Buying Property in Portugal: The Essentials

The process of buying a property is a gamble. It can either be very straightforward or very complex. Each country has a different bureaucratic process for real estate transactions. Portugal’s system is not too complicated. Yet, buying an immovable abroad is always tricky. There are several legal steps along the way, which should not be tackled without the help of a professional. To save money and time, hiring an agent for the process is the smart thing to do. Still, it is a good idea to have some understanding of the process. Here is a simple guide explaining the essentials of buying a property in Portugal.

Getting a Tax Identification Number (NIF)

Foreigners without a tax residency in Portugal need to obtain a tax number. The Portuguese version of the TIN is the NIF (Numero de Identificaçao Fiscal). The NIF is obtained from the Tax and Customs Authority of Portugal. It is necessary to obtain the NIF to be able to take part in any legal contract regarding a real estate transaction. It basically helps represent you as an entity in the country.

It is easy to get a NIF number by just visiting a Finança office in Portugal.

Due Diligence

A real estate due diligence means auditing and assessing the subject property in various aspects. In high-volume investments such as real estate investment, it is recommended to perform a proper audit of the property. This eliminates the potential risks and hiccups that may arise in the process. It also clears out any grey areas about the purchase. At this stage, the buyer can learn everything about the property and the transaction.

A legal firm and a property agent may arrange a comprehensive due diligence to take place. One of the key aspects is to make sure there are no surprises with the property physically and another one is making sure there are no liens or debts on it in legal terms.

Promissory Sale Contract

A promissory contract is not mandatory. Yet, it is recommended to protect both parties against any future inconveniences. This contract involves information about the terms and demands stated by both the buyer and the seller. A promissory contract includes information about five key points:

  • ID of both parties
  • ID of the property
  • Agreed price
  • Information on how the payment will be made
  • Deadline

Transaction Agreement

After the promissory stage, if both parties intend to continue with the transaction, a final deed must be signed. The purchase and sale contract is prepared by the assigned lawyer. It is signed before a notary. This deed includes the information on the agreed terms, price, and tax obligations of the buyer. It is also the mandatory step towards property acquisition registration for the buyer.

Land Registry

The final step of buying a property is the legal registration of the real estate. This step of the process is carried out at the Land Registry Office. At this stage, the buyer pays several taxes.

  • Municipal Tax (Property Transfer Tax “IMT”): Paid once when the acquisition is complete. Varies between 0% and 8%.
  • Stamp Duty (IS): Paid once at 0.8%.
  • Municipal Property Tax (IMI): Paid yearly. Varies between 0.3% and 0.45%.

Foreigners Buying Real Estate in Portugal

In recent years, the Portuguese real estate market started attracting property investors from all around the world. Although there are many different reasons people choose to buy property in Portugal, four of the common motives include:

Portugal Golden Visa Program

You may find more information on Portugal’s residence by investment program in our Portugal Golden Visa guide.

Non-Habitual Residence (NHR) Program

Portugal has an advantageous tax program on foreigners that desire to become tax residents in the country. Among the many benefits, one major advantage is the exemption from paying taxes on international income for a period of ten years.

Foreigner Retirees in Portugal

Portugal is the ideal European destination for international retirees to relocate to. With its sunny weather, delicious cuisine, hospitable people, and affordable lifestyle, many American, Canadian, and British retirees choose to spend their senior years and retire in Portugal.


Portugal offers the conveniences of Medittarenean countries, but without the chaos or the rip-off prices. Hence, lots of people opt in to have a house in Portugal merely as a lifestyle choice these days.

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