How to buy a house in Portugal as a foreigner
The requirements to buy a house in Portugal as a foreign national
Buying a house in Portugal as a foreigner is not complicated, but there are some components to consider, such as the NIF number, for example. Also, it is necessary to understand the documents that you need to evaluate before completing the purchase, how to sign a purchase agreement and how to get a bank loan.
Who is allowed to buy a house or property in Portugal?
Anyone, regardless of nationality, can buy a property in Portugal. The only requirement is to have a tax number (NIF) valid in Portugal. The buying process of a home in Portugal is even easier for EU nationals, due to the free movement of persons and capital, than for non-EU nationals.
Applying for a NIF number in Portugal is free and can be obtained by residents and non-residents. Foreign citizens only need to show a valid passport. For EU-nationals, an identity card of any EU-member state is sufficient.
The buying process
The acquisition of real estate can involve a lot of documentation and bureaucracy, so the process often goes through specialized intermediaries such as lawyers and licensed real estate agents. Nevertheless, it is useful to know which documentation is required for the purchase of a property in Portugal.
Important documents to review before you buy the property
Before buying a property in Portugal, whether you are Portuguese or Foreign, there are certain documents that must be evaluated to ensure that you are not faced with any unpleasant surprises after completing the purchase:
1) Technical data sheet of the property (Ficha técnica de habitação - FTH)
This document contains the technical and functional characteristics of a property. It is possible to request a copy from the town hall of the respective place. This document is required for buildings built, or which have undergone conversion, extension or renovation works after March 30, 2004, the date of entry into force of the Legislative Decree on this matter.
2) Certificate of Ownership (Certidão do Teor)
The Certificate of Ownership of real estate can be obtained from the registry office of the relevant municipality and makes it possible to validate the name of the real owners of a property, the composition and any associated attachments.
3) Land Register (Caderneta Predial)
The Land Registry makes it immediately possible to understand the fiscal context of the property, such as the municipal tax to be paid (IMI - Imposto Municipal sobre Imóveis). It can be requested from the tax authorities, both physically and digitally.
4) Energy Certificate
The energy certificate analyses the energy performance of a building, on a scale from A+ (highly efficient) to F (highly inefficient), and is issued by technicians certified by the Energy Agency. This certificate is mandatory for any property placed on the property market (purchase or rental) and it is the responsibility of the selling or renting owner to obtain it.
The promissory sales agreement
The following is stipulated in the promissory sales agreement:
- Agreed value for the purchase of the property and method of payment;
- Detailed identification of the buyer and seller;
- Property data, including typology, location and building description;
- Amount of the deposit or agreed advance (if applicable);
- Deadline for signing the final deeds and possible consequences if this is not done as agreed;
- Point indicating that the property is traded free of non-discriminatory charges;
- Residential or building permit.
Real Estate prices in the different regions
Lisbon is by far the most expensive region in Portugal to buy property, with an average price of €455,885 or €2,787.11/sqm.
The city of Porto, the Algarve region and the island of Madeira follow, with €299,328 (€1,527.88/sqm), €421,255 (€2,081.24/sqm) and €417,588 (€2,114.84/sqm), respectively.
At the other extreme, Portalegre, Guarda and Castelo Branco are the district capitals with the cheapest housing, with prices per square meter under €700.
As a foreign national, can I obtain a loan or mortgage in Portugal?
This is one of the most frequently asked questions we get, and the answer is 'yes'! Foreigners can get a bank loan to buy real estate in Portugal.
However, the percentage of the purchase price for which most banks are willing to finance for foreigners is generally a maximum of 70%.
In most cases, the debt burden cannot exceed 30 or 35% of the foreign citizen's income. The repayment term is usually 5 to 40 years.
Non-EU nationals can obtain a residence visa by buying real estate
Foreigners who buy high-quality housing in Portugal are entitled to a special residence permit.
Buying property worth €500,000 or more in Portugal grants non-EU citizens a residence permit for investment activity, also known as a "golden visa".
This residence permit also makes it possible to travel through the Schengen area without a visa and to benefit from family reunification.