Debunking 10 Myths When Purchasing Property in Portugal

Many homebuyers come with a lot of preconceived ideas and already have a wealth of information and expectation, shaped by what they’ve heard or read beforehand. While some of this information may be helpful, not all of it is accurate. As real estate professionals, our role is to provide clarity, answer questions and help buyers make informed decisions based on facts. Here are ten myths you need to fact check on when purchasing property in Portugal:

1. Foreigners Can’t Own Property in Portugal

Fact: There are no restrictions on foreigners buying property in Portugal. The process is straightforward and Portugal actively encourages foreign investment.

2. You Need Portuguese Residency to Buy a Home

Fact: Residency is not required for purchasing property. However, visas like the D7 Visa (for passive income earners) or the recently updated Golden Visa (for qualifying investments) may be useful if you plan to live in Portugal.

3. The Buying Process Is Complicated and Unclear

Fact: Portugal’s property purchase process is well-regulated. With a lawyer and real estate agent, buying property is a structured and transparent process.

4. The Golden Visa Is the Only Way to Buy in Portugal

Fact: While the Golden Visa was popular, it no longer applies to residential properties. Many buyers purchase homes without any visa incentives.

5. You Must Pay the Full Price in Cash

Fact: Many foreign buyers obtain mortgages in Portugal. Banks typically finance up to 70% of the property value for non-residents.

6. Portugal’s Property Market Is a Bubble

Fact: The market’s growth is driven by demand, limited housing supply and strong rental returns. It’s not an artificial bubble, but a reflection of economic stability and foreign interest.

7. Property Prices in Portugal Are Always Cheap

Fact: While Portugal remains affordable compared to some European countries, areas like the Algarve, Lisbon and Porto have seen significant price increases in recent years.

8. Buying a Home Automatically Gets You Residency

Fact: Purchasing property alone does not grant residency unless linked to a visa programme. However, it can support residency applications.

9. Property Taxes in Portugal Are Extremely High

Fact: Portugal’s property taxes are moderate compared to other European countries. Buyers pay IMT (Property Transfer Tax), but ongoing taxes are reasonable.

10. You Can Easily Turn Any Property into a Holiday Rental

Fact: Short-term rentals require an AL (Alojamento Local) licence and some areas have restrictions. Always check local regulations.

It’s easy to get caught up in myths and misconceptions that can cloud your judgment. By debunking these common myths, we’ve aimed to provide clarity and equip you with the facts you need to make informed decisions. As a first-time buyer or a seasoned investor, having the right information is key to navigating the Portuguese real estate market successfully.