Tips for buying a home in Portugal
300 days of sunshine a year, unique cities steeped in history, the mix of modernity and tradition… It’s impossible to list all of the reasons to invest in Portuguese real estate.
Famous not only for its lifestyle but also for its Golden Visa programme, Portugal has also attracted many international investors who are keen to get on the path to European citizenship as well as the many who want to relocate or retire here. But before rushing into things, here are the key five things buyers need to consider.
New build, renovation or resale?
Lisbon is the most sought-after city in Portugal for property investment and it is incredibly diverse too as each district has a unique ambience as well as a distinct array of properties. Whilst no one can make this decision for you, there are pros and cons for each residence type.
Going for a new-build property inevitably means that you have to wait before your property is completed and it can sometimes be hard to see yourself in an apartment that you have never visited or seen before. Thanks to modern tools, many companies provide excellent visual representations of what the end result will be as well as virtual tours. Despite the wait, a new-build property generally means that you will have a superior level of comfort and you will tend to have access to a more comprehensive range of on-site facilities such as parking, a concierge, a spa or a gym.
On the other hand, resales generally have the benefit of being aesthetically charming and they are eady to move in or rent it out immediately. However, resales may require additional work and have already been lived in before which means that not everything would necessarily be perfect.
Renovated properties fall halfway in between the two options outlined above and are quite common both in Lisbon and in Portugal as a whole. Whilst you can’t occupy renovated properties straight away, they often offer the charm of a quintessential Portuguese building whilst providing the comfort of a modern building.
Golden Visa – what to expect?
If you want to invest in Portuguese real estate in order to obtain a Golden Visa, then please read our complete guide to the Portuguese Golden Visa programme. Half a billion euros have already been invested through the programme this year and August was another successful month for the Golden Visa programme with a total of €57m invested and 107 residency permits granted.
As a reminder, at the beginning of the year, it was announced that the hugely popular Golden Visa programme was expected to change at the end of 2020 and it would no longer be possible to apply for a visa if investing in property in a coastal area like Lisbon. However, the Ministry of Foreign Affairs announced in April that the Golden Visa changes were “not a priority” at the moment due to the global crisis. A recent article announced that the changes might, however, come into effect anyway at the beginning of next year, meaning that those wishing to access the programme will need to act quickly. However, it is important to acknowledge that no official announcement has been made by the Government and the Association of Real Estate Developers and Investors (APPII) has requested a transition period. We are expecting an announcement very soon.
We recommend that Golden Visa investors who are interested in coastal areas should progress with their purchase quickly in case the scheme comes to an abrupt end. If the changes go ahead, investors will need to register their interest before the end of November so they have enough time to complete the necessary procedures.
Generally speaking, it is always important when buying a property in Portugal, especially in the case of a new-build property, to check that the property has a horizontal licence as this enables you to start the Golden Visa process straight away. In this period of uncertainty, this is a no brainer.
It’s all about the location
Whether your goal is to relocate, buy a second home or generate rental yields, location is at the centre of everything.
Especially in Lisbon, pay special attention to the neighbourhood if you want to rent out your property on a short-term basis. To prevent Lisbon from turning into a museum city with just tourists, short-term lettings and empty homes, the council has prohibited short-term rentals in the most central and touristic parts of the capital. Even though it is sometimes possible to apply for a licence, these are really hard to get in these areas. Make sure you invest in the right neighbourhood where short-term rentals are possible or in an existing property with a transferable licence.
Similarly, if you are relocating to Lisbon or looking for a secondary residence for the holidays, think about the feel of the neighbourhood and how it matches your lifestyle. Living in charming and traditional Graça doesn’t have the same feel as living in touristic Chiado or Baixa. Plus, up-and-coming areas like Marvila have a completely different vibe. The last thing to consider in terms of location is that Lisbon is spread across seven hills, so make sure you can keep up with the climb on a daily basis if you have your heart set on a hilltop neighbourhood!
A property that suits you
But the most important thing to consider when buying a property in Portugal is the property in itself. Once you have made your decision in regards to the location and the type of property you want, think about all the things that make you feel at home. It might be design features such as traditional tiles, moulded ceilings or a fireplace. Think about exterior space too. Gardens, balconies and terraces have become even more sought-after following the strict lockdowns earlier this year.
Think about the practical aspects too. For instance, a lift might be a given in a brand-new apartment building, however, not all renovated or historic properties have been fitted with one. Parking is also a rarity in Lisbon, so do take this into consideration if you plan on driving a lot.
Finally, think about the kind of on-site facilities that you would like to have, especially in the case of a buy-to-let purchase. In many cases, new-build properties or ones that have been extensively renovated will be well suited to holidaymakers for example as they often come with communal facilities such as gardens, spas, swimming pools, services, restaurants, shops etc. These features will make your property more attractive on the short-term rental market and may be of use to you too.
Think about the future
Finally, buying a property is not just about the lifestyle. It is also about the investment potential and what you want to get out of it.
Think about the value of your property in the future when you may decide to resell it. Try to find a location that will either always have traction because they are touristic and will never lose value, or places off the beaten track which are being regenerated and set for capital appreciation. A hidden gem in Lisbon’s east end, Marvila is set to become a major innovation technological hub in the years to come, largely thanks to the opening of Hub Criativo do Beato. This up-and-coming neighbourhood has already started its transformation but is still in its early stages and prices are still lower than many other Lisbon neighbourhoods.
Explore our selection of properties for sale in Marvila.