Blog • Published on:May 29, 2025 | Updated on:May 29, 2025 • 19 Min
In 2025, Portugal's real estate market continues to attract international attention, with property prices rising by 10.8% year-over-year, reaching a median of €1,819 per square meter in the third quarter of 2024. This growth is fuelled by factors such as foreign investment, a thriving tourism sector, and a limited housing supply.
However, this surge has led to affordability challenges for local residents, prompting government initiatives like permitting construction on rural land to increase housing availability. For investors, this dynamic presents both opportunities and complexities, making it crucial to understand regional trends, legal requirements, and financial considerations.
Portugal remains a reliable magnet for global property buyers for three key reasons: stable economic performance, consistent capital appreciation in real estate, and one of the most buyer-friendly legal systems in the EU.
Despite a few regulatory changes in recent years, the fundamentals haven’t changed, real estate in Portugal continues to offer predictable returns, especially in urban and tourist-heavy areas.
The country’s real estate sector contributes significantly to GDP, driven by both domestic demand and a growing share of foreign investors. Even as remote work culture matures and digital nomadism becomes more structured, places like Lisbon, Cascais, and Lagos remain hotspots thanks to strong internet infrastructure, vibrant expat communities, and relatively low living costs by Western European standards.
In 2025, Portugal’s property market is characterized by:
As of Q1 2025, the average price per square meter in Portugal stands at approximately €1,960, reflecting a year-on-year increase of 8.7%. Prices vary widely depending on location:
Lisbon continues to dominate in price, but its growth has slowed slightly due to affordability limits. Meanwhile, secondary markets like Braga and Évora are heating up, especially among remote workers and early investors looking for higher appreciation potential.
Investors are increasingly looking beyond Lisbon and Porto. Coastal towns like Nazaré and Sesimbra are seeing increased inquiries, and interior gems like Viseu are making headlines for offering double-digit rental yields on low-cost acquisitions.
With mortgage conditions tightening, more locals are turning to rentals. This is boosting rental yields, especially in university cities like Coimbra and expat havens like Lagos.
Although construction was slow to recover post-pandemic, 2024 saw a 14% increase in residential building permits, signalling more inventory in the pipeline and possibly moderating prices in some overheated zones.
Despite regulatory pushbacks in Lisbon and Porto, the short-term rental market remains strong in places like the Algarve and Madeira, where tourism continues to outperform 2019 pre-pandemic levels.
Most buyers are looking for a mix of lifestyle utility and investment yield, with some using property as a stepping stone for residency or retirement in the EU.
Foreigners can freely buy property in Portugal, but you'll need to gather a few essential documents before initiating the process:
A power of attorney (POA) can also be arranged for buyers who want to authorize a lawyer to act on their behalf throughout the process, ideal for non-residents who cannot travel frequently.
Here’s a step-by-step overview of how the property purchase process typically works:
Hiring a lawyer (advogado) is not mandatory by law, but it’s highly recommended. Here’s why:
Most foreign investors work with a Portuguese-speaking legal team or an English-speaking law firm specializing in real estate transactions.
As of 2025, residential real estate in high-density urban areas like Lisbon, Porto, and much of the Algarve is no longer eligible for the Golden Visa. This change came into effect in late 2023 as part of housing reform measures.
However, real estate in designated interior regions and islands such as Madeira and the Azores, as well as certain commercial properties, remains eligible.
Read more about the Golden Visa and how real estate investment can help you qualify in our blog: Portugal Golden Visa Program – What You Need to Know
To qualify for a Golden Visa through real estate, the following thresholds apply:
Important: “Low-density” areas are defined by population and development criteria set by the Portuguese government. A qualified legal representative can validate whether a property fits the criteria.
Eligible property types for Golden Visa include:
Residential apartments in Lisbon, Cascais, or Porto no longer qualify unless they fall under specific exemptions (such as historical restoration in low-density zones).
Here’s how the Golden Visa application typically proceeds:
Buying property in Portugal comes with several one-time transaction costs and ongoing obligations. These vary depending on the property’s value, location, and whether it's new or resale.
Let’s break this down further.
The IMT (Imposto Municipal sobre Transmissões) is a progressive tax based on the property's price and purpose (primary residence or investment). It’s calculated as:
For luxury properties (over €1 million), a flat rate of 7.5% applies.
For rural land or commercial property, a flat 6.5% IMT is usually charged.
Tip: IMT is paid before the deed is signed. Your lawyer or notary usually handles this on your behalf.
Stamp duty (Imposto do Selo) is 0.8% of the declared property value. It applies to all transactions, regardless of whether the buyer is a resident or not.
There may also be additional stamp duty if you’re taking out a mortgage loan, typically
0.6% on the loan amount.
These are mandatory administrative costs tied to the official transfer of ownership:
Most of these can be bundled if using a lawyer or full-service conveyancer.
Lisbon remains Portugal’s financial and tech capital. While prime areas are expensive, nearby commuter towns offer better value and rental yields. Cascais offers a strong international school network, making it popular among families relocating from the U.S., France, and Brazil.
Market Note: Properties in Lisbon’s historic districts are still in high demand for long-term rentals, especially from corporate tenants and embassy staff.
Porto offers a lower entry price compared to Lisbon with an equally vibrant cultural scene and strong tourism market. Vila Nova de Gaia, just across the Douro River, is seeing fast infrastructure upgrades and is considered a “buy now” opportunity.
The Algarve continues to thrive due to year-round sunshine, an English-speaking community, and well-developed tourist infrastructure. Lagos in particular has become a hotspot for Americans and Canadians seeking a coastal base with rental income potential.
Madeira is becoming a strategic Golden Visa location, especially as it retains eligibility under Portugal’s updated rules. It appeals to buyers seeking tax incentives, a mild climate, and relatively untapped development opportunities in the eco-luxury segment.
Investor Insight: Properties in Madeira can be more profitable during winter months due to the island’s subtropical climate and rising off-season tourism.
Residential real estate remains the dominant choice for international buyers, particularly those focused on lifestyle upgrades, long-term stays, or stable rental income.
Investor Insight: In smaller towns, demand for high-quality rentals is rising due to improved infrastructure and remote work trends, making well-renovated homes a lucrative niche.
Discover what it’s really like to live in Portugal, from cost of living to lifestyle tips, in our full guide: Living in Portugal: An Expat Guide
While less publicized, commercial property is increasingly seen as a strategic move, especially since Golden Visa rules now exclude most residential real estate in Lisbon and Porto.
Buying land in Portugal opens up long-term potential but also comes with strict zoning laws and bureaucracy, especially in protected rural areas.
Planning Tip: If your plan includes building from scratch, factor in 12–24 months for approvals, licensing, and construction, especially in protected heritage or coastal zones.
Yes, non-residents can secure mortgages from Portuguese banks. In fact, many foreign buyers opt to finance part of their property purchase locally, especially when interest rates are competitive and capital preservation is a priority.
Most banks will finance up to 70% of the property’s value for non-residents. Residents (or those planning to relocate) can often access up to 90% financing, depending on income and creditworthiness.
To apply for a mortgage in Portugal, you’ll need to provide a clear picture of your financial situation. Expect to submit:
Banks assess debt-to-income ratio, aiming for no more than 35%–40% of your monthly income going toward total debt repayment (including the new mortgage).
Tip: Most banks require that you open a local account with them before issuing a mortgage.
As of early 2025, mortgage interest rates in Portugal range from 3.1% to 4.8%, depending on the loan type and borrower profile:
Loan terms typically range from 5 to 30 years, with a preference for shorter terms for older buyers (age cap is usually around 70–75 at final repayment).
While bank mortgages are the most common, a few other paths exist:
Be cautious: Mortgage approval can take 4–8 weeks, and offers are time-limited. Always align property negotiations with financing deadlines to avoid penalties or lost deposits.
Portugal’s rental market is thriving in 2025, driven by two main factors: growing expat demand and tighter mortgage conditions for local buyers. With more people choosing to rent rather than buy, especially in urban and university-heavy areas, landlords are seeing rising occupancy rates and solid rental yields.
Short-term rentals (like Airbnb-style listings) are still strong in tourist zones, though regulated, while long-term rentals have surged in popularity in Lisbon, Porto, Braga, and Coimbra due to a growing digital nomad presence and local student populations.
Example: A one-bedroom apartment in central Lisbon can earn €1,200–€1,500/month in long-term rent, or €80–€120/night as a short-term rental, depending on the season and furnishing.
Whether you're living in Portugal or abroad, hiring a property management company is highly recommended, especially if you're operating short-term lets or don't speak Portuguese.
Typical services include:
Most full-service agencies charge:
Tip: Some firms offer multilingual support and bundle tax representation, which is a bonus if you’re managing multiple properties remotely.
All rental income in Portugal is taxable, whether you're a resident or not.
Learn how to reduce your tax burden legally with Portugal’s NHR program in our blog: NHR Tax Regime in Portugal – Benefits and Requirements
Pro tip: Always consult a Portuguese tax advisor to ensure you’re deducting all eligible expenses and complying with municipal short-term rental license rules (Alojamento Local or "AL" registration).
Whether you're buying a vacation home, rental investment, or applying for a Golden Visa, the purchase process in Portugal follows a well-defined path. Here’s how to move from search to ownership without surprises.
Start by identifying your goals: lifestyle, investment, Golden Visa, or a combination. Then narrow down the location, budget, and property type.
Tip: Properties in Portugal often sell quickly if priced right, act fast if something matches your checklist.
Once you’ve chosen a property:
Important: Ensure all terms are reviewed by your lawyer before transferring any funds.
This is the legally binding agreement between buyer and seller. Key elements include:
At this point, due diligence begins, your lawyer will check title deeds, legal registrations, zoning approvals, and confirm no liens or debts are attached to the property.
The final deed is signed in front of a notary and witnessed by legal representatives. You’ll need to:
The notary registers the deed with the Land Registry (Registo Predial) and Tax Office (Autoridade Tributária). Ownership is now legally yours.
After closing, don’t forget to:
Optional but smart: Hire a local accountant or fiscal representative, especially if you’re non-resident, they’ll help with annual reporting, tax optimization, and compliance.
Portugal isn’t just a place to buy property, it’s where many investors are building an entirely new chapter of life. Whether you're drawn by the country’s mild climate, thriving expat communities, or the growing appeal of second residency in the EU, real estate remains one of the most strategic ways to secure your place in the country’s future.
In 2025, we’re seeing a shift toward purpose-driven investment, where buyers aren’t just chasing returns, but seeking resilience, residency, and real-world utility. From modern apartments in Porto to hillside villas in Madeira, Portugal offers something uniquely flexible for every profile, digital nomads, retirees, entrepreneurs, and global families alike.
If you're considering investing in Portuguese property to gain residency, access Europe, or secure a foothold in a stable and welcoming market, Savory & Partners can help you navigate the legal, financial, and logistical landscape with confidence.
Reach out today to explore how your next property purchase can open doors, not just to Portugal, but to an entire continent.
Yes, Portugal places no restrictions on foreign property ownership. Whether you're an EU or non-EU national, you can purchase residential or commercial real estate without needing a local residence permit. However, a Portuguese NIF (tax identification number) and a local bank account are mandatory to complete the transaction.
Yes, but with limitations. As of 2024, only commercial properties and residential real estate located in designated low-density interior areas or islands (Madeira, Azores) qualify for the Golden Visa. Popular cities like Lisbon, Porto, and much of the Algarve are excluded from eligibility.
The minimum investment threshold is €500,000 for most eligible properties. This drops to €350,000 if the property is more than 30 years old or in an urban rehabilitation zone, and further to €280,000 in low-density municipalities. These properties must still meet zoning and registration criteria.
You will be required to pay IMI (Imposto Municipal sobre Imóveis), the annual municipal property tax. Rates typically range between 0.3% and 0.8% of the property’s tax value (not market value), depending on the municipality and whether the property is urban or rural.
Yes, there are no restrictions on renting out your property, whether long-term or short-term. However, for short-term rentals (under 30 days), you must apply for an Alojamento Local (AL) license, which may not be available in some urban areas due to local housing laws.
Assembleia da República. (2024). Lei n.º 56/2023 – Regime Jurídico de Entrada, Permanência, Saída e Afastamento de Estrangeiros do Território Nacional. Retrieved from https://dre.pt/dre/detalhe/lei/56-2023-213909528
Serviço de Estrangeiros e Fronteiras (SEF). (2025). Autorização de Residência para Atividade de Investimento (ARI). Retrieved from https://www.sef.pt/pt/pages/conteudo-detalhe.aspx?nID=40
Autoridade Tributária e Aduaneira (AT). (2025). Imposto Municipal sobre Imóveis (IMI). Retrieved from https://www.portaldasfinancas.gov.pt/pt/informacaoContribuintes/imi
Instituto Nacional de Estatística (INE). (2025). Estatísticas de Preços da Habitação ao Nível Local – 1º Trimestre 2025. Retrieved from https://www.ine.pt/xportal/xmain?xpid=INE&xpgid=ine_publicacoes
Câmara Municipal de Lisboa. (2024). Regras do Alojamento Local. Retrieved from https://www.cm-lisboa.pt/viver/habitacao/alojamento-local
Written By
João Silva
João Silva is a seasoned consultant in the global mobility industry with over 12 years of experience. Specializing in European residency and citizenship by investment programs, João has assisted hundreds of high-net-worth clients in securing their second citizenship through strategic investments in real estate and government bonds.