Buying real estate in Portugal is actually one of the best things that you can do right now. It has grown by leaps and bounds over the years. Portugal is even considered to be one of the best places to retire in the world.
Today, property values in Portugal are at a level that makes it an ideal place for investment. But there are several places that you might want to think about putting your money in.
Portugal’s property market is well-established. There is no restriction on the purchase of real estate and most land and property is sold freehold.
The country’s property registry system is centralized and very reliable. The law protects property, property rights, and the right to access and use one’s own property.
Here are a few important things that you should know about investing in this country… and the best places to buy real estate in Portugal.
How To Read Listings
In Portugal, you’ll notice that listings advertise T0, T1, T2, T3 type apartments. All this means is how many bedrooms the unit has. So, T0 is a studio, a T1 a one-bedroom, and so on.
A T1+1 is a little trickier. Usually a T1+1indicates a one-bedroom apartment with an additional room. Usually, the room is an internal one with no windows—but in a pinch, it could be used as another bedroom.
It never hurts to ask what other rooms the apartment contains, just to be sure of what you’re getting. Ask about a separate kitchen, separate living room, any storage spaces, etc.
The Purchase Process
- When you find a property you wish to buy you’ll sign a letter of intent in the presence of a local lawyer.
- Once a price has been agreed to by both parties, the lawyer will write the promissory contract with the seller (contrato de promessa de compra e venda). In order to complete the promissory note, you’ll need the following:
- Property Registration Certificate (Certidão de Teor)
- Property Tax document (Caderneta Perdial)
- License of Use (Licença de Utilização)
- You’ll have to put down a deposit. Usually 10% to 30% of the total purchase price. You may need a lawyer to negotiate a deposit in the lower end.
- The deposit is forfeited if the buyer does not proceed. If the vendor withdraws from the transaction, double the deposit is paid back to the buyer.
- The buyer pays the remaining balance of the purchase price, transfer tax (imposto de sisa), and any attorney or notary fees.
- Once everything has been paid… usually within about four weeks of signing the promissory note… you’ll be able to complete and sign the deed (escritura de compra e venda).
- Finally, will have to register the deed at the public land registry and tax office. This should be done as soon as possible after signing the deed.
1. Buying Real Estate In Lisbon
The first reaction of most people who are deciding on buying real estate in Portugal is to focus on Lisbon. Because this is the better known and more popular city in the country.
But with a little more research it turns out that it is not the best financial option. It all depends on price and return on investment.
Lisbon’s prime market prices are already around 10,000 euros per square meter… very close to similar markets like Madrid and Barcelona, indicating that they are close to a valuation ceiling.
For entrepreneurs, Lisbon also provides the best opportunities with the largest and most qualified consumer market.
But the quality of life here, along with the fantastic atmosphere, is great. Lisbon has all the facilities available that you would expect from a top-notch, well-developed city… This is why this is one of the best places to buy real estate in Portugal.
Transport System
The transport system in Lisbon is excellent. There’s a metro network, a tram system, funiculars, urban buses and ferries running throughout the city. This is why you won’t find it difficult to travel anywhere in the city.
Things To Do
Lisbon’s cultural life is rich and busy. As a European capital, the city offers a diverse selection of concerts, theatre, art museums, music festivals… and just about any other cultural activity, you could think of.
Go to the matches for Sporting Lisbon, held at the Jose Alvalade Stadium. Or check out the Teatro Nacional de Sao Carlos, a 201-year-old theater.
There are plenty of exquisite restaurants here as well. Lisbon is home to countless bars, restaurants, and pubs. Everything is easily accessible by bus, car, or on foot.
Lisbon’s Neighborhoods
In terms of neighborhoods, there’s a wide variety to choose from. Each one has its own special character and charm. In Lisbon, you’ll find a vast array of home styles and prices to suit all tastes.
Alfama And Graça
The capital’s oldest and most typical neighborhoods.
The prices in these two zones vary according to what kind of home you choose. A one-bedroom would normally start around 370 euros and go up to 1,300 euros.
If you’re searching for a two-bedroom, 500 euros is generally the minimum price, going up to 1,600 euros. Three bedrooms go from about 750 euros to 2,100 euros.
Lapa And Campo De Ourique
These are the most vibrant residential districts. With a range of shops, grocery stores, and small markets. These two neighborhoods are great if you want a real community feeling.
For a one-bedroom, prices fluctuate between 450 and 500 euros at the low end and 1,250 euros at the high end. For two-bedrooms, average prices are between 550 and 1,500 euros. And three bedrooms go from about 700 up to 2,600 euros.
Things To Beware Of
A lot of people live in Lisbon, and theft and robbery are commonly reported. So you will need to take security steps to protect your property.
Is It Easy To Sell Your House?
Definitely! Because it’s such a big city, you won’t find it difficult at all to buy and sell property.
Click here for a testimonial of a couple who is enjoying an early retirement in Lisbon.
2. Buying Real Estate In Porto
Porto still practices inviting prices with space for appreciation (2,500 to 5,000 euros per square meter).
For every 100 euros invested in a property for tourists, expect to get on average 12 to 14 euros of annual revenue from the daily rates sold in Porto.
A capital of 100,000 euros will generate 20-year revenues of 260,000 euros in Porto. And the 20-year yield (gross return on invested capital) will be 260% in Porto…
Since the arrival of low-cost airlines, Porto has almost tripled the number of tourists. More than 11 million passengers are already passing through the new and modern airport.
It is a large city with strong industry and agriculture, reaching 1.7 million inhabitants in the metropolitan region.
It’s no wonder why Porto is one of the best places to buy real estate in Portugal. Liquidity is on the rise. This means you will be able to find a good home much easier than if you were buying property in Lisbon.
Plus, Porto is much better for those who want competitive advantages in cost and labor.
Transport System
Porto has a diverse and extensive support system. Even though the city is small and you can explore it on foot, you can easily take a bus or a local taxi.
Things To Do
There are plenty of things to do in Porto. Visit the Clerigos Tower, the Crystal Palace Gardens, or the Serra do Pilar.
Is It Easy To Sell Your House?
It depends on the price you put up. Porto’s real estate market is not as active as Lisbon’s, so you will have to make an effort to sell off your property.
3. Buying Real Estate In Algarve
The Algarve is a popular summer rental market. A range of options exists in both municipalities.
Long-term rentals represent a small percentage of the total rental market and private apartment and villa rentals.
These owners often only place properties on the market as an afterthought following a poor summer season… compete with long-stay hotel accommodation that offers various guest services that are not available in private property.
Private rental is often a cost-effective and flexible way to have time to make permanent decisions.
But most rental properties are summer rentals—the most popular rental sites continue to be large property portals such as Homeaway, Holiday lettings, and Rightmove Overseas.
Owners attempting to advertise properties as winter rentals inflate prices to hedge any loss of summer rentals.
As a general rule, the winter rental values of properties in popular tourist areas are similar to the weekly values in the summer.
Transport System
The primary mode of transportation throughout Algarve is public transport. Buses run every 30 minutes throughout the area.
Things To Do
There are fantastic places that you can visit, such as the Ponta de Piedade, the Praia da Falesia, and Cape St. Vincent.
Things To Beware Of
There are strict regulations about who can buy property, so best to talk to your real estate agent.
Is It Easy To Sell Your House?
No, the demand for property is low in this area.
4. Buying Real Estate In Cascais
Cascais is a municipality in the Lisbon District of Portugal. By 2011, the population was just above the 200,000 marks, and the place is a very important tourist destination.
Living near the marina is an excellent idea for people who want a gorgeous coastal view. But you need to know that property values continue to rise as you get closer to the center or nearer to the marina.
The municipality is considered as one of the wealthiest in all of Portugal. So the property values that you might be quoted will be some of the highest that you will ever pay in the country.
If you’re looking for a high-end property, Cascais is one of the best places to buy real estate in Portugal.
It’s important that you decide whether buying a property in Cascais is worth the money or not. A lot of people buy property because they want to live in it, while others buy it as a means of protecting their investment. So if you can afford it, you can rest assured that the value of your property is only going to rise in Cascais.
Transport System
The transport system relies solely on local buses and taxis.
Things To Do
There are many things that you can do and places that you can visit here, such as Museu Condes de Castro, the Praia da Rainha, and of course, the Old Centre of Cascais.
Is It Easy To Sell Your House?
Cascais is situated near Lisbon, so it’s not going to be difficult for you to sell off property here.
Cost Of Living In Portugal
The costs of living in Lisbon are higher than Porto and Algarve due to housing. The rent of an apartment with three bedrooms in the city center costs an average of 1,700 euros in Lisbon, Oporto, and 1,200 euros in Faro (Algarve’s main town).
The budget of a family with 2 children will be 40% more expensive in Lisbon and 16% higher in Porto, both compared to Algarve.
The budget is lower on housing outside central Lisbon and Porto. Renting a three-bedroom apartment in the Almada region (Greater Lisbon) costs 750 euros. In Vila Nova de Gaia (Greater Porto), 880 euros.
It is not the same experience as living in the city center, as it always involves crossing a bridge to get to where everything happens… but it is an affordable option for those who want to be close to the bustling life of major Portuguese cities and a good decision of where to buy Portugal property.
Read more about Portugal’s cost of living here.
