Buying a home in Portugal

Buying a home in Portugal is one of the international property investment options of most interest to Vietnamese investors today, thanks to policies open to foreign nationals, a steadily growing market and a transparent legal framework. Non-EU citizens have the right to buy property in Portugal without holding a residence visa, with no restriction by nationality and no restriction on the type of property.

However, investors should note that from 06/10/2023, buying property no longer qualifies for a Portugal Golden Visa under the Mais Habitação Act. This significantly changes the investment rationale: buyers now come mainly for settlement through the D7/D8 visa, for a holiday property, or for returns from letting and capital growth. In 2026, the government has continued to tighten policy with a uniform IMT rate of 7.5% applying to non-resident buyers, directly affecting the structure of transaction costs.

Can foreign nationals buy a home in Portugal?

The short answer is yes – and with no significant limits. Non-EU citizens, including Vietnamese nationals, have the right to own property in Portugal with the same full legal rights as native citizens.

Ownership covers residential land, houses, apartments, villas, commercial property and agricultural land. There is no rule limiting the number of properties a foreign individual may own, nor any limit on maximum value or areas where buying is prohibited.

The only mandatory requirement is that the investor must have a Portuguese Tax Number (Número de Identificação Fiscal – NIF) and open a local bank account in order to carry out the transaction. This is a simple technical requirement, which may be completed within 1-2 weeks through a fiscal representative or in person in Portugal.

However, buying a home does not automatically grant residence rights. Investors wishing to live long term in Portugal after buying a home must apply for a separate residence visa such as thePortugal D7 visa(for those with passive income) or the D8 visa (for remote workers).

The effect of the Mais Habitação Act on buying a home

On 06/10/2023, Portugal enacted the Mais Habitação Act to address the housing crisis. This Act has far-reaching effects on both domestic and international investors, but an important point to emphasise:this Act does not prohibit foreign nationals from buying homes.

The main change is the removal of property from the list of routes qualifying for theThe Portugal Golden Visa. Before 2023, buying property from EUR 280,000 to EUR 500,000 was the most common route to a Golden Visa – accounting for around 75% of applications. Following the Mais Habitação Act, the Golden Visa is available only through routes such as fund investment (from EUR 500,000), contributions to the arts/heritage (from EUR 250,000), or scientific research.

Golden Visa permits granted before October 2023 are unaffected by the new Act. Renewal and maintenance of the original investment continue under the former terms.

In 2026, the Portuguese Parliament passed the Construir Portugal package (February 2026), further tightening transaction taxes on non-resident buyers. The most important change is the application of a uniform IMT rate of 7.5% to all those not tax-resident in Portugal – replacing the former progressive scale.

The process of buying a home in Portugal

The home-buying process is usually completed within 2-4 months from choosing a property to receiving the title documents. Understanding each step helps investors avoid risks and optimise their timing.

Step 1 – Initial legal preparation

Investors need to apply for a NIF (Número de Identificação Fiscal) – the personal tax number mandatory for all transactions in Portugal. Non-EU residents need to appoint a fiscal representative, an individual or company with an address in Portugal. Fiscal representative service costs are usually from EUR 200 to EUR 500 a year.

In parallel, open abank account in Portugalin order to transfer the funds for the property purchase. Some major banks such as Millennium BCP, Santander Totta and Caixa Geral de Depósitos allow foreign nationals to open accounts remotely through notarial certification.

Step 2 – Searching for and assessing a property

Investors may search on their own through platforms such as Idealista and Imovirtual, or through a licensed estate agent (mediador imobiliário). Agency fees are usually paid by the seller, with no additional cost to the buyer.

Once a property is chosen, legal due diligence is an essential and mandatory step. An independent lawyer checks the title certificate (Caderneta Predial), the land registry entry (Certidão do Registo Predial), building permits, tax arrears and other legal encumbrances.

Step 3 – Signing the promissory contract (CPCV)

The Contrato Promessa de Compra e Venda (CPCV) is a legally binding preliminary contract signed before the formal contract. The buyer pays a deposit of 10-30% of the property value at the time the CPCV is signed.

The CPCV terms set out the price, the description of the property, the deadline for signing the final contract and the penalty clauses for breach. Where the buyer cancels the transaction, they lose the deposit. Where the seller cancels, they must pay the buyer double the deposit. This mechanism protects both parties.

Step 4 – Signing the deed and registering ownership

The Escritura Pública de Compra e Venda is the formal contract, signed at a notary’s office (Cartório Notarial) or an authorised body (Casa Pronta). This is the point at which legal ownership transfers and the remaining balance is paid.

After signing, the property is registered at the Land Registry (Conservatória do Registo Predial) within 2 months. The formal title certificate (Certidão do Registo Predial) is issued after successful registration, confirming the buyer’s legal title.

The taxes and fees on buying a home in Portugal

Total transaction costs on buying property in Portugal usually range from 9-12% of the property value. This is a substantial figure to factor into the overall budget.

IMT – property transfer tax

Imposto Municipal sobre as Transmissões Onerosas de Imóveis (IMT) is a one-off tax applying to the transaction. According to theAutoridade Tributária e Aduaneira (AT), from February 2026 the IMT rate applying to those not tax-resident in Portugal is a uniform 7.5% of the property value – under the Construir Portugal package.

For those tax-resident in Portugal buying a main home, a progressive scale applies from 0% (under EUR 104,261) to 7.5% (over EUR 1,128,287). First-time buyers under 35 may be entirely exempt from IMT on a home worth up to EUR 324,058.

IMI – annual property tax

Imposto Municipal sobre Imóveis (IMI) is an annual property tax applying to all owners, whether resident or not. The rate ranges from 0.3% to 0.45% of the official rateable value (VPT) for urban property, and 0.8% for rural property.

The specific rate is set by each municipality (município) within the permitted range. Lisbon usually applies 0.3% in most areas, while other areas may go up to 0.45%. IMI is paid through the Portal das Finanças in May, August and November each year.

AIMI – additional tax on high-value property

Adicional ao IMI (AIMI) applies to individuals owning property with a total VPT exceeding EUR 600,000. The additional rate ranges from 0.4% to 1.5% depending on value, charged on the amount above the threshold.

Imposto do Selo – stamp duty

Stamp duty (Imposto do Selo) applies at 0.8% of the purchase price or the VPT (whichever is higher). Where the transaction involves a mortgage, a further 0.5-0.6% stamp duty applies to the loan depending on its term.

Other costs

Notarial and registration fees are usually from EUR 800 to EUR 1,500 depending on the property value. Legal fees range from 1% of the property value plus VAT at 23%. Other costs include document translation fees, certification, and international bank transfer fees.

Choosing an area to buy a home in Portugal

Portugal has many regions with different investment characteristics. Understanding the characteristics of each region helps investors choose the right objective.

Lisbon is the capital and economic centre, with average prices of EUR 5,500-8,000 per m² depending on the district. Central areas such as Chiado, Príncipe Real and Avenida da Liberdade have the highest prices. This is the choice for investors seeking long-term capital growth and rental income from tourists.

Porto is the second largest city, with prices around 30-40% lower than Lisbon, averaging EUR 3,500-5,500 per m². The city has a lively short-term rental market and a lower cost of living, suiting long-term investors.

The Algarve is the southern coastal region, famous for holiday tourism. Property prices range from EUR 2,800 to EUR 7,000 per m² depending on location, with Lagos, Vilamoura and Albufeira the hotspots. This region suits investors wanting to own a holiday home combined with seasonal letting.

Madeira and the Azores are autonomous islands, with smaller markets but reasonable prices and a distinctive climate. Madeira appeals to European retirees and remote workers, while the Azores have growth potential that is not yet fully realised.

Important legal points to note

Foreign investors need to be aware of certain legal points in order to avoid risks throughout the life of their property ownership.

Short-term letting licences (Alojamento Local – AL) are now severely restricted in many areas of Lisbon and Porto. Investors intending to let on Airbnb need to verify carefully whether a licence can be obtained before buying. Some areas have suspended new AL licences or require conversion to long-term letting.

Rental income tax applies to non-residents at 25% of net income, or 28% for income from short-term Airbnb letting. The NHR (Non-Habitual Resident) tax regime closed to new applicants from 01/01/2024, replaced by the narrower IFICI tax regime.

Capital gains tax on selling property applies at 28% for non-residents and to around 50% of the gain on a progressive scale for residents. There are some exemptions for a main home or reinvestment within the EU, but the rules are strict.

Conclusion

Buying a home in Portugal in 2026 remains an attractive European property investment option for Vietnamese investors, particularly for owning a holiday home, preparing forsettle in Portugalthrough the D7/D8 visa, or diversifying a global investment portfolio.

However, investors need to calculate carefully the total transaction costs of 9-12% of the property value, of which the 7.5% IMT for non-residents is the largest item. At the same time, understand clearly that buying a home does not automatically grant residence rights and no longer qualifies for the Golden Visa from October 2023. Working with an independent lawyer and a professional tax adviser in Portugal is an essential step to protect legal rights and optimise the ownership structure for the family’s long-term objectives.