Portugal’s real estate continues to strike a chord with international buyers in 2025, because it offers something rare: a combination of beauty, reliable property value, and a way of life that’s hard to replicate.
It’s a good place if you’re aiming for beauty, and even better if you’re looking for a solid investment. The cities are livable, the coastlines full of affordable properties, and the market, while not immune to global shifts, has kept its footing when others haven’t.
In a market like this, timing, location, and price matter more than ever. Knowing where Portugal stands today helps clarify what kind of return you can realistically expect.
Is Real Estate a Good Investment in Portugal in 2025?
You don’t need to look too hard to understand why Portugal real estate investment is still going strong in 2025.
While other markets have cooled or turned volatile, Portugal has kept a steady pace. Prices rise in Lisbon, Porto, and parts of the Algarve.
What sets it apart from other markets is the balance. There’s demand from locals, from expats, from digital nomads, and long-term renters.
The government has tightened regulations in recent years, especially around short-term rentals and Golden Visa eligibility, but none of that has stopped the flow of interest. In fact, it’s made the market more serious. The people buying in now aren’t chasing fast gains; they’re looking for real value.
Portugal’s diversity still counts for a lot.
Coastal towns tend to attract short-term rentals, while cities lean more toward long-term tenants. Inland areas, on the other hand, still offer some surprisingly affordable options. Investors who spend a bit of time getting to know these local markets are often the ones finding properties that actually perform.
So, is real estate investment in Portugal still worth it?
For buyers who know what they’re doing, or who are willing to learn, it’s one of the few places in Europe where long-term property investment still feels safe.
Of course, that all starts with knowing what you’re allowed to do, and what it actually takes to buy as a foreigner.
Can Foreigners Buy Real Estate in Portugal?
Yes, and the process is more accessible than in many other European countries. In Portugal, you can buy real estate as a foreigner investor. That’s a major reason why Portugal’s real estate investment has remained so attractive to people living outside the EU.
Whichever part of the world you’re coming from, you’re allowed to buy property outright in your name with the same rights as a local.
That openness isn’t new. Portugal has long encouraged foreign investment in real estate, both for economic growth and regional development. And in 2025, even as policy shifts in areas like residency and taxation, the core rules around buying property remain investor-friendly.
The Legal Basics of Real Estate Investment in Portugal
To complete a real estate investment in Portugal, you don’t need to hold residency or even spend time in the country before buying. But you will need a few essentials:
- A Portuguese Tax Identification Number (Número de Identificação Fiscal or NIF)
- A Portuguese bank account
- A lawyer or solicitor familiar with local property laws (not legally required, but strongly advised)
- Proof of funds or mortgage approval (for financed purchases)
Once these are in place, the process runs in three main steps:
- Offer and negotiation
- Promissory contract (Contrato de Promessa de Compra e Venda)
- Final deed (Escritura), signed before a notary
Transaction costs are reasonable, too. Expect to pay fees and taxes, including IMT (transfer tax), stamp duty, notary fees, and legal costs. Compared to markets like Spain or France, real estate investment Portugal offers less red tape and faster turnaround, especially if you have legal help lined up.
What Buying Real Estate in Portugal Could Look Like
Let’s take a look at a theoretical example.
Let’s say that we have an American family who purchased a four-bedroom villa near Lagos in 2024.
They handled the whole process from the U.S. to the final deed. After getting their NIFs through a Portuguese lawyer and setting up a local bank account, they found a property listed at €490,000. They paid a 10% deposit when the promissory contract was signed and closed the deal about 60 days later.
Today, they use the home for personal holidays and list it as a short-term rental in summer, generating over €25,000 a year in gross rental income. No residency status or visa required, just a real estate investment with solid returns and some very enjoyable vacations.
Investment or Living in Portugal?
Buying property abroad isn’t just about the finances; there’s also a personal factor. And for many international buyers, what begins as a real estate investment quickly becomes something more permanent.
It’s not just the beaches or the sunshine that draw people in; it’s the rhythm of life. Portugal offers a kind of livability that’s hard to pin down but even harder to walk away from once you’ve experienced it.
That’s why many investors eventually choose to spend more time there, or even settle down. While Portugal real estate investment no longer leads directly to residency through the Golden Visa, there are still other ways to stay long-term.
One of the most popular paths is Portugal’s D8 visa, also known as the digital nomad visa. It’s designed for remote workers, freelancers, and business owners who can support themselves from abroad. For many people, it’s the first step toward a deeper commitment to the country.
And if you’re wondering if Portugal is a good place to retire, the answer is yes! Thousands of expats already live there and enjoy a low crime rate, quality healthcare, and a lower cost of living than most of Western Europe.
And while it’s not as cheap as it once was, the day-to-day pace and sense of community continue to set it apart.
For anyone thinking beyond returns and ROI, Portugal isn’t just a good place to invest in real estate, it’s a genuinely good place to live.
What Makes Portugal’s Real Estate Market Unique?
In 2025, Portugal real estate investment continues to attract global investors due to a special combination of factors that truly set it apart from other European markets.
Diverse Opportunities
Lisbon and Porto are the go-to choices for real estate investments, while the Algarve is more suited for luxury homes and attracting retirees.
But new areas are starting to get noticed as well, for their beauty and room to grow. This mix of options makes it easier for investors to shape their real estate plans in Portugal around what suits them best.
Strong International Demand
Portugal’s openness to foreign real estate investors has made it a major advantage on the international market.
Even in 2025, overseas investors are a big part of the market, especially in major cities, where they often pay more per square meter than local buyers. That steady demand is a big part of what keeps real estate investment in Portugal so attractive.
Quality of Life and Infrastructure
Portugal’s strong quality of life. Think great weather, safety, and solid healthcare. These factors continue to pull in investors. And when we add the reliable infrastructure, transportation and digital networks, it’s easy to see why both residential and commercial properties stay in demand.
Government Initiatives and Economic Stability
The government has supported the real estate sector with tax incentives and urban renewal programs, making investment more attractive. On top of that, Portugal’s stable economy and EU membership offer an extra layer of security. All of this helps keep real estate investment in Portugal on solid ground.
The Best Property Investment Opportunities in Portugal
Portugal real estate investment isn’t a one-size-fits-all. The strongest returns depend on location, property type, and how hands-on you want to be. Some strategies work better for generating short-term income, others for long-term equity.
But what’s working best in 2025?
Short-Term Rentals in Tourist Zones
Tourism remains one of Portugal’s economic pillars, and while licensing laws are tightening, certain areas are still ideal for short-term rentals. Coastal cities like Faro and Lagos, and parts of Madeira, see strong seasonal demand and high occupancy rates during summer.
An Airbnb in Faro can generate upwards of €21,000 per year with an average of a 71% occupancy rate. [1] Investors targeting short-term stays in these areas could see gross yields between 6-9%, especially when they offer amenities like self-check-in, balconies, or proximity to beaches and old towns.
Long-Term Rentals in Student and Tech Hubs
For those after a bit more stability and little less work, long-term rentals in university towns and growing tech corridors are delivering predictable income with less volatility. Lisbon and Porto are obvious choices, but Coimbra, Braga, and Aveiro are becoming increasingly popular due to their university populations and growing startup scenes.
A well-located one-bedroom apartment in Coimbra, for example, rents for around €330-660 per month on a 12-month lease.[2] Properties in these markets typically yield around 4-6% annually after expenses, with lower vacancy rates and fewer regulatory issues than short-term lets.
Development Flips vs. Turnkey Properties
Buyers looking for capital gains are split between renovation projects and turnkey deals. Flipping older buildings, especially in up-and-coming areas like Setúbal or parts of Évora, still offers upside, but costs and permitting delays can erode profit margins if you’re not careful.
Turnkey homes, meanwhile, offer quicker rental readiness and less stress. Investors focusing on premium-ready listings in the Algarve or central Lisbon often trade a slightly lower yield for faster returns.
Real estate investment in Portugal continues to be flexible, if you’re after steady income or value appreciation, the right strategy still exists in 2025. You just have to know where to look and decide what level of involvement you’re ready for.
Costs and Taxes for Real Estate Investment in Portugal
When considering Portugal real estate investment, it’s important to know what the associated costs and taxes are. These expenses can significantly impact your overall investment returns.
Here’s a breakdown of what to expect in 2025:
Upfront Costs
- IMT (Property Transfer Tax): IMT tax varies based on the property’s value, location, and intended use. You can expect rates that range from 0% to 8% for most properties, with a flat rate of 10% for purchases by entities in blacklisted jurisdictions. [3]
- Stamp duty: A standard rate of 0.8% applies to the property’s purchase price. [4]
- Notary and registration fees: Notary and registration fees amount to around €1,000, and cover the notarization and registration of the property. [5]
- Legal fees: We advise you to hire a lawyer. Fees usually range from 1% to 2% of the property’s value, depending on the transaction’s complexity. [6]
Ongoing Costs
- IMI (Municipal Property Tax): An annual tax based on the property’s taxable value (VPT). Rates for urban properties range from 0.3% to 0.45%, depending on the municipality, according to Portugal’s Buyer Agent.
- AIMI (Additional to IMI): Applicable to properties with a taxable value exceeding €600,000. Rates are 0.7% for properties valued between €600,001 and €1 million, 1% for values above €1 million, and 1.5% for values exceeding €2 million. [7]
- Rental income tax: Non-residents earning rental income from Portuguese properties are subject to a flat tax rate of 28%, according to Expatica.
What Happens After You Buy Real Estate in Portugal
Once the deed is signed and the keys are in your hand, you’ll probably want to rest, but you’re not done yet.
Portugal real estate investment doesn’t stop at the notary. There’s still a checklist of things to handle before you can live in, rent, or even maintain your new property.
If you’re staying in Portugal, either part-time or full-time, you’ll need to register utilities in your name. This includes electricity, gas, water, internet, and garbage services.
In most cases, utility providers will require your Portuguese tax number (NIF), a local bank account, and proof of ownership. You can usually register online or through local service centers, but you’ll want someone fluent in Portuguese to help.
Property insurance is recommended, even if it’s not mandatory. It’s particularly important if you plan to rent the place out or leave it empty for stretches of time. Most insurers in Portugal offer plans for both personal and rental use, but they vary in what they cover, especially for older or renovated properties.
Then comes the question of use.
If you’re moving in with a D8 visa, you’ll be able to register for residency and utilities in your own name. If not, and you’re simply holding the property from abroad, it may make sense to hire a local property manager to handle things like maintenance checks, tax filings, and paying bills. It’s not required, but it helps keep the property in order, especially if you’re renting.
Settling can be tricky. It can take 6-12 months to feel fully grounded. You’ll need to understand local norms and adjust your expectations of pace and bureaucracy, but Portugal rewards patience. It won’t be long before you start to understand why people don’t just buy property in Portugal. They stay.
Options for Financing Your Real Estate Investment
Getting financing for a Portugal real estate investment is entirely possible for foreigners in 2025, and in most cases, it’s straightforward. Portuguese banks are used to working with non-resident buyers, and most major institutions, like Millennium BCP, Santander, and Novo Banco, have mortgage options specifically designed for international investors.
Loan-to-value (LTV) ratios for non-residents typically range from 60% to 70%. That means if you’re buying a €350,000 apartment in Lisbon, you’ll need a down payment of between €105,000 and €140,000.
It’s not a small chunk of change, but it’s competitive with other European markets, and the financing terms are relatively favorable.
Interest rates in Portugal are tied to the Euribor, and in early 2025, the average mortgage rate for non-residents sits between 3% and 6%. The rate you’ll get depends on your financial profile, your home country, and the bank you choose.
Most mortgages are structured for 25 to 30 years, though in some cases they can go as high as 50 years. That longer term can help reduce monthly payments if you’re working with a tighter cash flow or planning to rent the property long-term.
Portuguese banks offer fixed-rate, variable-rate, and mixed-rate mortgages.
Fixed rates are ideal if you want predictability.
Variable-rate options start lower but adjust with the market, which could mean lower payments now and higher ones later.
Mixed-rate loans combine both, offering a fixed rate for the first few years, then switching to a variable structure.
If you’re planning to sell or refinance within a few years, that hybrid model can be appealing.
You’ll need a Portuguese NIF (tax ID), proof of income, bank statements, a credit report, and basic documents about the property itself.
Most buyers hire a mortgage broker or lawyer in Portugal to streamline the process, and in many cases, you don’t need to be in the country in person to get approved.
Here’s how it plays out in practice.
If you buy a €350,000 flat in Lisbon’s Alcântara neighborhood and secure a 70% mortgage from Santander with a 3.5% fixed interest rate over 30 years, your monthly payment will come to around €1,100. After accounting for IMI tax and maintenance, the property can rent for €1,600 a month, creating modest but steady cash flow, plus long-term appreciation potential in a growing neighborhood.
So, financing real estate investments in Portugal is very doable. The key is to go in prepared, know your numbers, partner with professionals on the ground, and treat it like the serious investment it is.
What to Watch Out for: Risks and Regulations
Investing in Portugal’s real estate in 2025 offers promising opportunities, but it’s essential to navigate the associated risks and regulations carefully.
Bureaucracy and Hidden Fees
The property acquisition process in Portugal involves several administrative steps that can be time-consuming. From obtaining a Portuguese tax identification number (NIF) to registering the property, each phase requires attention to detail. Unexpected costs, such as legal fees, notary charges, and municipal taxes, can accumulate, impacting your overall investment budget.
Zoning Laws and Property Usage
Zoning rules in Portugal determine how a property can be used, so double-check that what you’re buying matches your plans. Are you there to live in it, rent it out, or run a business? Overlooking this can lead to legal issues or restrictions that hurt your return.
Alojamento Local (AL) License Requirements
For those considering short-term rentals, obtaining an Alojamento Local (AL) license is mandatory.
However, recent changes have introduced stricter regulations, especially in urban areas like Lisbon. Municipalities now have the authority to limit or suspend new AL licenses in specific neighborhoods to address housing shortages and over-tourism.
For instance, in Lisbon, new AL licenses have been suspended in several parishes, affecting investors aiming to enter the short-term rental market.
This decision has just been extended for another 6 months.
You Can’t Get Portugal Residence by Investing in Real Estate (Here’s Why)
As of 2023, Portugal real estate investment no longer qualifies for the country’s Golden Visa program. This change stems from the “Mais Habitação” law enacted in October 2023, which aimed to address housing affordability issues by removing real estate purchases and related funds from the list of eligible investment options for residency.
Previously, the Golden Visa program allowed non-EU investors to obtain residency by investing in Portuguese real estate. However, the government’s decision to exclude real estate was driven by concerns over rising property prices and the need to redirect foreign investment towards sectors that support long-term economic and cultural development.
Despite this shift, real estate investment in Portugal remains a viable financial venture. Foreigners can still purchase property, enjoy the country’s lifestyle, and generate rental income. However, it’s important to note that such investments no longer provide a direct pathway to residency through the Golden Visa program.
How Bitizenship Can Help You Get Residence in Portugal
We at Bitizenship help global investors secure residency in Portugal through one of the most innovative Golden Visa routes available today. As advisors to the Unbound Fund, we can provide you with a unique opportunity to qualify for the Golden Visa by investing in a regulated private equity fund focused on the Bitcoin economy.
Our team guides clients through every stage of the process. We asses eligibility, and manage the legal and administrative steps involved in residency applications.
Our mission is simple: to help you gain long-term access to Portugal in a way that aligns with your values, assets, and future goals.
While Portugal’s real estate investment remains attractive for many, it no longer provides a residency pathway. That’s why we’ve focused our services exclusively on compliant, forward-looking fund routes like Unbound.
If you’re looking for residency, lifestyle, or eventual Portugal citizenship, we believe in making that journey as smooth and informed as possible.
Final Thoughts: Is Portugal the Right Market for You?
Portugal real estate investment is about stability, access, and value, both in financial terms and in quality of life. The market is strong, and it rewards buyers who take the time to understand where to invest, what the rules are, and how to structure things correctly from the start.
You can’t buy your way to residency through property anymore, but that hasn’t slowed interest from abroad. The rental yields are still there. The appreciation is still there. And the lifestyle, mild winters, clean air, and strong infrastructure are still some of the best Europe has to offer.
If you’re thinking long-term, Portugal holds up. It doesn’t matter if you’re looking for income, a second home, or simply want a foothold in the EU; real estate investment in Portugal continues to make sense.
And if your goals include living there full time or eventually securing Portuguese citizenship, then it’s worth getting support from a team that knows what’s changed and how to move forward.
References
- https://airbtics.com/annual-airbnb-revenue-in-faro-portugal/
- https://www.uniplaces.com/accommodation/coimbra
- https://portugalbuyersagent.com/property-taxes-in-portugal/
- https://www.portugalhomes.com/news/article/535/buying-property-in-portugal
- https://www.portugalhomes.com/news/article/535/buying-property-in-portugal
- https://portugalconfidential.com/property-tax-portugal-what-foreign-buyers-should-know/
- https://portugalbuyersagent.com/property-taxes-in-portugal/
