Buyers Guide

Becoming a Property Owner in Portugal

Becoming a property owner in Vale do Lobo is an exciting process but while this is a time for celebration, we also appreciate that it can also be overwhelming with the various opportunities and details to consider. To ensure our clients are well informed and in order to help you to make your decision, we have detailed important information that you should be aware of when buying and owning properties in Portugal.

The  Vale  do  Lobo  Real  Estate  Team,  together  with  financial  advisors and local lawyers are always available to assist you and help you throughout the process. While this is general information, this is an important starting point and we always recommend that our clients contact a local lawyer or tax advisor for specific and personalised advice.

Advantages for Buying and Investing in Portugal

Favourable Tax Regime

Portugal offers a selection of extremely attractive investment advantages with favourable tax regimes and special residency visa permits available for those who choose to purchase property within the country.

The two major incentives available to investors in Portugal are:

The Golden Visa

Portuguese Residency Visa Permit

This special residency card is aimed at any non EU nationals who are looking to gain a visa to allow free travel in the European Union and Schengen Countries.

The Golden Visa, among other situations, is granted to individuals who:

•   Buy a property in Portugal of a value equal to or greater than €500,000

•   Complete a minimum period of stay in Portugal of 7 days in the first year

•   Complete a minimum stay of 14 days during the subsequent periods of 2 years

•   After the 5th year a definitive permit can be applied and conceded with the opportunity to apply for Portuguese citizenship

Non Habitual Residents (NHR)

Tax regime for non-habituals residentes

This regime allows for tax exemption on almost all income from foreign sources and a flat income tax rate of 20% on the majority of revenue sources, such as salaries. Some other advantages of this special tax regime include:

•   Tax exemption on pensions

•   Tax exemption on inheritance

•   Tax exemption on capital income

•   Tax exemption on dividends and interests

The Buying Process

Initial Steps

Below are some important steps that you should take before making your purchase decision:

•   Establish what type of property suits your needs and budget (apartment, linked villa, detached villa, plot of land for construction).

•   Define what will be the main use for the property: as a residence, a holiday home or to rent.

•   Seek advice from an accountant or financial advisor.

•   Always use a lawyer or solicitor to finalise the contract and required paperwork for the purchase of the property.

•   If you are considering buying through a foreign company for tax reasons, carefully analyse the pros and cons.

•   Never buy shares in a property-owning company without instructing your lawyer to do a thorough due diligence of the company, its assets and respective legal situation.

•   Finally, remember the legal title to transfer the property is the Notarial Deed (Escritura), which needs to be signed in an official Notary’s Office.

Property Ownership structure

There are a number of different owner-ship options available.  It is very important to look at these options and take tax advice on them. The potential tax savings you could make in the future by setting it up properly at this stage are huge. The main options for   purchasing   the property are:

•   Buying the property in the name of the prospective buyer(s).

•   Buying  in  the  name  of  a  company,  national  or  international, although  given current  property  tax  provisions,  it  is not advisable to do so in the name of a “blacklisted  offshore  entity”  (list  issued by the Portuguese tax authorities)

•   Buying the property freehold or the leasehold.

Please discuss the above options with your lawyer before proceeding with the purchase.

Property Taxes and Costs

Taxes and costs related to property transfer

All acquisition costs can be offset against future capital gains tax liabilities providing they are properly documented, so it is important to keep and file records carefully.

Notaries and Registration fees are fixed although they could vary according to the type, number or complexity of acts to be done or registered, whereas Purchase Transfer Tax (IMT) and Stamp Duty are based on the declared price of the property. Stamp Duty is charged at a fixed rate of 0,8%, whereas Purchase Transfer Tax for villas and apartments is charged according to a sliding scale that is altered each year, varying between 1% and 8% (e.g. 6% over €550.836 for non-permanent habitation) of the declared value of the sale. For urban plots for construction, the tax rate will be 6,5% of the declared value of the sale.

Real Estate Taxes and Levies

​Annual tax on real estate property (IMI)


The IMI tax is due annually and can be paid up to 3 instalments, depending on the value. The tax is calculated upon the taxable value (VPT – Valor Patrimonial Tributário) of the real estate property. The IMI rate is determined by the competent Municipality Assembly for the next year. The applicable rate ranges between 0,3% and 0,5% for urban buildings.

Stamp Duty (IS)

Residential properties and plots of land for construction with a taxable value  of at least 1 million euros are subject annually to stamp duty of 1% over the taxable value.

Notarial and registration fees Approx. €2.000
Stamp Duty Calculated at 0,8% of the declared value of the deal.
Legal Fees Depending on the lawyers, but can usually be calculated at 1% or 2% of the value of the deal of the deal.

Mortgages in Portugal

Mortgages for property in Portugal are normally available for up to 75 percent of the value of the bank valuation (loan to value LTV). This generally means you’ll need to find a 25 percent of own capitals and be able to provide evidence of your income. Mortgages in Portugal are available over periods of between 5-30 years. Lending criterias & interest rates, spreadsor costs associated vary between credit institutions. 

Off-Plan Properties

Off-plan properties are a very successful way of securing a property investment while only putting in minimum capital in most cases, making them a very popular option for investment purposes.

It usually takes between 12 and 24 months to complete a development cycle and this allows buyers ample time to be able to arrange moving plans while seeing their capital grow.

Every off-plan property is checked and approved before a final purchase is made and Vale do Lobo adheres to very strict criteria in all off-plan developments to ensure complete transparency at every stage of the project.

Custom-Built Properties

Choosing to build a property in Vale do Lobo allows an owner to create the home of their dreams however it is also possible to buy properties off-plan within the resort with the same level of assurance.