Lisbon, Portugal’s captivating capital city, beckons with more than breathtaking beaches that hug the coastline from Cascais to Estoril. This vibrant city offers a sophisticated lifestyle, cultural treasures, and a welcoming community – a perfect fit for the discerning luxury property investor interested in buying property in Lisbon.
Over the past few years, Lisbon real estate investment has come to mean more than a financial benefit for rental income or property profits – it’s an investment in an unparalleled lifestyle compared to other European countries. Lisbon thrives as a major tourist destination, attracting young professionals, digital nomads, and affluent retirees seeking a European haven.
From the streets of Baixa offering an opportunity to experience Portugal’s rich cultural history to the chic boutiques of Chiado and the pulsating nightlife of Bairro Alto, Lisbon boasts an extraordinary array of neighborhoods, each with its own captivating charm.
Beyond its undeniable beauty and rich history, Lisbon fosters a welcoming and inclusive environment, making you feel instantly at home.
Understanding that navigating the intricacies of foreign property purchases can be daunting, this comprehensive guide will be your compass. We’ll delve into the Lisbon real estate market, outlining the key steps involved in acquiring luxury property. This includes essential contracts, transaction processes, and the finalization of paperwork and property deeds.
Crucially, we’ll emphasize the importance of partnering with legal experts and seasoned Portuguese buyer’s and real estate agents with valuable knowledge about the Portuguese property market. Their guidance will ensure a smooth and successful journey towards foreign property ownership, allowing you to embrace the luxurious lifestyle that awaits you in Lisbon.
Exploring the Lisbon Real Estate Market
Over the past few years, Lisbon’s real estate market has become a magnet for foreign investors, fueled by previously reasonable property prices and strong value appreciation. As the city’s popularity soars, average asking prices have climbed, reaching €6,009 per square meter in the Lisbon city center and €4,061 per square meter across the Greater Lisbon Area in 2023.
It’s important to remember that asking housing prices is a starting point, and the final sales price can vary and end up being higher or lower, more often than not. In the following sections, we’ll delve deeper into why buying property in Lisbon is a sound investment and explore the most promising areas to find your perfect luxury property.
Why buy property in Lisbon?
Lisbon’s allure transcends its stunning beaches and vibrant culture. This award-winning city (Europe’s 2023 Tech Capital) is celebrated for its innovation and economic stability, making it a prime investment destination. Here’s a glimpse into the wealth of opportunities buying property in Lisbon offers:
- Diverse investment options: Whether you seek a luxurious apartment, a charming villa, or office space, Lisbon caters to various investment goals.
- Expat haven: Lisbon’s flourishing tech scene, moderate climate, and rich cultural tapestry have drawn a thriving expat community. This growing demographic fuels the demand for rental properties in the short-term rental market as well as with long-term rentals, promising attractive rental income yields for property investment.
- Touristic appeal: Portugal’s tourism boom attracts local and foreign investors looking to purchase property. Owning a property in Lisbon allows you to capitalize on this ever-growing market, offering the potential for lucrative short-term rentals.
- Affordability with value: Compared to other major European cities, the capital city of Lisbon offers a compelling combination of affordability and property value. You can secure a commercial property, residential investment property, or dream property for yourself in this dynamic city at affordable prices.
Lisbon’s blend of tradition and modern vibrancy offers an exceptional lifestyle and a sound investment opportunity. The following section will guide you through the city’s most promising areas to discover your ideal luxury property.
Best areas in Lisbon for foreign buyers to purchase property
Lisbon’s neighborhoods offer exciting opportunities for expats seeking a balance between affordability and a vibrant city experience. While central Lisbon holds undeniable charm, venturing slightly outwards unlocks its diverse districts, each with its character and good investment opportunities when purchasing foreign real estate.
Considering the recent report by Confidencial Imobiliário, these areas offer lucrative investments when buying property in Portugal with strong rental yields. Alcântara, Arroios, Benfica, Estrela, Marvila, and Penha de França boast impressive gross rental yields, ranging from a strong 5.2 percent in Benfica to a stellar 6.6 percent in Marvila. Whether you prioritize trendy cafes or peaceful family life, Lisbon’s varied districts cater to various preferences, all promising a piece of Portugal’s dynamic capital city. Rental yields in some key neighborhoods are shown below.
- Alcântara: 5.4 percent
- Arroios: 5.5 percent
- Benfica: 5.2 percent
- Estrela: 5.4 percent
- Marvila: 6.6 percent
- Penha de França: 5.5 percent
Property Prices in the Lisbon Metropolitan Area
Lisbon’s real estate market is experiencing a boom, making it a hotspot for investors across other European cities and the globe. While the allure of charming neighborhoods and a sunny climate is undeniable, understanding the associated costs is crucial.
Thankfully, Portugal’s property purchase process is relatively straightforward. However, it’s good to remember that besides the purchase price, there are other associated costs to bear in mind, including notary and registration fees, attorney and legal fees, transfer tax, Stamp Duty, land registry fees, and lawyer fees if you choose to work with one.
Some of the best areas to find exclusive luxury apartments, villas, townhouses, commercial properties, and other residential properties in the Lisbon Metropolitan Area include:
- Santo António priced at €8,117 per square meter
- Santa Maria Maior is priced at €6,700 per square meter
- Estrela priced at €7,231 per square meter
- Misericórdia priced at €7,021 per square meter
- Parque das Nações priced at €7,728 per square meter
- Campo de Ourique priced at €6,367 per square meter
To help you navigate this exciting market, we’ve compiled a table showcasing the average price per square meter across some of Lisbon’s most sought-after neighborhoods for Lisbon property. This data will serve as a springboard for your property search in the Portuguese real estate market and help you pinpoint the perfect fit for your budget and lifestyle for your real estate investment.
Districts | Average Price (€/sqm) |
Ajuda | €5,043 |
Alcântara | €6,324 |
Beato | €4,587 |
Benfica | €4,473 |
Campolide | €6,657 |
Carnide | €4,469 |
Lumiar | €5,016 |
Marvila | €5,530 |
Olivais | €4,587 |
S Domingos de Benfica | €5,667 |
Alvalade | €5,820 |
Areeiro | €5,187 |
Arroios | €5,885 |
Avenidas Novas | €7,126 |
Belém | €6,548 |
Campo de Ourique | €6,367 |
Estrela | €7,231 |
Misericórdia | €7,021 |
Parque das Nações | €7,728 |
Penha de França | €4,402 |
Santa Clara | €3,955 |
Santa Maria Maior | €6,700 |
Santo António | €8,117 |
São Vicente | €5,018 |
The Best Neighborhoods for Investing in the Lisbon Property Market
Lisbon’s property market offers exciting opportunities for investors and expats looking for the perfect neighborhood to settle in this vibrant city. The sections below will examine the city’s most popular neighborhoods where expats and Portuguese citizens prefer living in Lisbon. We’ll explore the unique charm and advantages of each area and look at property prices so you can find the perfect investment that aligns with your lifestyle and financial goals.
Buying property in Alfama and Graça
Alfama and Graça both offer a wealth of Portuguese history and undeniable charm. and are two of Lisbon’s most popular neighborhoods to buy property. Alfama boasts hidden gems like secret gardens and breathtaking city views, while Graça delivers similar magic at a slightly lower price point and with a quieter atmosphere. Both neighborhoods offer excellent access to the city center on foot – although you will need to get used to the hills -making them ideal for expats seeking a blend of tradition, modern convenience, and strong rental potential for investors. With average prices hovering around €6,700 per square meter in Alfama and €5,018 per square meter in Graça (2023 figures), these historic havens offer a captivating entry point into Lisbon’s dynamic property market.
Buying property in Avenidas Novas
Avenidas Novas offers a unique blend of modern luxury and historic charm. Brimming with upscale shops, leafy avenues, and renowned art institutions like the Calouste Gulbenkian Museum, this prestigious neighborhood is a magnet for businesses and residents. In 2023, the average asking price for property in Avenidas Novas stood at €7,126 per square meter. The chic neighborhood offers access to Lisbon’s thriving commercial center, proximity to a network of established companies in Lisbon, and luxury living in a vibrant community.
Buying property in Belém, Ajuda and Restelo
The historic neighborhoods of Belém, Ajuda, and Restelo, to the west of the city, boast world-class museums, sprawling gardens, and breathtaking views of the Tagus River. Ajuda and Restelo are known for their tranquil charm, while Belém offers iconic landmarks and a vibrant cultural scene. With average asking prices around €4,875 per square meter in Belém and €4,222 per square meter in Ajuda in 2023, these districts offer to attract visitors and residents with their blend of affordability, cultural immersion, and stunning natural beauty, making them the perfect choices to buy property in Lisbon.
Buying property in Baixa and Chiado
Investing in property in Baixa and Chiado offers the best of both worlds: A central location near the vibrant nightlife of Bairro Alto, historic Alfama and Castelo, and Lisbon’s premier shopping area, Chiado. You will be near touristic hotspots like Praça do Comércio and Rossio Square, as well as charming cafes where you can soak up the city’s culture. With easy access to the town and a range of shops, Baixa and Chiado are ideal for those seeking an integrated and exciting Lisbon experience. In 2023, the average property price in these two neighborhoods that are part of Lisbon’s Santa Maria Maior parish stood at €6,700 per square meter.
Buying property in Bairro Alto
*Image alt text: Buying real estate in Lisbon
Not too far from Baixa, the district of Bairro Alto offers a vibrant mix of trendy restaurants, celebrated nightlife, and Fado houses in its winding streets. While some areas can be noisy, quieter pockets exist, making it ideal for those seeking a lively yet residential atmosphere. If you want to buy property in Lisbon and are attracted to this vibrant neighborhood in Misericórdia, you can expect an average price of €7,021 per square meter.
Buying property in Campo de Ourique
Campo de Ourique is a peaceful residential area known for its charming artisanal shops, delightful indoor food market, and relaxed vibe. This family-friendly expat haven offers easy access to Lisbon’s city center, making it ideal for those seeking a convenient and comfortable home base. 2023 property prices in Campo de Ourique averaged €6,367 per square meter.
Buying property in Intendente and Mouraria
Renowned for being Lisbon’s trendier districts, Intendente and Mouraria offers residents and visitors an attractive, youthful vibrancy surrounded by indoor markets, historic cafes, and unique street art. These neighborhoods in the northern area of Santa Maria Maior generally attract a younger crowd in search of a high-quality and exciting lifestyle, making them perfect if you buy property in Portugal for rental income. Property in Santa Maria Maior averaged €6,700 per square meter.
Buying property in Lapa and Santos
Located in the sought-after area of Estrela, Lapa, and Santos are known for their peaceful yet trendy environments, which cater to families and young professionals alike. The neighborhoods comprise well-maintained buildings, a mix of classic cafes, and new restaurants, creating a charming atmosphere. Popular with expats and entrepreneurs, property in Lapa and Santos averaged €7,231 per square meter in 2023.
Buying property in Parque das Nações
Parque das Nações offers a modern escape for young professionals and families. Situated on the Tagus River, away from the city center’s buzz, this contemporary neighborhood is known for its clean, modern architecture and high-quality luxury properties. The Pavilhão do Conhecimento Science Museum and Lisbon Aquarium are nearby, so it’s a perfect fit for families seeking a contemporary, family-friendly environment. In 2023, the average property price in this sought-after neighborhood area stood at €7,728 per square meter.
The Portuguese Real Estate Market: Is it worth buying property in Lisbon?
There are many good reasons for purchasing property in Lisbon. Seeking the services of real estate professionals like buyer’s agents or experienced local real estate agents will help you understand the intricacies of the property buying process in Portugal’s capital city, navigate setbacks, and ensure you make an excellent financial investment. Some of these key advantages of buying property in Portugal include:
- No restrictions on foreign property investment
- Investing in a dynamic market with a high return on investment potential
- Low cost of living compared to most European countries
- Sublime climate with incredible summers and mild winters
- Top-quality education and healthcare services
How to Buy Real Estate in Lisbon: A Step-by-Step Guide
Buying property in Lisbon is a surprisingly achievable feat for non-EU citizens. This step-by-step guide, compiled in the table below, simplifies the process for foreigners seeking a residential haven, a thriving commercial space, or even a luxurious pied-à-terre in this captivating city. From navigating the purchase process to understanding legal requirements, the table equips you with the knowledge to find your dream property in Lisbon and confidently seal the deal.
Steps | Details |
Step 1: Obtaining a Portuguese Tax Number | Non-EU citizens and EU citizens purchasing property in Portugal will need a NIF, the Portuguese tax number, to open a bank account and complete financial transactions in Portugal. If you are a non-EU citizen, you will need a fiscal representative to apply online or at the local tax office. |
Step 2: Secure financing for your property | Assess your finances, explore mortgage options from Portuguese banks, and understand associated costs such as taxes, legal fees, and property registration expenses. |
Step 3: Finding a property | Set a budget and research the Portuguese real estate market, focusing on location, amenities, and rental potential. Seek guidance from real estate professionals like buyer’s agents or real estate agents. |
Step 4: Purchasing the Property | Once you find a suitable property, negotiate an offer with the seller, potentially facilitated by a real estate professional. Consider having a buyer’s agent representing your best interests during negotiations. |
Step 5: Signing the Promissory Contract (CPCV) | After an offer is accepted, a Reservation Agreement may require a refundable fee. The Promissory Contract (CPCV) finalizes the deal, often with a 10 percent deposit, signed in front of a Notary. |
Step 6: Signing the Escritura | The Escritura, or Final Deed, officially transfers property ownership. Signed before a Notary, it involves paying remaining balances and fees. After signing, the buyer becomes the official owner, concluding the process. |
Step 7: Paying Fees and Complying with Property Tax Obligations | There are other costs involved besides the standard property prices including legal fees, property taxes, property transfer tax, and possibly capital gains tax if you ever decide to sell the property. |
Requirements for a Successful Property Purchase
An essential part of buying property in Lisbon and Portugal is applying for a Portuguese NIF number and opening a bank account. These two requirements will also be helpful for any other transactions you must complete in the country, especially if you plan on investing in the real estate market for rental income or acquiring a commercial property. Find out more in this guide, How to Get a NIF (Tax Identification Number)Portugal: A Guide for Expats, by our residency and citizenship partner Global Citizen Solutions.
Portuguese tax number
To open a bank account in Portugal, you will need an NIF, which is the Portuguese tax number. If you’re in Portugal you can apply for a NIF at the local tax office, but if not you can also apply for your NIF number online. To make the process as easy as possible, non-EU citizens are advised to have a fiscal representative or an attorney to assist them.
Portuguese bank account
After acquiring a Portuguese Tax Number (NIF), it is recommended that you open a Portuguese bank account. With a Portuguese bank account, you can avoid significant foreign currency transaction fees when making your purchase, giving you one less cost to worry about besides the purchase price. Portugal has a great selection of banks to consider, and some of these Portuguese banks even offer mortgages for foreign buyers.
Required Documents to Buy Property in Lisbon
Gathering the necessary documents is crucial to ensure a smooth and legal property purchase in Lisbon. Working with a multidisciplinary buyer’s agent like Goldcrest or a real estate lawyer will help you acquire the required paperwork and conduct thorough due diligence on the property you’ve set your sights on. Their assistance will streamline the buying journey and give you peace of mind throughout the transaction. To buy property in Lisbon, you will need the following documents:
- Photo ID: A valid identification document that verifies your identity
- Contrato Promessa de Compra e Venda (CPCV): The buying contract or property deed that outlines the terms and conditions of the property purchase
- Energy Certificate: The property’s energy certificate outlining the energy efficiency of the property. This guide, Portugal’s Energy Performance Certificate Explained, by our property and lifestyle partner Goldcrest offers all you need to know.
- Imposto de Selo: The Stamp Duty payment, which is a tax required by the Tax Authority for property transactions
Caderneta Predial: The land register document that contains essential property information, including its location, boundaries, and registered owner
Exploring Taxes and Fees when Buying Property in Lisbon
Like Portuguese citizens, expats pay taxes when purchasing property in Portugal and once they’ve attained property ownership.
Below, we will explore these additional real estate acquisition costs under two sections: First, the taxes must be paid at the time of purchase, and second, the taxes and fees to be paid annually by property owners after concluding the purchase.
You should also consider additional costs, such as legal fees, Notary fees, and Land Registry fees.
At the time of purchase
In addition to the purchase price, there are two central property taxes to consider when buying real estate in Lisbon: Property Transfer Tax (IMT) and Stamp Duty. These taxes are explained in more detail below.
Property purchase tax (IMT)
The Imposto Municipal Sobre as Transmissões Onerosas de Imóveis (IMT) or Municipal Tax on Onerous Transmissions of Real Estate is a property transfer tax paid when purchasing Portuguese property. It ranges from 0 to 10 percent of the property prices. The amount is also influenced by other factors, including the property type, location, and whether the property is to be the primary or secondary home.
Stamp Duty
Imposto do Selo (Stamp Duty Tax) is an additional transaction tax that may need to be paid. Real estate transactions are usually subject to a rate of 0.8 percent.
Taxes after the property purchase
Beyond the initial purchase costs, property ownership in Lisbon incurs annual taxes. Here’s a breakdown of two such taxes: Municipal Property Tax (IMI) and Wealth Tax (AIMI).
Municipal Property Tax (IMI)
The (IMI) Imposto Municipal sobre Imóveis (Municipal Property Tax or Immovable Property Tax) is an annual tax established annually by the municipality and is determined by the area that your property is located in. The IMI is based on the tax value of the property rather than the price paid for the property, and the rate usually falls between 0.3 and 0.5 percent for urban properties and 0.8 percent for rural properties.
Wealth Tax (AIMI)
Ranging between 0.7 to 1.5 percent and dependent on the property price, the Portuguese Wealth Tax (AIMI) is applied to properties that cost more than €600,000. The rates on wealth tax are usually calculated as follows:
- 0.7 percent tax on owning property valued between €600,000 and €1 million
- 1 percent tax on property valued between €1mil and €2 million
- 1.5 percent tax on property if its total value is above €2 million
Find Your Dream Property with BE Global
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Explore our exclusive listings and work with our experts who offer market insights for smart investment choices and exceptional customer service with the goal of ultimately finding the property investment perfectly tailored for your lifestyle.
Contact BE Global Properties today and start your journey to find your global haven.
Frequently Asked Questions about Buying Property in Lisbon, Portugal
Can foreigners buy property in Lisbon?
There are no legal restrictions on foreigners when it comes to buying property. However, it’s important to note that residency permits are required for non-EU citizens who intend to live in Portugal.
Is it expensive to buy a house in Lisbon?
Lisbon’s property prices are on the higher end compared to other parts of Portugal. They are more in line with property prices in different Western European cities, such as the capital of Portugal. In 2023, the average asking price for property in Lisbon ranged from €8,117 per square meter in more upmarket neighborhoods like Santo António, while the greater Lisbon Metropolitan area offered options priced from €3,955 per square meter in neighborhoods like Campo de Santa Clara. Additionally, the average asking price for property in the Lisbon city center was €4,061 per square meter in 2023.
Is it expensive to rent a house in Lisbon?
According to the latest cost comparisons on Numbeo, a one-bedroom apartment in the city center currently has an average monthly cost of €1,318.63. In contrast, a one-bedroom apartment outside the center costs around €915.55. Remember that these are just averages; prices can vary depending on size, location, and amenities.
Why choose Lisbon over other European cities?
Lisbon offers a compelling combination of lifestyle and investment potential with its vibrant international scene, growing tech sector, and cultural richness. This attracts expats seeking a moderate climate, easy access to other parts of Europe (thanks to Lisbon’s airport and transportation network), and excellent international schools for families. Additionally, Lisbon’s solid rental market presents attractive opportunities for investors, with options ranging from luxury apartments to family properties.
Are there any international schools in Lisbon?
There are 30 international schools in Lisbon and the Greater Lisbon Area, making it one of the best cities for expat families to relocate to in Portugal. You can explore the Full List of International Schools in Portugal guide developed by Global Citizen Solutions. The comprehensive guide will include a complete list of the international schools in the country to help you prepare your family for your big move.
Is it better to buy or rent in Lisbon?
Choosing between buying and renting in Lisbon depends on your long-term plans. Renting can be expensive, with average salaries only sometimes keeping pace. Mortgages, however, are obtainable, with Portuguese banks typically offering loans for up to 60 percent of the property value, potentially even more depending on your situation. Additionally, Lisbon’s stable property market growth suggests potential for appreciation, making buying an attractive option for long-term investors. A good way to come to your decision is to rent a property in a neighborhood that you are interested in living in, doing research on the real estate market there and considering the pros and cons of buying vs renting.
What are the most popular areas to buy property in Lisbon?
Lisbon’s property market features several popular areas, particularly those concentrated in the city center. Here, neighborhoods like Baixa, Avenida da Liberdade, Bairro Alto, and Príncipe Real are highly sought-after for their vibrant atmosphere and upmarket properties in prime locations.
Is it a good idea to invest in property in Lisbon?
Lisbon can be a good investment. The market is stable with growth potential, foreign ownership is welcomed, and the overall cost of living makes investment more attractive. However, consider your goals – buying might be ideal for long-term investment, while short-term stays might favor renting.
Where is the best place to live in Portugal?
The best place to live in Portugal ultimately depends on your needs and priorities. Portugal caters to various lifestyles, including Lisbon’s vibrant city atmosphere, Porto’s historic and cultural authenticity, and the Algarve’s stunning beaches and laid-back coastal lifestyle.
What is the current state of the real estate market in Lisbon?
Lisbon’s real estate market is experiencing steady growth, driven by strong demand from foreign investors. This has led to rising average asking prices, reaching €6,009 per square meter in the city center in 2023.
Where to buy cheap property in Lisbon?
The neighborhoods of Penha de França, Campo de Santa Clara, and Olivais in Lisbon are more affordable areas in which to buy property. The asking prices ranged from €3,955 to €4,587 per square meter in late 2023.
What are the pitfalls of buying property in Lisbon?
Buying property in Lisbon can be exciting, but there are potential pitfalls. These include navigating complex legal issues like property titles or hidden debts, ensuring compliance with local regulations and taxes, and unexpected challenges related to the chosen location. Using a local real estate agent or buyer’s agent is highly recommended to avoid these issues.
