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Brexit has left many people scratching their heads, especially those who dreamed of spending more time in Europe. It’s natural to have questions about how this change might affect your plans, particularly when it comes to buying property abroad.
If you’ve been eyeing a lovely villa in the Algarve or an apartment in Lisbon, you might be wondering if it’s still possible to make that dream a reality. Well, we’ve got some good news for you!
The Good News: You Can Still Buy Property in Portugal
Yes, you read that right! Even though the UK has left the EU, you can still purchase a property in Portugal. Portugal does not restrict foreign ownership, which means that Brexit hasn’t fundamentally changed your ability to buy that perfect Portuguese retreat.
British citizens are treated as “third-country nationals” now, but Portugal welcomes foreign investment in property. There are no restrictions on the types of properties you can buy or where you can buy them—whether it’s a beachfront apartment, a countryside quinta, or a city centre flat.
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That said, it’s important to realize that buying property in Portugal does not grant you the right to stay in Portugal for as long as you want. Most Brits will be restricted to the Schengen Visa 90/180-day rule, unless they obtain residency, which we’ll discuss below.
The Practical Side: What You’ll Need
While the right to buy hasn’t changed, there are some practical steps you’ll need to take:
Essential Documentation:
- NIF (Número de Identificação Fiscal): This is a Portuguese tax number, and you’ll need one to buy property. The good news? It’s relatively straightforward to obtain, either in person at a tax office in Portugal or through a third-party service or lawyer.
- Portuguese Bank Account: While not strictly mandatory, most property transactions require one. You’ll need your NIF to open an account.
- Legal Representation: It’s highly advisable to hire a Portuguese lawyer (advogado) who specializes in property transactions. They’ll conduct due diligence, check for debts or liens on the property, and ensure everything is legally sound.
The Buying Process: The process itself is fairly similar to buying property in the UK, though timescales can vary. Once you’ve found your property, you’ll typically sign a promissory contract (Contrato de Promessa de Compra e Venda) and pay a deposit, followed by the final deed (Escritura) at a notary’s office.
Your lawyer will guide you through each step.
Financing Your Portuguese Property
If you’re planning to take out a mortgage, you should know that it’s still possible for Brits to get Portuguese mortgages, though it’s become somewhat more complex post-Brexit.
Portuguese banks typically offer mortgages to non-residents, but:
- You may face stricter lending criteria than EU citizens
- Loan-to-value ratios are often lower for non-residents (typically 60-80%)
- You’ll need to demonstrate stable income and provide extensive documentation
- Interest rates may be slightly higher than for residents
It typically isn’t possible to get a mortgage for a Portuguese property from a UK lender.
Understanding Costs and Taxes
While we won’t go into specific figures here, it’s crucial to budget for more than just the property price. You’ll need to account for:
- Property transfer tax (IMT – Imposto Municipal sobre Transmissões)
- Stamp duty
- Legal fees and notary costs
- Registration fees
- Annual property tax (IMI – Imposto Municipal sobre Imóveis)
If you plan to rent out your property, be aware of income tax implications both in Portugal and the UK. Inheritance tax rules also differ from the UK and merit consideration, especially regarding how property passes to heirs.
Important: Always consult with a tax advisor who understands both UK and Portuguese tax systems before making any purchase. The tax implications can be significant, particularly if you’re generating rental income or planning estate arrangements.
The Catch: Visiting Limits
While you can still buy property in Portugal, there are now some limitations on how long UK passport holders can stay in the Schengen Travel Area, which includes Portugal. According to the new rules, UK passport holders can typically stay 90 days in every 180 days in the Schengen Area.
What does this mean for you? If you’re planning short visits to Portugal, the 90/180-day rule might not affect you much. However, if you were hoping to spend longer stretches of time in your Portuguese property, you’ll need to plan accordingly. For example, you could stay for three months at a time, but then you would have to leave for another three months before returning.
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If you had grand plans of wintering in your Algarve villa and spending summers in the UK, you might need to adjust your expectations slightly. While you can still enjoy up to 90 days in Portugal and another 90 days later in the year, you won’t be able to stay for a full six months in a row.
Options for Longer Stays: Residency Visas
If you’re eager to spend more time in Portugal—or live there permanently—there are several routes to residency:
- D7 Visa (Passive Income Visa) – The D7 visa is perfect for those with a passive income, like a pension or income from investments or rental property. You’ll need to demonstrate sufficient funds to support yourself, and you’re required to spend at least six months per year in Portugal.
- Digital Nomad Visa – Designed for remote workers and freelancers who can work from anywhere, this visa requires proof of employment or self-employment with income meeting minimum thresholds. Like the D7, it requires around six months of residency per year.
- Golden Visa – As of 2023, purchasing a property in Portugal no longer qualifies you for this visa. Instead, the most appealing option for many people is investing in a fund, such as a venture capital fund, with a minimum investment of €500,000.
The Golden Visa differs from other visas like the D7 or Digital Nomad Visa in that it only requires you to spend an average of seven days per year in Portugal, whereas the other visas require around eight months of residency per year. This makes it ideal if you want maximum flexibility—you can still live primarily in the UK and visit your Portuguese property whenever you wish. Many use this option if they want to stay longer than 90 days in a row but less than the 183 days at which point they would become tax residents.
After five years, you can apply for permanent residency, and after 10 years (with language proficiency), you can apply for Portuguese citizenship. Since both the UK and Portugal allow dual citizenship, you won’t have to give up your British passport.
After You’ve Bought: What to Consider
Once you’ve purchased your property, there are a few ongoing considerations:
- Property Management – If you’re not living in Portugal full-time, you’ll want to arrange property management, especially for maintenance, utility bills, and security. Many companies specialize in managing properties for overseas owners.
- Rental Income – If you’re planning to rent out your property (whether short-term holiday lets or long-term rentals), be aware that Portugal has specific regulations, particularly for tourist accommodation. You may need an AL Licence, which isn’t as easy to obtain as it once was, and you’ll need to declare and pay tax on rental income.
- Healthcare – If you’re visiting on the 90/180-day rule, ensure you have comprehensive travel insurance. If you become a resident, you’ll be able to access Portugal’s national health service (SNS), though many expats also take out private health insurance for faster access to specialists.
- Utilities and Connectivity – Don’t forget to arrange utilities (water, electricity, internet) and familiarize yourself with how these services work in Portugal—payment systems and customer service may differ from what you’re used to in the UK.
Conclusion
So, can Brits still buy property in Portugal after Brexit? Absolutely! While Brexit has introduced some new considerations—particularly around visiting limits and slightly more complex financial arrangements—the dream of owning a Portuguese property is still very much alive and well.
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The key is to plan carefully, understand both the legal requirements and the practical implications, and seek professional advice from lawyers and tax advisors who understand both UK and Portuguese systems. Whether you’re looking for a holiday home you can enjoy for 90 days a year, or you’re ready to make the leap to Portuguese residency, the options are there.
Happy house hunting!