Buying property in Porto

Buying property in Porto
shutterstock.com
Updated 2021-09-22 09:56

In the last decade, Portugal has become an important destination for culture and investment in Southern Europe. While a lot of attention is focused on the country's capital, Lisbon, Porto has emerged as a dynamic and highly promising alternative.

A lot of expats pick Porto as the city to settle in. House prices in Porto are substantially lower than in Lisbon. With that, you get a highly developed infrastructure, a vibrant community and, basically, everything you need for an active modern lifestyle.

Buying property also makes it possible for foreigners to acquire residency via the purchase of property. Getting residency through purchase of property will also qualify you for the Non-Habitual Resident (NHR) tax regime. The program is designed to offer foreign investors reduced tax rates — as well as full tax exemptions.

Important:

The Portuguese government has recently signed a clause that excludes investments in Lisbon and Porto from the Golden Visa Scheme. When the clause comes into effect, purchasing property in Lisbon, Porto and the Algarve region will no longer allow you to apply for the Golden Visa. The deadline to exclude the above regions from the Golden Visa Scheme has recently been extended to January 22.

However, Porto's popularity has also come at a cost.

With an intense demand flooding Porto's real estate market, one should expect a higher focus from local authorities on bigger transactions, in order to avoid tax evasion and market speculation by both buyers and sellers.

Because of the recent shortage of affordable housing options for locals, there has been a fierce political debate about the subject in the last couple of years. As a result, laws on buying and renting properties, as well as the legal obligations of both tenants and landlords are continually changing.

Property prices in Porto

Houses in Porto have seen their prices and investment value skyrocket in the past few years. Some experts are actually talking about the possibility of a housing bubble that could possibly burst into a terrible crisis for the entire country. Be that as it may, demand keeps on rising, and so do prices. If you want to be sure you are not making a mistake when buying a house, be sure to check INE's website (the Portuguese National Institute of Statistic) for the most up-to-date trends in the housing market and other areas.

Take a look at Porto's downtown values (2,939 EUR per square foot) compared to 1,852 EUR per square foot for Boavista, and 1,650 EUR per square foot in Bonfim, a popular neighbourhood near the city's main tourist centre. Location is critical when talking about prices!

Procedures for buying property in Porto

The process of buying property in Porto is everything but simple. You are going to need a lot of paperwork and it is easy making a mistake and having to start the process all over again. If you are considering buying a house or property in the city's historic centre, then you will definitely need a Portuguese lawyer as houses in this area usually require specific licensing and permits, especially if you're planning on doing renovations.

If you are new to the area, it is definitely better to arrange your property purchase via a real estate agency.

Important:

Real estate agents in Portugal need to be government-registered and have a license number issued by the Association of Real Estate Agents (Associacao de Mediadores Imobiliarios). To check if the agent you are planning to work with is officially registered, you can contact the Instituto da Construcao e do Imobiliario.

You should also be aware that real estate agents in Portugal work in the interest of the seller — and receive their commission from the seller as well. The good news here is that you won't have to pay commission when buying a home. However, to make sure someone is looking out for your interests as well, it is best to get independent advice before signing any contracts.

If you do decide to go through a real estate agency, here's a list of the biggest real estate agencies in Portugal:

  • RE/MAX
  • Era
  • Century 21
  • IMO
  • And Sapo

Buying a property in Porto can be a tremendous investment opportunity — especially if you don't need to rely on bank credits to proceed with the buy. Remember that laws keep being altered and tweaked as days go by, so it is very important to ensure you have skilled professionals and specialists on your side to make sure you have a smooth experience.

Useful links: 

Renting options in Porto

Association of Real Estate Agents (Associacao de Mediadores Imobiliarios)

Portuguese National Institute of Statistic

We do our best to provide accurate and up to date information. However, if you have noticed any inaccuracies in this article, please let us know in the comments section below.