% to 20%).

If the seller withdraws after signing, they must pay you double the deposit. If you withdraw without cause, you lose the deposit. This contract protects both sides and locks in the property.

Step 6: Mortgage (if applicable)

Portugal is attractive for financed purchases because banks often lend to foreigners. Non-resident financing usually goes up to:

• 60–70% loan-to-value for EU buyers
• Up to 60% for non-EU buyers

Documents needed:

• Passport
• Tax returns or income proof
• Bank statements
• NIF + Portuguese bank account

Step 7: Final deed signing (Escritura)

The final contract (“Escritura”) is signed before a Notary. At this moment, the property officially transfers to your name. You receive the title deed and updated land registry confirming ownership.

Total costs to expect

Besides the property price, budget the following taxes and fees:

• IMT (Property transfer tax): varies according to price and property type
• Stamp duty: 0.8% of purchase price (mandatory for all purchases)
• Notary + registry fees: usually €800–€1,500
• Lawyer fees: ~1% of property price (or a flat fee)

If financing, add as well:

• Mortgage arrangement fees
• Valuation/appraisal fees

Tax impact after the purchase

Portugal has recurring and potential future taxes:

• IMI: annual property tax (0.3% to 0.8%)
• Capital gains: payable if you sell the property at a profit
• Rental income tax: if you rent out the property

Where to buy: best areas depending on goals

Lisbon: best long-term appreciation, strong rental market, highest price per sqm.

Porto: excellent returns, cultural appeal, rising demand.

Algarve: premium beach villas, golf, seasonal rentals, strong yield.

Silver Coast / Nazaré / Peniche: more affordable, surfer and expat communities.

Interior regions: best value for money and increasingly popular since remote work acceptance.

Most common mistakes foreign buyers make

• Not using an independent lawyer (don’t rely only on agency paperwork)
• Skipping due diligence to “secure the deal quickly”
• Underestimating closing costs and taxes
• Buying in areas with weak rental demand when expecting income

Portugal is safe for real estate transactions, but the process must be followed correctly.

Should you buy through a company?

For long-term rentals or multiple units, some investors structure purchases through a company, especially when optimizing tax planning. However, for personal homes, buying individually is simpler and cheaper.

Always consult a tax lawyer before deciding — changing structure after the purchase is costly.

Final thoughts

Buying property in Portugal in 2025 remains one of the most attractive lifestyle and investment opportunities in Europe. The country is politically stable, offers a high quality of life, and welcomes foreign ownership. With proper due diligence, a trusted lawyer, and clarity on taxes and fees, the process is smooth and secure.

If you want, I can generate:

• A downloadable checklist PDF
• A comparison table Lisbon vs Porto vs Algarve by price per sqm
• A list of recommended lawyers, banks, and buyer agents

Last updated: November 2025.