From sun-drenched beaches to quiet mountain villages and vibrant cities, Portugal is attracting more and more Dutch buyers eager to fulfil their dream: a second home, a rental property or even a permanent residence. But how does buying a home in Portugal actually work? What should you watch out for, and how do you make sure you’re well prepared for this adventure?
In this article we guide you step by step through the purchase process, including all the practical matters involved. That way you avoid surprises — and realise your dream faster.
Portugal has long been popular with Dutch buyers. The mix of sunshine, space, safety and hospitality makes it an attractive destination for holidays and long-term stays alike. On top of that, Portugal offers a stable housing market, strong rental demand and appealing tax regimes — especially compared with the Netherlands.
Popular regions include the Algarve, the Alentejo, the Lisbon area and the Silver Coast. Each area has its own charm and price tag. The Algarve is loved for its climate, the sea and golf courses. The Alentejo offers peace, space and nature. So orient yourself well on the region that fits your wishes.
Before you start searching, be clear about your goal. Will the property be a holiday home, a rental investment or are you planning to move permanently? Your goal dictates which regions, towns or cities suit you, which property type is appropriate and which permits or taxes apply.
Also set a realistic budget, including all additional costs. Expect purchase costs of roughly 7–10 % on top of the purchase price.
Even as a foreigner you can obtain a mortgage in Portugal. Most Portuguese banks finance up to 70 % of the purchase price for non-residents. It’s wise to enlist a mortgage broker familiar with foreign clients to secure a preliminary approval, so you know your limits before bidding.
To buy property you need a NIF (tax number). You can obtain this easily at the local tax office or via your lawyer. You also need a Portuguese bank account, for example to pay at the notary.
A local real-estate agent who speaks your language and knows Portuguese regulations is invaluable. The Portuguese market works differently from the Dutch one, and there is no mandatory disclosure obligation. Hence a good agent and an independent lawyer are essential.
The lawyer checks title deeds, permits, outstanding debts and documentation. This due diligence is crucial to avoid legal problems.
The purchase process has three stages:
On purchase you pay, among others:
Annually you pay IMI (property tax) based on cadastral value.
Some properties are built or extended without permits. Always get legal guidance. A home with a great view could be illegal or have illegal outbuildings. Never buy without thorough research.
Want to rent (part of) the home? You need an Alojamento Local (AL) licence. Rules vary by municipality.
Also account for Portuguese tax on rental income.
Post-completion tasks include:
Moving permanently? You’ll also register for healthcare, exchange your driving licence and perhaps apply for residency.
A reliable network makes all the difference. Agent, lawyer, mortgage adviser, tax specialist and possibly a property manager can save headaches. And always understand what you sign.
Buying in Portugal is wonderful but a serious investment. Take your time, get sound advice and don’t act on emotion alone. Then you can soon enjoy your own place under the Portuguese sun carefree.
Want to know more about buying, financing or renting in Portugal? Feel free to contact Divine Home, the local Dutch-speaking agent offering all services under one roof at your pace and in your language.
Chantal Visser-Bruining
www.divine-home.eu | +351 289 501 664 or +31 (0)10 497 3311 | info@divine-home.eu
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