How to Buy a Home in Portugal

Portugal is a popular destination for expats due to its warm climate, beautiful landscapes, and affordable cost of living. Buying a home in Portugal can be a great investment, whether you're planning to live there permanently or use it as a vacation home. However, the process can be complex, especially for foreigners. This guide will provide you with the essential information you need to navigate the Portuguese real estate market and successfully purchase your dream home.

How Do I Find Houses for Sale in Portugal?

There are several ways to find houses for sale in Portugal. Online property portals are a popular choice, offering a wide range of properties across the country. Websites like Idealista, Casa Sapo, and Remax Portugal are commonly used. Local newspapers and real estate agencies are also good sources of property listings. Additionally, hiring a real estate agent can be beneficial as they can provide expert advice and guide you through the process.

Are There Restrictions on Foreigners Owning Property in Portugal?

Portugal is quite open to foreign property ownership. There are no specific restrictions on foreigners buying property, whether they are EU citizens or not. However, non-residents will need to obtain a Portuguese Fiscal Number (NIF) from the local tax office. This number is required for any financial transactions in Portugal, including property purchase. It's also worth noting that while there are no legal restrictions, some banks may have stricter lending criteria for non-residents.

Does Portugal Have an MLS Type System?

Portugal does not have a Multiple Listing Service (MLS) like in the United States. Instead, each real estate agency has its own listings. This means you may need to check with multiple agencies to find all available properties in your desired area. However, many property portals aggregate listings from various agencies, making it easier to search for properties.

Do Brokers Have Licenses and How Do I Know if They are Licensed?

Yes, real estate brokers in Portugal must be licensed. The license is issued by the Instituto da Construção e do Imobiliário (InCI). You can verify a broker's license by checking the InCI's online database. It's important to ensure that your broker is licensed to protect your interests and ensure a smooth transaction.

What Documents are Required When Buying a Home?

When buying a home in Portugal, you will need several documents. These include your passport, Portuguese Fiscal Number (NIF), and proof of income. The property itself must have a Land Registry Certificate (Certidão de Teor), a Habitation License, and a Tax Registration Certificate. If you're taking out a mortgage, the bank will also require a property appraisal.

Do I Need a Lawyer When Buying a Home in Portugal?

While not legally required, it's highly recommended to hire a lawyer when buying a home in Portugal. A lawyer can review contracts, ensure the property is free of liens, and guide you through the legal process. The cost of a lawyer can vary, but it's typically around 1-2% of the property's purchase price.

Do People Typically Buy a Property with All Cash or Take Out a Mortgage?

Both options are common in Portugal. Some buyers choose to pay in cash, especially for lower-priced properties. However, mortgages are also widely available. Portuguese banks typically lend up to 80% of the property's value to residents and up to 60% to non-residents. The exact terms will depend on your financial situation and the bank's lending criteria.

Are There Inspections That Take Place, and If So What is That Process Like?

Yes, property inspections are common in Portugal. They are typically carried out by a professional surveyor, who will assess the property's condition and identify any potential issues. The buyer usually pays for the inspection, which can cost a few hundred euros. The results of the inspection can be used to negotiate the price or request repairs.

What Are Some of the Pitfalls to Avoid When Buying Property in Portugal?

One common pitfall is not thoroughly researching the property and the local market. Make sure to check the property's legal status, potential development plans in the area, and local property prices. It's also important to budget for all costs, including legal fees, taxes, and maintenance costs. Finally, be wary of rushing the process. Take your time to find the right property and negotiate the best deal.

Expats Talk about Real Estate in Portugal

"Rent a small property first do not buy as there are too many hurdles to cover without knowing the Portuguses system. There are also at present unscrupulous estate agencies and unless you know who they are you could be on a hiding to nothing," said one expat living in Tomar.

"I would recommend Gualtar or Trofa as an area of Braga to live in. It's part of the city, yet doesn't have the "city" feel. It's atmosphere is more "suburban" than anything. The city has everything you need to live a life that you've been accustomed to in the US. Additionally, it's location is spectacular because you have the beach 30 minutes to the west, (awsome) Geres mountains 15 minutes to the east and Spain 40 minutes to the North.... you can't go wrong. :)," wrote a member in Braga.

"The same advice related to a move anywhere. You must be here for some time - a month or two - before you select your home. Walk the many neighborhoods, see what amenities are around you, and work with a local realtor who comes recommended. If you like a quiet, more rural life, there are many villages and towns that meet this need. A good urban life is in Lisboa, and the coast just outside of Lisboa offers access to everything. If you're an EU citizen, everything you do is easier. For Americans, the process of getting a residency is twice as complicated and twice as time consuming, so getting advice from someone who has done/is doing it will help reduce your effort and anxiety," commented one expat who made the move to Cascais and Estoril.

"I would come here in the summer before you move. It is over flooded with tourists. I live in Albufeira and travel in the summer. While Albufeira has a reputation as a party town, it is limited to two areas. The quality of life is very high, it empties out quite a bit in the winter but plenty is left open," remarked one expat living in The Algarve.

"Understand what is and is not including in the price. It is common for sellers to take appliances, light fixtures, and much more with them if it is not listed in detail in the offer. Be patient. See many properties to understand the market. It's nearly impossible to do a market analysis of the asking price since historical sales are not easily known. When you find something you like, move quickly. No two sellers are alike. Some are highly motivated and will negotiate. Many will not budge. In Portugal you are basically buying the property "as is." Inspections are almost unheard of. Be prepared for unexpected expenses and repairs after closing," commented one expat living in Matosinhos, Portugal (a suburb or Porto), Portugal.

"Last Fall, we looked in Cascais and other costal towns near Lisbon and in the Algarve. We did purchase a property. Since then, we learned a few things that may be helpful to you. 1. There is no MLS equivalent. Different companies have different sources of properties for sale. 2. Work with more than one real estate agent at the same time. 3. Make sure your agent is licensed. 4. If looking at other than new construction, check for mold and mildew build up, insulation adequacy, Heating and a/c availability. All new construction we looked at was well built and majority had a/c. 5. It doesn't hurt to make an offer, even if the real estate agent says the owner won't sell below list. One thing you might do is purchase health insurance for your trip. Your US health insurance most likely won't cover you. Something you need to check. We ended up buying GeoBlue (tied in with Blue Cross) for our stay in Portugal," mentioned one expat living in Portugal.

"None that I am aware of. The only unusual thing is if you want a mortgage. Most lenders require a mortgage to be paid off by age 70 (some a bit older) so it doesn't help most folks buying at retirement age. We did a cash purchase so everything went quickly from offer to closing in about 3 weeks," commented one expat living in Matosinhos, Portugal (a suburb or Porto), Portugal.

"There is no MLS in Portugal. You need to search a wide variety of consolidating sites (idealista.com) and individual real estate firm sites (Re/Max, K-W, Lars Sonho, etc.) You also want to talk to people in cafes and shops. Many properties sell by word of mouth. We worked with a Re/Max agent in Matosinhos who is herself an expat and specializes in the special needs of expat buyers. Her name is Fabiola Verissimo. She was worth her weight in gold," commented one expat living in Matosinhos, Portugal (a suburb or Porto), Portugal.

"There is no MLS equivalent. Different companies have different sources of properties for sale. Work with more than one real estate agent at the same time. Make sure your agent is licensed," mentioned one expat living in Portugal.