Portuguese real estate is a magnet for American investors and those looking to become dual European citizens. A lot of that popularity grew in just the last decade.
But if you are from the U.S. and you’re looking to buy property in Portugal, you need to be aware of some challenges.
For one, you’ll probably be doing some (if not all) of the process overseas. That’s a tremendous barrier to entry already. If you don’t speak Portuguese, there’s another hurdle. But there are also legal and tax implications worth exploring.
That’s why we created this complete guide. It clarifies what you need to do to enter this thriving real estate market.
Why Portugal? Looking at the Market
Portugal’s property prices, while climbing steadily over the past decade, are still lower than many Western European nations.
In early 2024, average home prices hovered around €2,600 per square meter—less expensive than France or the UK. Foreign demand is part of the surge, and Americans now comprise about 10% of all foreign buyers. This uptick has nudged prices in hot spots like Lisbon and the Algarve, though the country as a whole remains competitively priced.
Portugal’s sunny climate, laid-back culture, and excellent healthcare draw expats from around the world. For Americans—especially those looking to retire or get a lot more out of their freelancing dollars—you get a massive jump in the quality of life and a lower cost of living.
To make it even easier, English is widely spoken in tourist hubs and urban centers.
Legal Basics for American Buyers (Getting an NIF)
Americans are free to buy property in Portugal without special permits or residency. You don’t need to live there full-time to own a home or commercial space. But you do need a Portuguese Tax Identification Number (NIF) to conduct the transaction and handle any financial matters, such as opening a bank account or paying taxes.To get your NIF, visit a local Finanças (tax office) with your passport, or appoint a legal representative to secure it for you if you’re still in the U.S. It’s best to hire a local lawyer (advogado) as well.
The Golden Visa Shake-Up
Launched in 2012, Portugal’s Golden Visa program once let non-EU buyers earn residency by investing in real estate—often €500,000 or more. The benefits were significant: you could eventually apply for permanent residency or even citizenship after five years, with minimal annual stays required.
Portugal removed residential property purchases from Golden Visa eligibility in 2023–2024, mainly to combat surging home prices in popular zones. Now, other investments—such as buying into venture capital funds, research, or corporate projects—qualify for the visa instead. If your goal was EU residency via property, consider alternatives like the D7 “passive income” visa or the new Digital Nomad visa. You can still own real estate as part of your life in Portugal, but it no longer grants a fast-track to residency through the Golden Visa route.
Learn more about the Portugal Golden visa here.
Financing Through Portuguese Banks
Many major Portuguese banks—Millennium BCP, Novo Banco, Santander, and others—offer mortgages to non-residents, including Americans. Typically, they’ll finance 60–70% of the property’s appraised value, so plan for a 30–40% down payment. Rates can be fixed or variable, usually tied to the Euribor rate, and terms often run up to 30 years with an age cap of around 70–75.
Expect to provide:
- proof of income (pay stubs, tax returns, bank statements)
- details about existing debt (U.S. credit scores don’t directly apply)
- life insurance
- property insurance
Step-by-Step: Buying Portuguese Property
- Research and Budget
Define your goals—vacation spot, rental investment, retirement haven—and establish your price range. Factor in 8–10% extra for taxes and fees. If you need financing, talk to banks early. - Get a NIF and Bank Account
Start the process to get your tax identification number right away, since no legal purchase can happen without it. - Assemble Your Team
Hire a real estate agent accustomed to working with foreign buyers, plus a lawyer to run title checks and draft contracts. These aren’t technically required, but they are a must. - Property Search and Offer
Explore listings in person or online (Idealista, Imovirtual, GreenAcres, etc.). Once you find “the one,” your agent submits an offer. If accepted, you’ll pay a small deposit or move straight to the promissory contract. - Promissory Contract (CPCV)
This legally binds buyer and seller. You’ll typically pay 10% of the price now. If you back out, you lose the deposit; if the seller backs out, they must repay double. - Mortgage Finalization
If you’re financing, confirm your loan approval and property valuation. The bank issues the mortgage documents, which you’ll sign before the final deed. - Close the Deal
Sign the official deed (Escritura) at a notary, pay any remaining balance, and submit proof that property taxes have been paid. Once signed, the ownership is transferred, and you’re on the registry as the new owner.
Taxes and Ongoing Costs
Purchase Taxes
- IMT (Property Transfer Tax): A sliding scale based on property value. For non-residents buying a secondary home, rates often land around 6–7%.
- Stamp Duty: 8% of the purchase price, paid at closing.
Annual Property Taxes
- IMI (Municipal Property Tax): Typically 0.3–0.45% of the tax-assessed value for urban properties, billed yearly.
- AIMI (Additional Property Tax): Applies only if you own property worth over €600,000 individually, with tiers starting at 0.7%.
Rental and Capital Gains
- Rental Income: Taxed at 28% for non-residents, though expenses like maintenance and property taxes can be deducted.
- Capital Gains: If you sell at a profit, non-residents are taxed at a flat 28%. U.S. citizens must also report to the IRS, but foreign tax credits often offset double taxation.
Learn more about dual tax liability in Portugal and the USA.
Owning Property in Portugal
With these steps, you’ll become a property owner in Portugal. That might make for a great investment or a wonderful vacation spot, but it can also be a first step toward citizenship.
Learn about becoming a dual citizen of Portugal here.
