Guide to Portuguese property buying and investing as a foreigner

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The Portuguese property market is a gold mine of opportunity for people looking to retire to a warmer climate and enjoy a calmer way of living and for investors looking for consistent and solid returns.

But like buying property anywhere else in the world, there’s some important information and administration responsibilities you’ll need to know about to make the purchase of property for retirement or investment as easy as possible.

Here’s a quick introduction to buying and investing in Portuguese property as a foreign national.

Does Portugal have restrictions on foreign property investment?

No, Portugal has no restrictions on the type of property foreign nationals can buy or invest in.

If anything, it’s the opposite.

Portugal has one of the most welcoming attitudes and environments to attracting foreign investment than anywhere else in Europe.

The government has proactively worked to create the environment for foreigners to come to Portugal and invest their money and has some of the best visa schemes in the world.

It’s Golden Visa scheme even offers non-EU nationals the opportunity to gain EU citizenship within five years via an accelerated scheme based on investing in property.

What do foreigners need to buy Portuguese property?

Proof of funds is the first thing foreign investors need to have. You don’t need funds to buy property outright in Portugal as it’s possible to purchase a property with a mortgage.

And while there will likely be a cap on the amount you can borrow for a mortgage as a non-Portuguese resident, Portuguese banks usually don’t have any issues lending to foreign investors for a mortgage provided you have proof of funds.

What foreign investors also need is a Portuguese tax number before you can complete any purchase and you’ll also need to have proof of this tax number.

You can arrange this tax number yourself through a local tax office or financial department with proof of your ID, or you can have a lawyer arrange it for you.

Non-EU residents will also need to appoint an official tax representative to oversee their tax situation from any and all assets purchased in Portugal.

This can also be arranged personally or it can be arranged through a solicitor.

What documents do foreigners need to buy property in Portugal?

Once you’ve found a property and agreed a price, then these are the documents needed to be able to complete the purchase:

  • Photo ID: Your passport should be sufficient for this
  • Contrato-Promessa De Compra e Venda (CPCV): A purchase and sale agreement that legally binds you and the seller to going through with the sale
  • Energy certificate for the property: Having an energy certificate for a Portuguese property is mandatory. A qualified engineer will assess the property to determine its thermal efficiency and issue the certificate
  • Imposto de Selo (payment of the stamp): This is a equivalent of paying stamp duty on a sale in the UL
  • Caderneta Predial (land register): When you own the property you’ll be added to the local land register as evidence of your purchase

What’s the process of buying a house in Portugal?

Arrange a mortgage (if needed): If you’re planning on buying a property with a mortgage you’ll need to see how much you’re able to take out and which type of mortgage best suits your situation. This will obviously impact your budget.

Make a down payment: Once you’ve negotiated and agreed a price with the seller you’ll need to make a down payment to secure the property and take it off the market while you complete the sale. The specific costs will depend on the type and price of the house you buy.

This deposit is usually kept with the solicitor until completion.

Sign the CPCV: This is the property purchase and sale agreement that will be signed by both you and the seller. This is a legally binding document that commits you to going through with the sale.

Sign and notarize the property deed: Finally, you’ll sign the property deed which confirms you as the new owner. In Portugal you’ll need to get this notarised.

Portugal remains a solid investment choice for foreigners

Even despite Brexit and the challenges of covid, Portugal remains a hotbed for foreign investment and the government has continued to create and promote an environment that would appeal to these investors.

Whether looking for a retirement home or an investment opportunity or rental, the process of securing funding and buying property in Portugal is straight forward.

And the returns that stand to be made make it a strong investment opportunity.