Buying a Rental Property in Portugal

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Last updated on June 4, 2024 | Est. Reading Time: 8 minutes

Thanks to its warm weather, low cost of living, and beautiful beaches and countryside, Portugal has become an incredibly desirable place to own a holiday home or vacation rental, particularly in areas like Lisbon, Porto, and the Algarve. It’s also home to some of the best golf courses in the world, many undiscovered wine regions, and often has cheap flights from destinations like the UK, Germany, and the Netherlands. If you’re looking for a property to add to your portfolio, Portugal is definitely somewhere to consider. 

Buying property in Portugal has a few challenges, and there are often structural and legal issues that you need to look out for.

Search Properties in Portugal

Researching the market

The Algarve, Lisbon, and Porto are the most popular parts of Portugal for tourists, but there are definitely other parts of Portugal to consider. Focusing on regions that have large international airports is a good place to start. These are:

  • Faro Airport (Algarve)
  • Lisbon Airport
  • Porto Airport
  • Madeira Airport 
  • Ponta Delgada Airport (São Miguel, Azores)

(There are other airports in Portugal, but they’re much smaller and less international)

Another starting point is looking at the most popular destinations for tourists visiting Portugal. There are a lot of “top 10 places to visit in Portugal” articles, which can be useful for skimming to see where is recommended most (although be aware they are often written by freelancers who may not have visited all of these destinations). Popular destinations (in no particular order) include:

  • Lagos (Algarve)
  • Albufeira (Algarve)
  • Faro (Algarve)
  • Funchal (Madeira)
  • Évora (Alentejo)
  • Porto
  • Lisbon
  • Ericeira
  • Sintra
  • Coimbra
  • Aveiro
  • Óbidos
  • Parque Natural da Serra da Estrela
  • Parque Nacional da Peneda-Gerês
  • Braga
  • Guimarães

Each of these locations is different (beach-focused vs city-centre, for example) and attracts a different type of clientele and will have different occupancy rates during the year. You’ll need to decide which area best suits your budget and the type of client you’re trying to attract. 

Of course, if you’re thinking about spending some time in the property yourself, you may have already decided on a location – perhaps a villa in the Algarve or an apartment in Lisbon. 

Finding Properties

The most popular property website in Portugal is There isn’t one property website that covers everything so once you really begin your property search, you’ll want to pay attention to multiple sites (or get your buyer’s agent to). Even if you visit all of these sites, your search may not pick up everything as many agents only list a few of their properties. 

Other property websites include:

Estimating Rental Yields

Once you’ve narrowed down on a potential destination, and have an idea of how much properties there cost, you’ll want to estimate how much you can earn in rental fees. 

As and are the main websites for finding vacation rentals, these are good sites to use for research. There are even sites like AirDNA or PriceLabs that analyse the data for you and do all the hard work, making it easy to compare daily rates, occupancy rates, and seasonality between different destinations. Naturally, these tools should be seen as a guide. 

Other costs

There are other costs to consider, such as utilities and insurance, but three of the bigger ones are taxes, property management costs, and furnishing. 


According to Blevin Franks, “Portugal residents pay tax on rental income at a flat rate of 28%. You can add rental income to your other income for the year so it is taxed at the normal scale rates. However, this is unlikely to be beneficial if you pay tax at anything other than the lowest tax rate, currently 14.5%. Non-residents pay tax at 28%; the letting agent must deduct this from the gross rent” [source].

Maintenance expenses and municipal property tax (IMI) may be deducted from rental income if they are documented [source].

Airbnb has a document from 2018 with lots of useful information

Another consideration, which may not be for a few years, is capital gains tax when you decide to sell the property. 

Property management 

If you aren’t going to manage the property yourself, you will need to factor in the costs of using a property management company like GuestReady to take bookings, arrange cleaning, and deal with any repairs. The cost of using GuestReady, for example, starts at 20% + VAT. Quinta Property, similarly, suggests that you should expect to pay around 20% + VAT, which is around 6%. Some individuals and companies specifically focus on Airbnb and, besides arranging the cleaning and guest check in, also offer services like listing optimisation, posting guest reviews, and arranging a photographer. CohostMarket suggests that typical commissions are somewhere between 20% and 30%.


At least in the beginning, you’ll need to furnish the property with all of the essentials – from beds and sofas to cutlery and crockery. IKEA is a popular choice, and often the easiest option, especially as there are now several IKEA stores in Portugal. However, it’s not the only choice and you can ensure your property stands out that little bit more if you consider picking up some of the main pieces at some of the other furniture stores in Portugal

The buying process

The buying process in Portugal is similar to other countries: you find a property you like, make an offer, put down a deposit, and then sign the deeds. 

However, there are a few small differences. One is the CPCV or promissory contract, which is typically non-refundable if you pull out (but you get double your deposit if the seller pulls out). 


The concept of a buy-to-let or residential property mortgage doesn’t really exist in Portugal. What this means is that you can’t get a mortgage based on projected future income; you have to be able to make the monthly payments based on your current income. On the plus side, it also means that you generally don’t need special permission from the bank to rent out a property with a mortgage. 

Mortgages are typically provided by a Portuguese bank rather than a bank overseas. Deposit amounts vary depending on whether you’re a resident or not. A mortgage calculator combined with a mortgage broker will help you estimate your spending power, but as a starting point:

  • Residents can normally get a mortgage with a deposit of 20%, but sometimes as low as 10%.
  • Non-residents typically need 30%, but sometimes it can be lower. 

As well as the deposit or downpayment, you will need to factor in buying costs which typically amount to somewhere between 6% and 8% of the property purchase price. As this has to be paid with cash rather than financed through the mortgage, this means that, as a guideline, you should consider having cash of around 28% of the property purchase price if you’re a resident and 38% if you’re a non-resident. 


Owning a property in Portugal, whether that’s your main residence or a rental property, doesn’t automatically make you a resident. Those that hold a non EU/EEA passport can typically spend 90 in every 180 days in Portugal and if you want to stay longer, you should consider a residency visa such as the golden visa, D7, or D2. Those from the EU/EEA can stay for longer and can obtain residency fairly easily, but should apply for residency after three months. 

  • D7: Requires you to show a regular passive income (such as income from a pension or rental property) that’s at least €820 per month (for 1 person).
  • D8: Requires you to show a regular active income (such as income from a remote job or freelancing) that’s at least €3,280 per month (for 1 person).
  • D2: Requires you to start a business that generates at least €820 per month (for 1 person).
  • Golden Visa: Requires you to make an investment in Portugal. As of October 2023, it’s no longer possible to purchase a property and qualify for the golden visa. The most appealing route for most people is now likely to be investing in funds.


You will typically need an alojamento local (AL) licence to rent out your property on a short-term basis. As of 2023, it has now become much harder to get an AL licence.

Advertising the property

There are a whole host of property booking websites, but the two most popular are and Both take a commission, and you will need to factor this in when setting your prices. To succeed at both you need plenty of great reviews, and to attract your first customers and get those reviews you may need to set your prices lower initially.

Although the most popular, these aren’t the only two sites. Other websites include VRBO,, Plum Guide, and Tripadvisor Vacation Rentals.

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James Cave is the founder of Portugalist and the author of the bestselling book, Moving to Portugal Made Simple. He has visited just about every part of Portugal, including Madeira and all nine islands of the Azores, and lived in several parts of Portugal including Lisbon, the Algarve, and Northern Portugal.

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