Portugal has become one of the most popular destinations for property investors right now. This is due to its low cost of living, friendly locals, and excellent weather.
However, there are still plenty of misconceptions surrounding property for sale in Portugal.
Many people think that buying property in Portugal is too expensive, or that they don’t qualify for a mortgage.
In reality, however, buying property in Portugal is much easier than most people realize.
Here are six common misunderstandings about buying property in Portugal right now.
#1. You Need to Speak Portuguese to Own Property in Portugal
Although English is widely spoken in Portugal, you won’t necessarily need to speak fluent Portuguese to own property here. Many expats find that speaking basic Portuguese helps them navigate the country better.
I Don’t Speak Portuguese – What Should I Do?
Don’t worry! Most real estate agents speak English. So, they should be able to communicate with you without too much trouble. But if you do want to talk to someone who also speaks your native language (if not English), you can always ask around.
#2. There Are No Tax Benefits for Investing in Property in Portugal
This is true, unless you qualify for the Golden Visa program. Tax benefits might apply if you qualify for that scheme, however under certain requirements.
If you buy a property like a Portuguese citizen, you won’t have tax benefits. associated with investing in property in Portugal. However, there are tax advantages for investments made abroad (including properties). For example, you may qualify for a reduced rate of taxation on foreign earnings.
#3. You Can Only Buy Land in Portugal
While land and then buying a home is the primary form of property ownership in Portugal, you can purchase commercial buildings, residential properties, or apartments. In fact, many expats choose to buy properties in apartment complexes rather than individual homes.
This might be related to their preference for city centers, however, things are changing and now many people are choosing to live in rural areas. And with the new Portugal golden visa rules that were implemented in the beginning of 2022, this ratio might go up even further.
The government decided to limit the requirements for residential properties in city centers and regions like Porto, Lisbon, the Algarve and Silver Coast. However, it lowered the barrier for everyone who might be interested in investing in interior areas, as well as so-called low density areas. This measure was applied in order to incentivize the investment in such areas, which in Portugal’s case are getting almost inhabited and with a high average age of its habitants.
#4. The Portuguese Real Estate Market is in a Bubble Right Now
No one can say for sure, like in other international real estate markets its occurring, but the Portuguese one isn’t yet on a bubble. The reason why is because the market is still relatively small compared to other countries. It also doesn’t seem to be growing at the same pace as other markets.
But the main factor might be related to the foreign interest in the property market which has been surpassing the national demand.
#5. You Will Be Able to Sell Your Property in Portugal Any Time Soon
Unlike other countries, such as Spain, Italy, and France, you cannot sell your property in Portugal without first obtaining permission from the Ministry of Finance.
However, once you obtain approval, you can sell your property within some months, even less.
So, if you plan to buy property in Portugal, you should avoid these misunderstandings. Instead, research the country thoroughly and learn everything you can about property laws, regulations, and taxes.
When you understand the rules and regulations governing property in Portugal, you will be prepared to make informed decisions regarding your future investments.
#6. Buying Real Estate in Portugal Requires an Investment Banker
This misconception is understandable considering the country is quite famous for its Portugal Golden Visa program. Some still think of it as a tax haven. However, investing bankers are not required to invest in any specific asset class. They simply provide advice and guidance to clients based on their expertise.
In addition, investment bankers are tightly regulated. If you are thinking of investing in property in Portugal, you don’t need to hire an investment banker, nor a local consultant in real estate. However, the latter will definitely help you in the process and might get you a more straightforward and hassle free process.
What Do I Need to Know Before Moving to Portugal?
Before moving to Portugal, you should familiarize yourself with different topics, including:
Local Laws, Language Requirements, Visa Rules, Health Care System, Education System, Banking Regulations, Public Transport, Water Supply, Electricity Costs, … And the list could go on and on.
However, don’t get too worried about knowing everything related to them. Portugal has been improving in all the registration process, both when buying a house but also on all the paperwork needed for foreigners that are willing to reside there.
The only thing that might take some time is getting used to the local language. But this is not something that you have to worry about. The Portuguese people are very friendly and they love welcoming new faces. So, it shouldn’t be too hard to communicate with locals.
Property for sale in Portugal has been one of the most popular investment opportunities in recent years. Portugal is an attractive destination for investors due to its low cost of living and stable economy.
However, property for sale in Portugal is often misunderstood specially by potential foreign buyers. We’ve covered some of the most common misconceptions about property for sale in Portugal and hope that you find our information useful.