Buying a house in Portugal: A gateway to paradise

Why buy a house in Portugal?

• Climate and lifestyle: Portugal enjoys a mild climate all year round, with mild winters and warm summers. Its Mediterranean lifestyle, characterized by tranquility and hospitality, will allow you to enjoy a more relaxed pace of life.

• Cost of living: Portugal stands as an oasis of affordability compared to its European counterparts. According to the Portuguese National Statistics Institute (INE), the cost of living in Portugal is significantly lower than the EU average, offering an attractive lifestyle at an affordable price. From housing, 30% cheaper, to food, 15% cheaper, to transportation, 20% more affordable, and other basic expenses such as utilities or leisure, Portugal provides an ideal environment for those seeking a European lifestyle without unbalancing their budget.

• Portugal boasts a significantly lower cost of living.

Renting or buying a home in Portugal is considerably cheaper than in most European capitals. For example, renting a two-bedroom apartment in Lisbon can cost around €800 per month, while in cities such as Paris or London the average price is over €2,000.

Eating out in a restaurant costs around 20 euros per person, while in countries such as France or Italy the average price is over 35 euros. In addition, the shopping basket in Portugal is significantly cheaper, with fresh and quality products.

In addition, that other expenses, such as leisure, health and other basic services are also cheaper in Portugal.

• Safe investment: The Portuguese real estate market has recovered in recent years, making it a safe and profitable investment. In addition, the Portuguese government has implemented a series of tax incentives aimed at attracting foreign investment and stimulating the country's economic growth. These incentives cover various sectors and aim to boost job creation, innovation and competitiveness.

Some of the tax incentives for foreign investors are:

Non-Habitual Resident Regime (NHR): which offers a 10% tax exemption on foreign-source income for a period of 10 years.

Corporate tax rate: Portugal has a competitive corporate tax rate of 21%, one of the lowest in Europe.

Special tax regimes (STIs): Tailor-made tax regimes exist for specific sectors such as manufacturing, tourism and agriculture.

Tax regime for investment funds: With favorable measures such as tax exemption on capital gains, transparent taxation regimes, reduced corporate income tax, tax exemption on dividends or tax exemption on interest.

Double taxation agreements (DTA): Portugal has a wide network of DTAs with other countries, preventing double taxation on income obtained abroad.

• Strategic location: Portugal is strategically located in Southern Europe, with easy access to other countries in the continent. It also has an excellent transportation infrastructure, with international airports and road and rail connections.

What are the necessary procedures to buy a house: Buying a house in Portugal can be a complex process, especially if you are not familiar with the legal and administrative procedures required. We will explain step by step everything you need to know to buy a house in Portugal without complications.

1. Obtaining the Tax Identification Number (NIF):

The NIF is an essential document to carry out any legal procedure in Portugal, including the purchase of a house. You can obtain it at the Portuguese Tax Office or at the Portuguese Embassy in your country of origin.

2. Opening a Portuguese bank account:

In order to transfer the money for the house purchase, you will need a Portuguese bank account. You can open an account in any Portuguese bank with your passport and your NIF.

3. Search for the property: Contact one of our real estate consultants to receive professional and personalized advice. With our extensive experience and knowledge of the real estate market, we will accompany you throughout the entire search process, from the definition of your needs to the negotiation and signing of the purchase contract.

4. Negotiating the price: Once you have found the home you want to buy, our team of real estate marketing experts will help you achieve a quick and successful transaction at the best possible price in the market, providing you with all the information you need to make the right decisions.
5. Signing the purchase contract: The purchase contract must be signed before a notary public. This document must contain all the relevant information about the purchase-sale, such as the price of the property, the payment conditions and the delivery date.

6. Registration of the property: The purchase of the property must be registered in the Portuguese Land Registry. This is mandatory for the purchase to be valid.

7. Obtaining the residence permit (if necessary): If you are not a European citizen, it is necessary to obtain a residence permit to buy a property in Portugal. You can apply for the permit at the Portuguese embassy or consulate in your country of origin.

Expenses associated with the purchase of a property in Portugal:

• Property Transfer Tax (Impuesto de Transmisiones Patrimoniales (IMT): this tax is applied to all property sales and purchases in Portugal. The percentage of the tax varies according to the value of the property.

• Municipal Real Estate Tax (IMI): This tax applies to all property owners in Portugal. The amount of the tax varies according to the value of the property.

• Notary and registration fees: These fees are paid for the signing of the purchase contract and for the registration of the property in the Land Registry.

• Agency fees, which are usually 2% to 5% of the price of the property.

Tips for buying a property in Portugal:

• Research the Portuguese real estate market before you start looking for a home.

• Compare prices and conditions of different properties before making a decision.

• Negotiate the price of the property with the seller.

• Make sure the property is free of liens and encumbrances.

• Hire a lawyer or a real estate agent to advise you on the buying and selling process.

Engel & Völkers: Your partner to buy a house in Portugal

At Engel & Völkers, we offer you a comprehensive service to help you find the house of your dreams in Portugal. We have a team of highly qualified professionals with extensive experience in the Portuguese real estate market, who will advise you throughout the buying and selling process.

We help you with:

• Property search: With more than 2500 properties in our database, we will present a selection of properties that fit your needs and budget.

• Price negotiation: Our real estate marketing team will help you get the best possible price and keep you informed throughout the process.

• Legal procedures: We will advise you on all the legal procedures necessary for the purchase of the property.

Procedures to buy a house in Portugal

In this post, we have explained the necessary steps to buy a house in Portugal. For more information on this topic, we recommend you to consult a real estate consultant of engel & völkers in this link.