Yes, you can buy property in Lisbon as a foreigner. Portugal continues to be one of Europe’s most welcoming countries for foreign property buyers. Whether you’re seeking a permanent residence, a vacation home, or an investment property, Lisbon offers a transparent and accessible real estate market for international purchasers.
No Restrictions for Foreign Buyers
Foreigners, regardless of their country of origin, face no legal barriers when purchasing property in Portugal. Both EU and non-EU citizens enjoy equal rights in acquiring, owning, and selling real estate. This openness has made Lisbon a hotspot for international buyers looking to capitalize on the city’s vibrant culture and robust property market.
Essential Requirements for Purchasing Property
To successfully navigate the property buying process in Lisbon, you’ll need:
Valid Identification: A passport or EU national ID card.
Portuguese Tax Identification Number (NIF): Essential for all legal and financial transactions.
Portuguese Bank Account: Necessary for handling payments related to the property, including taxes and utilities.
If you’re unable to be in Portugal physically, these steps can often be completed remotely through a power of attorney granted to a local representative or lawyer. We can do this for buyers. Contact us. We are happy to help you to make a smooth move to Lisbon.
Financing Options for Foreign Buyers
Standard Loan-to-Value (LTV) Ratios
Portuguese banks typically offer mortgages to non-residents with LTV ratios ranging from 60% to 70%. This means you’ll need to provide a down payment of 30% to 40% of the property’s value. The exact percentage depends on various factors, including your financial profile and the bank’s policies.
Exceptions to Standard LTV Ratios
While the standard LTV ratios apply to most non-resident buyers, there are exceptions where higher financing may be available.
Bank-Owned Properties: Some banks may offer up to 100% financing for properties they own, as part of efforts to offload these assets.
High-Income Individuals: Buyers with substantial and verifiable income may negotiate higher LTV ratios
Younger Buyers: Individuals under 35 may benefit from government-backed guarantees, allowing for higher financing percentages.
It’s advisable to consult with a mortgage broker or financial advisor to explore these options and determine your eligibility. We work with several different credit brokers and can help you explore all of your mortgage options. Contact us so we can help you.
Residency and Visa Considerations
Although purchasing property no longer qualifies for Portugal’s Golden Visa program, there are alternative residency options:
D7 Visa: Ideal for individuals with stable passive income, such as retirees.
Digital Nomad Visa: Designed for remote workers and freelancers.
These visas allow for extended stays in Portugal and can be a pathway to permanent residency. Always consult with an immigration lawyer to understand the requirements and application process. You can buy property in Lisbon as a foreigner even without a visa.
Tax Implications for Foreign Property Owners
As a property owner in Portugal, you’ll be subject to the same taxes as local residents:
IMT (Property Transfer Tax): A one-time tax paid upon purchasing the property.
IMI (Municipal Property Tax): An annual tax based on the property’s value.
Stamp Duty: A tax levied on various legal documents, including property deeds.
Portugal’s Non-Habitual Resident (NHR) regime, which offered tax incentives to new residents, has undergone changes. It’s important to consult with a tax advisor to understand the current benefits and obligations under this program.
Utilizing Power of Attorney for Remote Transactions
If you’re unable to be in Portugal for the property purchase process, you can appoint a trusted representative through a power of attorney. This allows your representative to handle tasks such as obtaining a NIF, opening a bank account, and signing legal documents on your behalf, streamlining the buying process.
Unique Insights: Leveraging Mortgages for Investment
An interesting aspect of the Portuguese property market is the opportunity to use rental income to offset mortgage payments. By purchasing a property in a high-demand area like Lisbon and renting it out, you can generate income that covers your mortgage, effectively allowing the property to pay for itself over time. This strategy can be particularly advantageous given Portugal’s favorable mortgage rates and the strong demand for rental properties.
Portugal’s real estate market remains accessible and attractive to foreign buyers, offering a combination of legal transparency, favorable financing options, and investment potential. Whether you’re looking to relocate, invest, or find a vacation home, Lisbon presents a compelling opportunity.
If you’re considering to buy property in Lisbon as a foreigner and need personalized guidance, feel free to reach out for a consultation. We’re here to help you navigate every step of the process.