Is Buying Property in Portugal a Smart Move?
Have you been looking for a forever home where you can relax in the sun or go for a dip in the sea whenever you want? Buying a property in Portugal might be the thing you’re looking for.
Portugal is the land of Football and wine, it’s also known for its welcoming locals, beautiful beaches, and low cost of living.
This has made Portugal a very popular destination for many expats who are looking to settle.
But is it really a smart choice?
In this blog post, we will see why you should invest in a property in Portugal and why it is the best choice you’ve ever made. Also, learn about Boosting Property Management Efficiency by reading this article.
Why You Should Consider Buying Property in Portugal
We all know Portugal as the country of Football, wine and beauty. And with welcoming locals and a low cost of living, it is one of the most popular destinations for many wanderlusters.
In the past couple of years, there has been a huge rise in the property market in the country. This is especially true for places like Lisbon, Porto and Algarve.
In fact, according to a report, the market is supposed to grow by more than 8.7% in 2024 alone.
There is a huge demand for luxury real estate in the coastal areas and tourist spots.
But, this is not the only reason you need to think about buying property in Portugal.
Many other things make the appeal of buying a property in Portugal look so enchanting:
- It is a Safe Country With a Strong Sense of Community
You know, aside from the mild climate and stunning landscape, Portugal is a pretty safe country. And not to mention the people are friendly too. This makes it one of the most ideal places you can move your family to. - You Can Get Tax Incentives if You Move In
Portugal has a pretty great tax benefit for foreigners who move in, as in them any foreigner can claim a tax benefit for up to 10 years if they attain a Non-Habitual Resident (NHR) status. - You’ll Have Some Petty Awesome Investment Opportunities
Aside from having a strong tourism industry, Portugal also has a thriving real estate sector. And that’s not all, the government also has a great supportive policy and tax incentives if you’re a foreign national.
DID YOU KNOW?
Bertrand Bookstore in Lisbon’s Chiado district. The bookstore was established in 1732. Its exterior façade is a spectacular display of mosaic tiles, worth admiring in their own right.
Understanding Property Types in Portugal
So, should you really invest in a property in Portugal?
Well, the short answer is yes! One of the most endearing qualities of Portugal is that there are no restrictions for foreigners who want to buy a home in the country.
This means that you can buy a home in any part of the country, but you first need to decide on what type of property you want to invest in.
1. Urban Properties
These are the properties you can find in metropolitan areas or inside city limits. These places are managed by city corporations and are connected to most major amenities and transport hubs.
2. Coastal Properties
If you’re more interested in taking in the views of the ocean sunset, these are the type of property you want. These are large or small homes that are built along the coastline, where you can enjoy the city or ocean view whenever you want.
3. Rural Properties
If the hubbub of the city is not your thing, you get a rural property. These homes are built in the countryside where you can take in and relax in nature. You can even try your hand at farming if it suits your fancy.
What About Taxation While Investing in a Real-Estate?
If you’re thinking of buying a property in Portugal, you need to understand that just like any other country, there are some tax implications and fees involved when you buy a property.
So, how much tax do you need to pay for buying a house in Portugal?
You know, when you buy a property in Portugal, the first tax you’ll see on your bill is the property transfer tax also known as the IMT (Imposto Municipal sobre Transmissões Onerosas de Imóveis).
The tax rate will also be different based on the type of property you plan on buying. For example, residential IMT will be a lot different from the commercial IMT.
Here’s a basic rundown of how the property tax is calculated:
- For property prices lower than and up to €97,064 the rate can be near to zero for permanent residences.
- And from €97,064 to €301,688 the rate increases as the amount goes up.
- You need to pay a flat 8% if you’re buying a second home or a non-residential property and yes this applies even if you’re buying for an Airbnb.
- If the property is valued above €603,269, the tax rate maxes out at 6%
Aside from this you also need to keep track of any stamp duty (Imposto de Selo) of 0.8% of the sale price or property value. You would need to pay the higher amount of the two.
If all this is confusing you, you can also use a Portugal IMT Tax Calculator to calculate your tax rate with just a couple of clicks.
Popular Regions for Property Investment in Portugal
You know, buying a property in Portugal is like a journey in and of itself. And no matter where you pick, in the heart of the city, on the sandy shores, or way off in the countryside, Portugal will make you fall in love.
Here are some of the most popular destinations for buying property in Portugal
- Lisbon
It is the heart and soul of Portugal and is also one of the cheapest European capitals. - Porto
This mysterious fishing town is a mix of rural and urban, with a rich history and fun places to explore. - The Algarve
This place is known for its beautiful sandy beaches and ocean-view villas. - The Silver Coast
It’s as beautiful as Algarve but the prices are a lot more affordable.
During April 2024, the average price of properties in Portugal rose by 7.04% to €1,596 per sq meter. These prices have been rising steadily annually by about 9.2% annually from 2017 to 2024.
Conclusion
If you’re thinking of buying your dream European country home, Portugal might just be the best option for you.
It is a pretty beautiful country with friendly people, lots of places to explore, wine and football.
Plus, Portugal is one of the most affordable countries in all of Europe and that’s not all, this place also gives you a lot of tax incentives if you’re thinking of moving in and buying a property.
And, while the tax laws can be a bit complex, you do have the option to use a tool like Portugal IMT Tax Calculator to make doing your taxes a breeze.
