Portugal

Best Country for Doing Business in Europe (World Bank, 2023)

Economy: €205.2 billion

22.3 million tourists per year

Receive the latest insights and research on the Portugal real estate market by downloading the investment case below.

Want to learn more about Portugal's property investment process?

Portugal is a high growth new market with excellent investment potential. However, there are also many complicated procedures to navigate which investors find challenging to tackle on their own.

With the help of IP Global’s research team and investment managers, this investor guide was developed to provide clarity on some of the more complicated elements of the investment journey in Portugal.

PORTUGAL: A GOLDEN OPPORTUNITY

Portugal, a highly regarded European jewel, is renowned for its rich history, diverse landscapes, captivating culture, and exceptional weather. The nation's thriving economy is primarily fueled by the tourism, technology, and renewable energy sectors. A strong emphasis on education has cultivated a well-educated workforce, promoting business expansion and innovation.

The Portuguese real estate market has seen remarkable growth in recent years, with major cities like Lisbon and Porto experiencing urban regeneration, while coastal regions like the Algarve and Silver Coast attract investment in luxury resorts and residential properties. Improved infrastructure, such as airport expansions and high-speed rail developments, further enhances Portugal's appeal to investors.

Portugal's unique blend of economic stability, vibrant tourism industry, educated workforce, and appealing lifestyle make it an ideal destination for property investment.

Portugal in a Snapshot

Population:

Approximately 10.3 million residents, known for their friendly and welcoming attitude, attracting expatriates and tourists.

Housing Market:

International housing demand in Portugal's district capitals surged to 27% due to urban regeneration and luxury resort investments, while rental demand rose from 24% pre-pandemic to 32% in December 2022.

Economy:

GDP of around $239 billion in 2021, driven by tourism, technology, and renewable energy, with 43% of the population holding a tertiary education degree.

Why invest in property in Portugal?

The appeal of investing in Portugal's real estate has consistently grown in recent years, offering a diverse range of opportunities, from beachfront homes and luxury resorts to historic townhouses. The Portuguese market's resilience, evidenced by its recovery from the financial crisis and the COVID-19 pandemic, has attracted professionals and businesses globally. Affordable living costs and high living standards, coupled with steady tourism sector growth, have contributed to a sustained increase in real estate prices in Portuguese capitals.

Portugal's government has implemented various business-friendly measures to promote investment and stimulate growth. The Non-Habitual Tax Regime and the Golden Visa program have been particularly successful, attracting billions of euros in real estate investments.

With its popularity as a tourist hotspot, the Algarve offers properties that yield impressive rental income. Portugal's rental yields, averaging between 5% and 10%, are among Europe's highest. The market caters to diverse properties, from single-bedroom apartments to opulent villas.

PWC ranked Lisbon as the 16th most attractive city for real estate investments in 2022, with Greater Lisbon's property prices increasing by an average of over 15% and rental rates rising 36.9%, indicating its strong growth across the metropolitan region. High demand for luxury properties has continued, and this trend is expected to persist. Supply may struggle to meet demand due to slow licensing processes in many city councils and challenges in securing construction credit.

Portugal provides various appealing incentives for property investors. Besides the now-closed Golden Visa program, the notable Non-Habitual Residence (NHR) program offers tax exemptions on some foreign income, a special low tax rate on foreign pension income, and reduced tax rates for local high-value employment.

Get in touch with us to gain comprehensive insights into the various tax incentives and benefits available to property investors in Portugal.

The Golden Visa Programme

Launched in 2012, Portugal's Golden Visa program offered a swift path to EU citizenship through property investment in just 5 years. In 2020, investments surged by 192% to €146 million. However, the "Mais Habitação Law" enacted on October 6, 2023, has ceased real estate category investments under the Golden Visa, altering the program's landscape.

No longer can investors apply through real estate avenues. For details on alternative European golden visa schemes, download our guide.

Download the Golden Visa Guide

Want to Learn About Investing in Portuguese Real Estate?

Download our helpful guide on local laws, tax, mortgages, acquisition costs, lettings & management and more.

FAQs

Yes, buying property in Portugal has proven to be a good investment for several reasons. Portugal's real estate market has shown consistent growth and resilience, recovering from the financial crisis and navigating the COVID-19 pandemic successfully. The persistent growth in property demand, strong residential construction, and healthy rental yields continue to attract property investors.

As of November 2022, Lisbon apartments offer rental yields between 3.06% and 10.39%, averaging 5.59%, according to the Global Property Guide. Porto apartments generate returns of 3.43% to 6.73%, averaging 4.85%. In Faro (Algarve), yields average around 4.66%, and in Aveiro, they average 4.90%. These competitive yields and purchase prices make Portugal's property market appealing for investment, especially in European capital cities.

While Portugal's property prices are relatively moderate, it ranks 9th among European countries for the highest rental yields. However, in cities with higher rental yields, finding a new tenant may take longer if your property becomes vacant.

Acquiring property in Portugal for foreigners is relatively straightforward. There are no specific restrictions for non-residents seeking to purchase real estate in the country. Better yet, there’s no additional paperwork or eligibility criteria for buying a home. The only requirement is obtaining a VAT identification number, referred to as a número de identificação fiscal (NIF) or número de contribuinte in Portugal. This can be acquired by opening a Portuguese bank account or visiting a tax office within the country.

Our team of experts is committed to assisting you in purchasing a property in Portugal and guiding you through the entire process. To request our investment case or ask any questions, simply use our contact form. We'll be delighted to get in touch and provide the information you need to make well-informed decisions.

The best places to invest in property in Portugal depend on your investment goals, budget, and preferences. Some popular areas for property investment in Portugal include:

  1. Lisbon: The capital city offers a diverse range of properties, from historic apartments to modern developments. Its growing economy, urban regeneration projects, and strong rental demand make it an attractive investment destination.
  2. Porto: The country's second-largest city is known for its picturesque charm and thriving tourism industry. Properties in Porto can offer good rental yields and potential for capital appreciation.
  3. Algarve: This popular coastal region boasts beautiful beaches, golf resorts, and luxury properties. Investing in the Algarve can generate excellent rental income, particularly during the tourism season.
  4. Silver Coast: Stretching from Lisbon to Figueira da Foz, the Silver Coast is an up-and-coming area with a mix of traditional and modern properties. It offers more affordable options compared to the Algarve and is popular among retirees and tourists.
  5. Madeira and Azores: These archipelagos offer unique investment opportunities in a stunning natural setting, with a focus on eco-tourism and holiday rentals.
  6. Coimbra, Braga, and Aveiro: These smaller cities are experiencing economic growth and increased property demand, making them potential investment hotspots.

For further information on where to invest, our team of experts is readily available to share their knowledge and resources.

Portugal's Golden Visa program, which has attracted many foreign investors looking for a path to residency in the country, is coming to an end. The program allowed non-European Union citizens to obtain a residence permit by investing in Portuguese real estate or creating jobs in the country. However, on October 7, 2023, the new Golden Visa Program called the VPIAR came into effect and replaced the old Golden Visa program.

The VPIAR offers several new investment options to obtain residency in Portugal, with a focus on attracting investments that contribute to the country's economy and job creation.

Our Track Record in Portugal

As a truly international property investment company, IP Global helps investors add the strength of global real estate to their portfolio. In our 15 years of experience we have successfully entered 45 markets world-wide and invested over USD3 billion on behalf of our clients.

Since 2019, IP Global has successfully invested over €16 million in Portuguese real estate and continues to look for opportunities in this resilient, high-growth new market.

Our properties in Portugal

SOLD OUT

South Beach Sagres

AlgarvePortugal

One of Europe’s most popular visa schemes, Portugal launched its Golden Visa in 2012 as a residency-by-investment programme.

From eur 280,000

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SOLD OUT

Litoral Living

PortoPortugal

Our second Porto development Litoral Living is located within the southern part of the Matosinhos neighbourhood. Litoral...

From eur 223,000

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SOLD OUT

Alvaro

PortoPortugal

Our first Porto development is ideally situated to benefit from the city’s perfect storm of affordable property...

From eur 212,500

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