Navigating Portuguese Property Purchases: Legal Tips for Foreign Investors
Portugal remains one of the most attractive real estate markets in Europe, offering stable growth, quality of life, and a welcoming environment for international investors. From the cobbled charm of Lisbon to the golden beaches of the Algarve, foreign buyers continue to flock to Portugal — many of them choosing to purchase residential or rental property. But buying property abroad isn’t simply a matter of signing a contract and picking up the keys. It requires navigating local laws, tax rules, bureaucratic procedures, and language barriers. And while the Portuguese system is transparent, it still holds potential pitfalls for the unprepared.
As of 2025, there are several critical legal updates and practical steps that foreign investors should be aware of. In this guide, we share what you need to know to purchase real estate in Portugal safely, smartly, and with legal peace of mind.
1. Foreign Buyers Face No Ownership Restrictions
Yes. Portugal places no restrictions on foreign property ownership.
You can purchase, rent out, renovate, or sell real estate in Portugal as a private individual or through a company — regardless of your nationality. There’s no need for residency, and non-EU citizens have the same property rights as locals. This openness has made Portugal especially popular among retirees, digital nomads, and international investors looking to diversify their assets.
2. What You Need Before Buying: NIF, Bank Account, Legal Support
To begin the purchase process, foreign buyers must:
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Obtain a NIF (Número de Identificação Fiscal) – Portugal’s tax number, required for all contracts, bank accounts, and utilities.
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Open a Portuguese bank account – Often required to pay taxes and mortgage installments.
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Appoint a lawyer – Although not mandatory, having a legal representative is highly recommended to avoid legal, tax, or zoning issues.
Many clients at Labroinha Law Office give power of attorney to their lawyer, which allows us to handle everything on their behalf — from property visits and contract review to signing the deed and transferring utilities.
“Behind every successful property purchase in Portugal is a strong legal foundation. Our role is to protect your investment by uncovering risks, clarifying the rules, and guiding you through every legal step with confidence.”Inês Labroinha Solicitor at Labroinha Law
3. Understanding the Costs: Not Just the Sale Price
When budgeting, don’t forget to factor in all acquisition costs, which usually add up to 6–10% of the purchase price. These include:
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IMT (Property Transfer Tax) – Ranges from 0% to 7.5%, depending on the value and purpose of the property.
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Stamp Duty (Imposto de Selo) – Flat 0.8% on the purchase price.
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Notary and registration fees – Around €500–€2,000.
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Legal fees – Typically 1%–2% depending on complexity.
If you’re buying through a mortgage, the bank may charge extra for appraisals, life insurance, and loan registration, which can add another cost.
4. Conducting Due Diligence: More Than Just Title Verification
Legal due diligence is the most critical step in any property acquisition. It involves:
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Verifying ownership and property boundaries
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Checking for existing mortgages or debts
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Confirming licensing status (especially for older homes and rural properties)
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Ensuring compliance with urban planning regulations
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Reviewing utility connections, zoning, and usage classification
As of 2025, Portugal has updated licensing rules, especially for rural areas and buildings built before 1951. Always confirm the legal status of the property — and whether any parts (e.g. swimming pools, annexes) were built without proper permits.
5. Property Types & Investment Strategies
Foreign investors typically purchase:
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Primary residences – If relocating to Portugal permanently.
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Secondary homes or holiday villas – Often used for family vacations.
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Buy-to-let properties – Especially in high-demand zones like Lisbon, Porto, and the Algarve.
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Short-term rentals (Alojamento Local) – Heavily regulated and must comply with licensing and condominium rules.
In Lagos and other tourist areas, local municipalities have introduced stricter limits on new short-term rental licenses in 2024–2025. A lawyer can verify whether a property has a valid AL license or is eligible for one before you commit.
6. Golden Visa: Real Estate No Longer Qualifies.
Until 2023, Portugal’s Golden Visa program allowed investors to gain residency through real estate. That path was formally closed in October 2023.
In 2025, Golden Visas can only be obtained through:
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Investment funds
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Scientific research
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Job creation or cultural support
While buying property no longer leads to a Golden Visa, the Portuguese real estate market continues to thrive thanks to lifestyle demand, rental yield potential, and non-tax-based residency schemes like the D7 and Digital Nomad Visa.
7. Inheritance, Co-ownership, and Tax Planning
If you’re buying with a partner or family member, your lawyer should explain the options for ownership structure, such as:
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Sole ownership
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Joint ownership (equal shares)
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Married couple regimes (community/separate property)
Additionally, Portugal has no inheritance tax between close relatives, but Stamp Duty of 10% may apply to transfers to non-relatives.
Careful estate planning, including drafting a Portuguese will, ensures your property passes smoothly to your chosen heirs.
8. Final Steps: Signing, Registration & Aftercare
Once due diligence is complete:
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A Promissory Contract is signed (Contrato de Promessa de Compra e Venda), often with a 10%–30% deposit.
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At closing, the public deed of purchase (escritura) is signed before a notary.
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The sale is registered at the Land Registry (Conservatória do Registo Predial) and Tax Office (Finanças).
From here, you or your lawyer must transfer utility contracts, register the AL license if renting short-term, and declare the asset for tax purposes.
9. Don’t Rely on Real Estate Agents for Legal Advice
While real estate agents are essential partners, they are not legal representatives. Their role is to promote and facilitate the sale, not to protect your legal position.
Always have your own lawyer — especially if you’re buying remotely or don’t speak Portuguese. The small cost of legal support often prevents very expensive mistakes.
Final Thoughts: Protect Your Investment from Day One
Portugal offers a stable, welcoming environment for foreign property buyers. But success depends on doing things right from the beginning. Real estate contracts, tax strategy, and legal formalities may seem overwhelming — but with the right guidance, they become manageable and stress-free.
At Labroinha Law Office, we specialize in helping international clients buy property in Portugal with confidence. Whether you need support with due diligence, contract review, inheritance planning, or fiscal representation, we’re here to help.
If you’re considering buying property in the Algarve or anywhere in Portugal, contact us to schedule a private consultation. We speak your language and protect your interests — every step of the way.