Legal and Financial Tips for Buying Apartments in Portugal
Buying an apartment in Portugal is a big step and an exciting journey. Whether you're looking for a holiday home, a retirement place, or a good investment, Portugal has many great options. With beautiful cities, friendly people, and a strong rental market, it’s no surprise that many people are searching for apartments for sale in Portugal.
But before you sign any papers, it’s important to understand the legal and financial steps involved. Here are some clear and simple tips to help you make the right decision.
1. Choose the Right Location
The first thing to consider is where in Portugal you want to buy. Big cities like Lisbon and Porto offer a busy lifestyle and great rental income, but prices are higher. Coastal towns like Lagos, Faro, and Albufeira are great for holidays or retirement and may offer better value. Research the area, visit if possible, and think about your long-term goals.
2. Hire a Trusted Lawyer
Working with a local Portuguese lawyer is very important. A lawyer will check if the property is legal, has no debts, and is ready for sale. They can also explain contracts and help with the paperwork. Always choose a lawyer who speaks your language and has experience with foreign buyers.
3. Get a Portuguese Tax Number (NIF)
Before you can buy any property in Portugal, you need a NIF. This is a tax number that allows you to open a bank account, pay taxes, and sign property contracts. You can get a NIF at a local tax office or through your lawyer.
4. Open a Portuguese Bank Account
A local bank account is needed to pay for the property, handle fees, and receive rental income (if you rent it out). Opening an account is usually simple. You will need your passport, NIF, proof of address, and possibly proof of income.
5. Understand the Costs Involved
The price of the apartment is not the only cost you will pay. You should also plan for:
IMT (Property Transfer Tax) – This is based on the value of the apartment. It ranges from 1% to 8%.
Stamp Duty (Imposto de Selo) – Usually 0.8% of the purchase price.
Notary and Registration Fees – Around 1,000–1,500 euros.
Legal Fees – Varies depending on your lawyer.
Agency Fees – Usually paid by the seller, but always check.
These extra costs can add 6% to 10% on top of the property price. Always ask your lawyer or agent for a full breakdown before buying.
6. Reserve the Property
Once you find the right apartment, you can reserve it by signing a Promissory Contract (Contrato de Promessa de Compra e Venda). You’ll also pay a deposit, usually 10% to 30% of the total price. This contract protects both the buyer and the seller and sets a date for the final deal.
7. Sign the Final Deed
The final step is signing the Deed of Purchase (Escritura de Compra e Venda). This happens at a notary office. Once this is done, the apartment is officially yours. The sale is then registered in your name at the Land Registry.
8. Check for Rental and Residency Options
Many people buy apartments for sale in Portugal to rent them out or move in later. If you plan to rent, check the local rules. In some areas, you need a rental license (AL – Alojamento Local). Also, owning property may help you apply for residency under Portugal’s visa programs, like the D7 Visa or Golden Visa.
9. Understand Mortgage and Financing Options
If you’re not buying with full cash, many banks in Portugal offer mortgages to foreign buyers. You can usually borrow up to 70% of the property’s value. Interest rates are low, but each bank has different terms. A mortgage broker or lawyer can help you compare offers and choose the best one.
10. Know Your Tax Responsibilities
As a property owner, you will pay IMI (Municipal Property Tax) every year. This is based on the property value and usually ranges from 0.3% to 0.8%. If you rent out your apartment, you must also declare rental income and pay tax on it. A local accountant can help with this.
11. Work With a Reputable Real Estate Agent
A good agent can help you find the right apartment, explain the buying process, and connect you with other helpful professionals. Look for agencies with experience working with international clients. They should be able to answer your questions clearly and guide you through every step.
12. Plan for the Long Term
Think about how long you want to keep the property. Will you use it for vacations, live there full-time, or sell it later? Understanding your long-term goals can help you choose the right apartment and location. It also helps you decide whether to buy a new apartment, a resale unit, or one that needs renovation.
Final Thoughts
There are many wonderful apartments for sale in Portugal, from city flats to seaside homes. The process is clear and safe, but it’s always better to have the right help. With good legal and financial advice, you can enjoy a smooth buying experience and avoid surprises later.
Portugal welcomes foreign buyers and offers a high quality of life, great weather, and excellent investment opportunities. Take your time, ask questions, and enjoy the journey of finding your perfect apartment.