Portugal has become a hot spot for Americans looking to relocate or invest abroad. With its affordable cost of living, fantastic weather, and welcoming locals, it’s no wonder that more and more Americans are considering a move to this beautiful country.
While property prices have risen in recent years, they’re still more affordable than in many parts of the US, especially compared to major cities or states like California. Plus, you’ll find that property taxes and general living expenses are usually lower too.
The good news? Yes, Americans can buy property in Portugal! The country has no restrictions on foreigners (American or otherwise) buying property here.
Whether you’re looking for a personal residence or an investment opportunity, you’re welcome to purchase real estate here. However, it’s important to note that buying property doesn’t automatically grant you the right to live in Portugal full-time. For that, you’ll need to apply for residency separately.
Popular Places to Buy
Let’s take a look at some of the most sought-after locations for American property buyers:
- Lisbon: The bustling capital city offers a perfect blend of history and modernity. With its vibrant culture, excellent restaurants, and growing tech scene, Lisbon is ideal for those who love city life. Property here can be pricier than in other areas, but it’s still a bargain compared to many larger US cities, particularly locations like San Francisco and New York.
- Algarve: Known for its stunning beaches and year-round sunshine, the Algarve is a favourite among retirees and sun-seekers. You’ll find a mix of traditional villages and more touristy areas, with properties ranging from quaint villas to luxury resorts.
- Madeira: This lush island paradise offers a subtropical climate and breathtaking landscapes. It’s perfect for nature lovers and those seeking a more relaxed pace of life. Property options include everything from charming cottages to modern apartments with ocean views.
- Porto: Portugal’s second-largest city is famous for its port wine and beautiful riverside setting. It offers a more laid-back vibe than Lisbon, with plenty of cultural attractions and a lower cost of living.
- Silver Coast: This stretch of coastline north of Lisbon is less touristy than the Algarve but equally beautiful. It’s great for those who want beach living with a more authentic Portuguese feel. Property tends to be more affordable here too.
- Azores: This archipelago in the mid-Atlantic offers stunning natural beauty and a slower pace of life. It’s ideal for outdoor enthusiasts and those looking for a more remote lifestyle. Property here can be quite affordable, especially compared to mainland hotspots.
- Cascais: Just outside of Lisbon, Cascais offers a perfect blend of beach town charm and city convenience. It’s popular among expats and offers a range of property options, from apartments to luxury villas.
Residency
As mentioned earlier, buying property doesn’t automatically grant you residency in Portugal. While the Golden Visa program used to offer a property purchase option, as of 2024, this is no longer available.
However, there are still several popular visa options for Americans:
- D7 Visa: This is the most popular choice, especially for retirees. It requires a regular passive income of at least €820 per month (as of 2024).
- D8 or Digital Nomad Visa: Aimed at remote workers or freelancers, this visa requires a monthly income of at least €3,280.
- Golden Visa: While property investment is no longer an option, you can still participate by investing in a fund (along with several other routes). Typically, this involves an investment of €500,000 or more, with some programs offering lower entry points or options to invest through IRAs or 401ks.
Remember, these figures are for single applicants. If you’re applying with a spouse, partner, or dependent children, higher income levels are required.
What about citizenship? Buying a property in Portugal won’t automatically make you eligible for citizenship. However, it does show a commitment or “tie” to Portugal which could help you when you make an application, even if it isn’t enough on its own.
The most common route to citizenship is through naturalisation or living here (for five years). However, you may also be able to obtain citizenship through other routes like a Portuguese parent, grandparent, or spouse.
Differences in Property
It’s worth noting that Portuguese homes often differ from what you might be used to in the US. They tend to be smaller and may not come with amenities like central heating or air conditioning as standard. However, these can usually be installed if desired.
Property Buying Process
Ready to take the plunge? Here’s a quick overview of the buying process:
- Find a property: Start your search on websites like Portugalist.com/property. You can filter by location, price range, and property type. Many Americans find it helpful to work with a buyer’s agent who can guide them through the process and potentially access off-market properties.
- Attend viewings: Once you’ve shortlisted properties, it’s time to see them in person. If you’re not in Portugal, you might need to schedule a trip or ask a representative to view on your behalf. During viewings, pay attention to the property’s condition, the neighbourhood, and nearby amenities. Don’t be afraid to ask questions about the property’s history, any renovations, and potential issues.
- Make an offer: When you find a property you like, it’s time to make an offer. Your real estate agent can advise you on a reasonable offer based on market conditions and the property’s value.
- Sign the CPCV (Contrato de Promessa de Compra e Venda): This is a preliminary contract that outlines the terms of the sale. It typically includes:
- Details of the buyer and seller
- Description of the property
- Agreed purchase price
- Payment terms and schedule
- Expected date for the final deed (Escritura)
- Any conditions that need to be met before the sale can proceed
When signing the CPCV, you’ll usually pay a deposit (typically 10% of the purchase price). This deposit is generally non-refundable unless the seller backs out. It’s crucial to have a lawyer review this contract before you sign.
- Due Diligence: Between signing the CPCV and the Escritura, your lawyer will conduct due diligence. This includes:
- Checking the property’s legal status
- Verifying there are no outstanding debts or liens on the property
- Ensuring all necessary licenses and permits are in order
- Reviewing the property’s energy certificate
- Arrange Financing: If you’re not buying the property outright, you’ll need to arrange a mortgage. While it’s possible for Americans to get mortgages in Portugal, the process can be more complex than for EU citizens. Start this process early, as it can take time.
- Sign the Escritura: This is the final deed that transfers ownership of the property. It’s typically signed at a notary’s office in the presence of your lawyer, the seller’s representatives, and sometimes your real estate agent. You’ll need to pay the remaining balance of the property price at this time, along with various taxes and fees, including:
- Property Transfer Tax (IMT)
- Stamp Duty
- Notary and Land Registry fees
- Register the Property: After the Escritura is signed, your lawyer will register the property in your name at the Land Registry (Conservatória do Registo Predial).
- Set Up Utilities: Once the property is officially yours, you’ll need to set up utilities in your name, including electricity, water, gas, and internet.
Remember, while this process might seem straightforward, navigating real estate transactions in a foreign country can be complex. It’s highly recommended to work with a reputable lawyer who specialises in real estate transactions for foreigners. They can guide you through the process, ensure all legal requirements are met, and help you avoid potential pitfalls.
Also, keep in mind that timelines can vary. From finding a property to completing the purchase can take anywhere from a few weeks to several months, depending on various factors including financing, seller cooperation, and any issues that arise during due diligence.
Buying property in Portugal as an American is definitely possible and can be a great investment in your future. Just remember to do your research, understand the residency requirements, and consider working with local experts to navigate the process smoothly.
Boa sorte (good luck) with your Portuguese property search!