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How to buy your dream property in Portugal? A handbook for Dreamers

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Joanna Horanin

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Last updated at 21/06/2024, 17:00

Hi, I'm Joanna, the author of The Blond Travels. In the worlds of Thailand and Portugal, I feel like a fish in water - and it's no coincidence! I've been exploring Thailand for over a decade, and I've settled in Portugal for 6 years now. My mission is to support Dreamers - just like you - in discovering these fascinating countries and helping those in love with them find their own place on Earth, preferably for good! Let's uncover these unique corners of the world together.

Many people dream of having their own apartment or a house in Portugal. More and more visitors fall in love with the country and want to live here. If you are one of these people, you will certainly find it useful to know a bit about how to buy a property in Portugal. Below you will find advice based on my experience. I hope your dream of moving to the land of Fado will soon come true.

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    I bought my apartment in September 2021. The process of looking, finding and the actual purchase itself probably took around a year or more. It was certainly prolonged by the pandemic. It was a stressful and frustrating time for me and my hubby. However, I’m glad it ended successfully. Many people ask me how we managed to find and buy an apartment in Portugal. That’s why I decided to write an article about everything.

    If you want to buy something of your own here, this article will definitely be useful to you. Also, remember not to rely on just one blog and to look around, familiarize yourself with the laws and requirements and find people who speak fluent Portuguese to help you. My blog should be just a supplement and a small signpost on this winding road.

    In Portugal, the realities of the real estate market are somewhat different than in other countries, even those in Europe. Prices may seem similar, but the condition of apartments or houses is different from many people’s standards.

    Let’s take a little look at what we can find on websites.

    The condition of the properties

    I would like to start with the positive aspects of the state of real estate in Portugal. You will certainly notice during your stay here that many houses and townhouses are extremely charming. It’s true, quite a few places, especially the older ones, are places with a soul, where you feel that ‘Portuguese spirit’. The houses in the villages look like a dream, and if you can put some energy and money into them, the end result is sure to be beautiful.

    However, we can’t just marvel at dreams, because real estate in Portugal leaves a lot to be desired.

    A pink apartment in Portugal
    If it’s not dark, then the decor is questionable. (Photo from Idealista)

    Many of them are dark and cold. Buildings here generally have no heating and no insulation. Older properties will also have single windows. And while such a condition may be sufficient for most of the year, winter gives such places a cold bite.

    When buying an apartment or a house, check the condition of the walls and ceilings. See if there is any moisture on them, as black spots are a fairly common sight here.

    It’s also worth remembering that houses, especially older ones, don’t have foundations, which is another reason why you can get decently cold in December and January.

    Prices

    Prices always depend on the location. The more popular, the more expensive it is, of course.

    Prices in Lisbon start at around 150,000 Euros for a one- or two-bedroom apartment. Renovated apartments, in a better or very popular neighborhood, with two bedrooms, cost from about 400,000 Euros up.

    an apartment in Lisbon for sale
    This apartment costs about 800,000 Euros.

    Prices outside Lisbon, in a less touristy area – from 100,000 per apartment. A house can cost the same or more, depending on where it is located and its condition.

    Houses that are total ruins are also available and these cost around 40-50,000 Euros. However, you always have to put a lot of energy, effort and money into them.

    What properties can you buy? 

    In Portugal you can buy:

    • Apartments – studios or multi-room apartments. Apartments are located in older townhouses or in newer blocks of apartments.
    • Detached houses in the countryside or on the outskirts of cities.
    • Ruins – houses that have fallen apart through the passage of time and which no one has taken care of. These houses are often for sale in villages. You can also buy apartments for total renovation.
    • Freshly built apartments and houses in newly built estates – these are often located in special settlements, similar to those we have in Poland today.
    • Not yet built properties – mostly located in the aforementioned settlements. Here there is a risk of delays or that the project will not be finished.
    • Plots of land – in Portugal you can also buy a plot of land and build a house.

    Buying a property in Portugal and your country of residence 

    You can buy property in Portugal if you live here or if you live abroad.

    If you live in Portugal your task is a little easier. You will need:

    • An identity document – preferably a passport, since it has your signature
    • NIF
    • Confirmation of registration – a certificate from the junta
    • Confirmation of employment
    • Tax statement from the last year
    • Statement of account for the last 3 months

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    If you do not live in Portugal, you will need to present very similar documents. The documentation needs to be either in English or in Portuguese. 

    I know that some Americans choose to buy a property without even visiting Portugal. They rely on an estate agent and their visa agency. It seems crazy to me and I would advise you against it. Please, visit Portugal, come here and look for the property while you’re here. Establish yourself here first and familiarise yourself with the conditions. You can easily combine this with a holiday. 

    Buying a property in Portugal – Checking your credit scoring

    My experience with buying a property has been quite chaotic. It took so long and I think it had an awful lot of steps. However, I’ll try to give you an overview of the process as best I can.

    First, check the prices carefully and see what you can afford. What is your budget? How much are you able to put out of your own pocket to buy your dream 4 walls?

    It’s also a good idea to check your credit score before you apply for a loan from a bank.

    Finally, go to the bank to see if you can take out a loan and what the amount will be. It’s also a good idea to see if any agency helps with loans. I know Remax has such a service. I also recommend you Doctor Finanças.

    Pro Tip: When getting a quote from an agency, you will not get quotes from all of the banks in Portugal. We went with Activo Bank, which wasn’t on the quotes that we had gotten from the agencies. We sorted out the loan ourselves.

    Where do you want to live?

    It seems to me that this is a really important question. Here it’s not just a matter of how much you’ll spend, but also how far you want to be from entertainment, stores, or the airport.

    Living in the Portuguese countryside certainly has its charms, but you may find that you don’t have a single store in the area and a trip to the nearest vegetable store will take you half an hour.

    a woman standing at a view point in Portugal
    I considered moving to a countryside near the ocean, but after a careful consideration, I decided to live in a small town near Lisbon.

    Check the locations well and choose what suits you best. This also can be done during a holiday, if you don’t live in Portugal. 

    An older couple I know from the States kept coming to Portugal every year for 4 years, just to see different locations. They simply flew in, activated their Portugal eSIM, travelled, contacted agents, and finally they landed their dream home in the north of Portugal. 

    Establish first connections 

    A good agent who will look after your interests is a treasure. Ask friends and friends of friends if they know someone who can help you.

    It’s also worth calling agencies and asking around, meeting agents and seeing which one suits you best.

    I’ve heard good reviews about Remax. We bought our apartment from Century 21, which I also recommend. Catarina, who covers the region around Lourinhã, is also a great agent. You can call or message her over WhatsApp at +351 964 204 296. Catarina speaks excellent English and will certainly advise and help you. Get your Portugal eSIM here.

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    Get your NIF

    If you don’t live in Portugal, you need to do two things right away: get a Portuguese tax number, and open a bank account.

    This is not an easy thing to do, so I recommend my two posts that are sure to help you. Read about how to get a NIF and open a bank account.

    Search for the first properties

    The property may look great, but keep in mind that when buying older properties, you may find later that there are really a lot of things to finish or repair. Such apartments or houses are worth visiting with an electrician, plumber and architect.

    Visit the property in question a couple of times, at different times of the day. At night, go to the neighborhood and check if it is safe and quiet.

    This is where it pays to be cautious and prudent.

    A street in Vila Nova da Milfontes.
    These houses might look lovely from the outside, but inside it’s usually a different story.

    Check documentation

    Property documentation should be checked by your agency. In Portugal, not having the right documents can cause really big problems and that is why it is good to have a trusted agent and a good agency, especially if you do not speak Portuguese.

    Your agency and their notary will make sure that the property documents are impeccable and that the sale will go through without any problems.

    Certified translations in Portugal – In Portugal, official documents issued in a foreign language often need to be translated and certified by recognized entities. Navigating these requirements can be complex. Translayte delivers certified translation services in Portugal for all your legal, academic, and personal documents.

    Find out more here. 

    Make the offer 

    At this stage you can make an offer and let the bank know that you want to take a loan. The bank will send specialists to the apartment or house to see if the price the seller is asking is adequate for the condition of the property.

    This valuation will affect how much the bank is able to lend you. So if they find that the property should cost less, then automatically the amount of your loan will be less and your own contribution will be greater. In this case, you can try to negotiate, but in my experience, the Portuguese are not at all willing to do so. They prefer in this case to simply wait for someone who has more money.

    I’ve been told that such a valuation always comes out to slightly less. In the case of a property in good condition, the difference between the valuation and the asking price will be negligible. However, if the difference was really big, it would be worth thinking carefully about the purchase.

    The buyer pays for the bank’s inspection of the property. It costs about 300 euros. You can ask for another one, which will cost the same amount.

    Your evaluation is ready – What’s next?

    You can make an offer to the seller before the valuation and proceed. Waiting for the appraisal, which in my opinion is the safest option, is also na option.

    You can also advise the agency beforehand, which should tell you whether there is room for negotiation and price reduction. Sometimes there is such a possibility if, for example, in the building where the apartment is located the staircase is not renovated, or the building is not repainted. All this matters. Therefore, it is worth looking at literally everything.

    After you make an offer and the seller accepts it, go to the bank for a loan. Even earlier, at the very beginning, it’s a good idea to find out at the bank what kind of loan you can afford and what documents you need to submit. If you apply for a loan through an agency, this process is a little less stressful.

    Be prepared for the next steps to take one to two months.

    Promissory contract 

    A Promissory Contract is a short agreement between you and the seller that ensures both parties finalise the sale. Here, a 10% deposit is often required.

    This contract can be executed in Portuguese and English. The agency should help you translate this document.

    Sign the deed and pick up your keys

    Over the next few weeks you may, like the seller, be asked for upwards of yet other documentation. This will take a couple of weeks until the bank completes everything.

    At the final stage, a date will be set for an appointment at the notary, where you will spend about 3 hours signing a pile of documents whose meaning you probably won’t understand anyway, even if you speak Portuguese.

    If you do not speak the language, you will be asked to bring a representative who is fluent in Portuguese. Here I advise you to choose someone who is really responsible and able to help you. Having support from someone like this is at a premium.

    At this stage you will receive the keys to your dream 4 walls.

    What to remember about?

    There are a few things to watch out for when buying property in Portugal:

    • Documents – often houses do not have all the documents. It may even be that if the house consists of 2 separate properties, one has everything you need, the other does not. This will cause you to miss out on the entire property loan and only a sizable contribution will allow you to purchase the property.
    • Agencies – use only proven agencies. Don’t experiment and don’t trust anyone who is not employed by an agency.
    • First contract – with the first contract – promissory contract – make sure you get your money back if something goes wrong when applying for a loan. Sometimes the seller ensures that the deposit is retained in such situations.
    • Construction, specialists and building materials – in Portugal it is possible to build a house on a purchased plot of land. People who do not live here and do not speak the language should think carefully about this. Do you know where you will get builders, materials from? Will someone help you with permits? Such an investment may turn out to be a mistake.

    Buying an apartment or house in Portugal is not that difficult. It can be bought even by a person who does not live here permanently. The process is quite smooth and not very long. Of course, as always in Portugal, you have to be patient, but if it is your dream and you are a determined person, then surely the dream will come true.

    This post was created in collaboration with AloSim, who provides E-sim cards for over 170 countries.