Buying Property in Lisbon: A Guide to Lisbon Real Estate

Lisbon, the vibrant capital of Portugal, has become one of the most sought-after destinations for property buyers in recent years. With its mild winters, warm summers, and energetic energy, Lisbon offers an appealing blend of European charm and modern amenities that attracts a diverse crowd of residents, investors, and digital nomads.

The city’s appeal extends beyond its pleasant climate. Lisbon boasts a thriving expat community, a growing startup scene, and a reputation for safety. Its rich culinary landscape, ranging from traditional Portuguese fare to international cuisines, satisfies even the most discerning palates. As a base, Lisbon is ideal for exploring both Portugal and the rest of Europe, thanks to its well-connected airport and transport links.

And, the best news: there are no restrictions on foreigners buying property in Portugal.

While property prices have risen in recent years, Lisbon remains more affordable than many other major cities like London, New York, or San Francisco. This combination of quality of life and relative affordability continues to make Lisbon an attractive option for both living and investment.

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Neighbourhoods

Lisbon offers a diverse range of neighbourhoods, each with its own unique character:

Alfama: The oldest district, known for its winding streets, traditional Fado houses, and stunning views. This is an incredibly beautiful neighbourhood to live in but it can be very touristy.
Baixa: The downtown area, featuring grand 18th-century buildings and bustling shopping streets.
Chiado: An elegant, upscale neighborhood with high-end shops, theaters, and literary cafes.
Príncipe Real: A trendy area known for its antique shops, gay bars, and beautiful gardens. This is considered one of the most desirable places to live in Lisbon.
Graça: A residential area offering some of the best viewpoints in Lisbon.
Bairro Alto: The nightlife hub, filled with bars, restaurants, and Fado houses.
Cais do Sodré: Once a red-light district, now a hip area with cool bars and restaurants.
Belém: Famous for its historical monuments and delicious pastéis de nata.
Campo de Ourique: A charming residential area with a village-like feel. It has an upmarket, residential feel.
Alcântara: An up-and-coming area known for its riverside restaurants and LX Factory. This is now considered one of the most desirable neighbourhoods to live in.
Santos: A design district with a growing reputation for its nightlife. It’s central location makes it a popular place to live.
Mouraria: One of Lisbon’s most multicultural neighbourhoods, with a vibrant local community.
Parque das Nações: A modern area built for Expo ’98, featuring contemporary architecture and amenities. Properties here are typically more modern and would suit those looking for conveniences like parking, AC, and elevators. The downside is this neighbourhood lacks the charm of downtown Lisbon.
Marvila: An emerging district known for its artisanal breweries and art galleries.

Read more about the different neighbourhoods in Lisbon

Investment vs. Living

When considering property in Lisbon, it’s important to differentiate between buying for investment and buying to live.

Some neighbourhoods, such as Alfama, Chiado, Cais do Sodré, and Bairro Alto, are highly popular with tourists. While these areas can offer excellent rental potential, they may not be ideal for those seeking a quieter, more local experience.

For a more residential feel, areas like Alcântara, Estrela, Príncipe Real, Alvalade, and Campo de Ourique offer a balance of local amenities and a more authentic Lisbon lifestyle. These neighbourhoods often provide a reprieve from the tourist hustle while still being well-connected to the city centre.

It’s also worth noting that getting an AL licence (licence for short-term lets) is now much harder in Lisbon, and these days more and more investors are focusing on long-term rentals instead.

Beyond the City Center

For those willing to look beyond central Lisbon, there are several attractive options:

Algés: A suburb just outside Lisbon with good transport links and more affordable prices.
Cascais Line: The train line from Cais do Sodré to Cascais offers numerous residential areas with easy access to both Lisbon and the beach.
Cascais: A beautiful coastal town offering a high quality of life, popular with expats and wealthy locals. It is well-connected by the trainline.
Almada: Just across the Tagus River, offering stunning views of Lisbon and more affordable property prices. There are regular ferries throughout the day and it’s possible to be in Lisbon City Centre in as little as 10 minutes. However, the ferry doesn’t run late at night.
Costa da Caparica: A long stretch of beautiful beaches, popular with surfers and beach lovers. It’s popular with surfers and digital nomads, but lacks quick access to Lisbon City Centre.

These areas can offer more space, often at lower prices, while still providing easy access to the city centre.

Transportation

Lisbon boasts an excellent public transport system, with the metro being the fastest and most reliable option for getting around the city. When house hunting, proximity to a metro station can be a significant advantage. The city also has an extensive bus network and iconic trams, although these can be less reliable and often crowded with tourists, especially during summer months. Purchasing near a metro station will make it easier to get around.

Getting a Mortgage

Obtaining a mortgage in Portugal as a foreigner is possible. The challenges are more if you’re a non-resident (not legally living in Portugal) versus whether you’re Portuguese or not.

Non-residents typically need to put down a deposit or downpayment of around 30%. Residents typically only need to put down a deposit of 20%, although in some cases it’s possible to put down as little as 10%.
Interest rates in Portugal are generally competitive compared to other European countries.
You’ll need to provide proof of income, tax returns, bank statements, and other financial documents.
Many banks will require you to take out life insurance as part of the mortgage agreement.
It’s advisable to work with a mortgage broker who specializes in loans for foreign buyers, as they can help navigate the process and find the best rates.

The Buying Process

Property Search: You can begin your search on Portugalist.com/property.
Attend Viewings: It’s highly recommended that you view any property you’re interested in at least once (and ideally several times).
Make an Offer: Once you’ve found a property you like, submit an offer.
Promissory Contract: If your offer is accepted, you’ll sign a promissory contract (Contrato de Promessa de Compra e Venda or CPCV) and pay a deposit, typically 10-30% of the purchase price.
Mortgage Approval: If you’re financing the purchase, this is when you’ll finalise your mortgage arrangements.
Final Deed: On the agreed date, you’ll sign the final deed of sale (Escritura Pública de Compra e Venda) before a notary. You’ll pay the remaining balance and any taxes and fees at this time.
Property Registration: Your lawyer will handle the registration of the property in your name at the Land Registry (Conservatória do Registo Predial).

Using a Buyer’s Agent

Navigating the Portuguese property market can be challenging, especially for foreign buyers unfamiliar with local practices and regulations. This is where a buyer’s agent can be invaluable.

A buyer’s agent is a professional who works exclusively on behalf of the buyer, unlike traditional real estate agents who typically represent the seller. They can help you:

Understand the local market and property values (as there is no central database showing what properties sold for).
Find properties that match your criteria, including off-market opportunities.
Arrange viewings and accompany you to them.
Negotiate the best possible price and terms.
Assist with post-purchase matters like setting up utilities.

Most buyer’s agents in Portugal don’t charge for their services (they receive a commission from the seller’s agent). However, some people prefer to work with an agent and pay them for their time instead.

Residency and Property Ownership

It’s crucial to understand that purchasing property in Lisbon, or anywhere in Portugal, does not automatically grant you the right to live in the country. Residency and property ownership are separate matters, and you’ll need to address both if you plan to live in Portugal.

For EU/EEA/Swiss citizens, the process is relatively straightforward. They have the right to live and work in Portugal, needing only to register with the local authorities after three months of residence. Those with non-EU/EEA/Swiss family members, such as a spouse, will also find the process fairly straightforward.

Non-EU/EEA/Swiss citizens, however, need to apply for a residency visa. The most common options for those looking to live in Portugal are:

The D7 Visa: Also known as the Passive Income Visa, this is suitable for retirees, landlords, investors, or those with a steady income from sources outside of Portugal.
The D8 Visa: Often referred to as the Digital Nomad Visa, this is designed for remote workers and freelancers who earn their income from non-Portuguese sources.
The Golden Visa: This program is for those making significant investments in Portugal. You can no longer qualify by purchasing property in Portugal, so you will need to invest in something else to obtain residency. Now that the property route has ended, the most common investment route is to invest in a qualifying fund.

Other visa options include visas for students, entrepreneurs, and skilled workers, but the above three are the most common for those buying property with the intention of relocating.

Conclusion

In conclusion, whether you’re looking to invest or find your new home, Lisbon offers a wealth of options to suit various preferences and budgets. The key is to carefully consider your priorities – be it rental potential, quiet residential life, or proximity to specific amenities – and explore the diverse neighbourhoods Lisbon has to offer. With its blend of historical charm, modern conveniences, and vibrant culture, Lisbon continues to captivate property buyers from around the world.