Nestled along the Douro River in northern Portugal, Porto is the second-largest Portuguese city and is popular for its historic neighborhoods, lively cultural scene, and proximity to stunning beaches.
In addition to the rich history, cultural attractions, and incredible gastronomy –Porto is the next venue for the Michelin Guide Gala in 2025 – Porto has also become an attractive destination for local and international buyers interested in making real estate investments in Portugal.
House prices and the cost of living are fairly affordable compared to other Western European cities, and this, combined with the city’s unique architecture and traditional charm, makes it an attractive investment option.
In this guide to buying property in Porto, Portugal, we will explore the city’s real estate landscape, explain the property buying process, and discuss the benefits of working with a real estate professional who can offer you insightful real estate expertise.
An Overview of Porto's Property Market
Porto is a beautiful city offering stunning beaches nestled along the Atlantic Ocean, scenic open green spaces, and stunning views from many of the central districts along the Douro River to be enjoyed while sipping on good wine.
As a testament to this city’s rich culture and sought-after cuisine, the Michelin Guide recently announced that Porto will be the 2025 venue for the Michelin Guide Gala, an annual event that acknowledges the best restaurants in Portugal.
Adding to Porto’s title as an attractive option for real estate investment, The Portugal News recently reported that a number of property owners in Porto are also now interested in turning their commercial properties into residential real estate options in hopes of gaining rental ROI.
In addition to this, according to Knight Frank’s 2023 Wealth Report, Porto secured the 10th position as one of the world’s fastest-growing luxury real estate markets, surpassing sought-after international real estate investment destinations like the Hamptons, the Cayman Islands, and Cannes.
Real Estate Investment in Porto, Portugal: Property prices and rental yields
Whether you are looking for modern apartments along the winding cobblestone streets of the historic center of Porto, luxury condos, or spacious properties featuring all the amenities, like private pools, you will need for a large family, Porto offers a wide range of property types on the market.
In 2023, the average asking price for buying a house in Porto city center stood at €4,296 per square meter, while the average price for a house in the greater Porto municipality was €3,291 per square meter. The table below shows the average asking price per square meter for property in the different Porto neighborhoods in 2023. Bear in mind that the selling price is often lower than the average asking price, although it can also be higher in some instances.
Porto Metropolitan Area | Price Per Square Meter (€) |
Aldoar, Foz do Douro e Nevogilde | €5,678 |
Bonfim | €4,404 |
Campanhã | €3,520 |
Centro Histórico do Porto | €4,665 |
Lordelo do Ouro e Massarelos | €4,651 |
Paranhos | €3,531 |
Ramalde | €3,529 |
Strong rental yields, the city’s property value appreciation, and its growing popularity as a tourist hotspot make buying a house in Porto a good investment and have contributed to the city’s real estate boom over the past few years.
The beautiful city boasts a vibrant cultural scene that attracts visitors, young professionals, students, and expats, creating a greater demand for long-term rentals as well. In 2023, the Porto Metropolitan Area’s rental yields stood at 6 percent. The table below showcases 2023 rental yields in Porto real estate by area:
Porto Metropolitan Area | Rental Yield (%) |
Gondomar | 6.1 |
Maia | 5.3 |
Matosinhos | 6.1 |
Porto | 5.6 |
Valongo | 5.6 |
Vila Nova de Gaia | 5.9 |
The benefits of investing in Porto’s real estate market
Investing in real estate Portugal options in Porto offers a host of attractive benefits. As one of the oldest European cities and the historic city center being a UNESCO World Heritage Site since 1996, Porto captivates with its historic center and the unique charm of the city’s Ribeira neighborhood next to the Douro River.
This part of the city also boasts some charming waterfront properties which provide stunning views and easy access to lively bars, charming cafés, and top-tier restaurants, making it a sought-after destination for both residents and tourists.
Additionally, the city boasts a relatively low cost of living compared to many other European cities and even the Portuguese capital, Lisbon. You will come across affordable dining options, reliable public transport, and fair entry fees to cultural attractions.
Porto is also a very safe city that offers citizens and expats a high quality of life. The Porto district boasts five international schools, features excellent infrastructure and modern amenities, and excellent healthcare options.
The city’s extensive public transportation network, combined with one international airport, ensures convenient travel options, especially for frequent international travelers. Plus, Porto’s growing industrial and tech sectors are attracting startups and digital nomads, with co-working spaces such as The Social Hub, WeWork, and Porto i/o popping up around the city and creating a collaborative and growing business environment.
The Best Neighborhoods to Buy Porto Property
Porto, Portugal, has become an attractive city for your dream property acquisition. Its neighborhoods offer an incredible selection of property types and amenities, from the historic center in central Porto to the stunning wine region nearby in the Douro Valley of northern Portugal.
Porto has also become one of the most sought-after luxury real estate markets to buy property in Portugal and Europe. Below, we explore a few of the best neighborhoods and areas for purchasing property in and around Porto.
Foz do Douro
Foz do Douro is an upmarket coastal area in Porto that has become one of the best places to invest in property. It features a number of property types, including modern apartments, beachside villas, spacious family homes with off-road parking, private gardens, and even a swimming pool.
Foz do Douro boasts a relaxed, coastal town vibe while still being just a few kilometers from Porto’s vibrant historic center. Its sandy beaches along the Atlantic Ocean, including Praia da Luz and Praia do Homem do Leme, provide stunning views for scenic walks.
The area is also known for its diverse dining scene, featuring both global and traditional Portuguese cuisine. Local highlights and historical landmarks like Mercado da Foz and its boutique shopping options and the 17th-century Castelo do Queijo fortress offer cultural enrichment and add to the Foz do Douro’s charm.
Matosinhos
Matosinhos, a coastal town just a short 20-minute drive northwest of Porto, is considered to be one of the best areas to purchase property in Porto. As part of the Greater Metropolitan Area of Porto, it offers an ideal balance of affordability and accessibility.
Known for its stunning beaches like Praia de Matosinhos and Praia de Leça da Palmeira, the area is home to over 13 gold-classified beaches and is a popular destination for surfers and water sports enthusiasts. In 2022, the Matosinhos municipality embraced urban renewal and sustainability and plans to make significant strides towards carbon neutrality by 2030.
With a unique blend of new architecture and historical landmarks, such as the Boa-Nova Lighthouse and Nossa Senhora das Neves fortress, Matosinhos offers diverse residential options. Local and international buyers can find everything from modern villas to traditional townhouses and, with stunning views of the Atlantic and all the amenties close at hand, Matosinhos looks set to thrive in the coming years.
Ribeira
Ribeira, nestled along the stunning Douro River, is one of Porto’s most vibrant and picturesque neighborhoods, making it an ideal area for property investment. The cobbled streets of Ribeira are lined with colorful 18th-century townhouses and traditional Portuguese eateries serving classic dishes like grilled sardines.
This popular neighborhood offers an authentic blend of historic charm and modern living, with landmarks like the Dom Luís I bridge and Palácio da Bolsa palace nearby. Ribeira’s proximity to the WOW entertainment district, featuring museums devoted to wine, chocolate, and more, further enhances its appeal to tourists and potential residents.
For digital nomads and young professionals seeking a cultural and scenic lifestyle, Ribeira offers a unique blend of Porto’s rich history, modern amenities, and lively atmosphere. Its waterfront views, historic architecture, and vibrant street life make it one of the most desirable areas for property buyers in Porto.
Bonfim
Located east of Porto’s historic center, Bonfim is a vibrant and upcoming area of Porto that offers a mix of unique living spaces and enticing investment opportunities, making it one of the top neighborhoods to buy property.
Although the area is not as centrally located as Ribeira or Campanhã, Bonfim is transforming from a commercial hub into a residential hotspot. Bonfim is located near cultural landmarks like Livraria Lello, an iconic bookstore, and the recently upgraded Mercado Bolhão local market, which reopened in 2022. The neighborhood provides easy access to Porto’s rich cultural offerings.
With its proximity to the Douro River, Bonfim presents a perfect blend of modern living and historic charm, making it a great place to consider for property buyers.
Campanhã
Campanhã, located in downtown Porto, is gaining popularity as one of the best areas to purchase property in the city. Despite not being the most traditionally desirable neighborhood, it offers investors a unique opportunity with affordable property prices and a variety of old houses and commercial properties with significant investment potential.
Known for its historical landmarks, such as the Nossa Senhora da Saúde chapel, just minutes from Campanhã train station, and popular attractions, like the FC Porto Museum, the area is also set to benefit from major infrastructure developments.
The upcoming 290km Porto-Lisbon high-speed rail line (LAV), with its first section between Campanhã and the coastal area of Oia, promises to enhance connectivity and attract further investment. These factors make Campanhã a promising location for property acquisition, with the potential for substantial returns.
Vila Nova de Gaia
Located along the Douro River across from central Porto, Vila Nova de Gaia is Porto’s neighboring city and one of the best places to buy property near Porto, thanks to its blend of coastal luxury and rich cultural experiences.
Vila Nova de Gaia is renowned for its iconic port wine cellars, where visitors can enjoy tours and tastings, as well as scenic views, while eating and drinking at cozy restaurants serving fresh seafood, especially in the charming fishing village of Afurada.
Residents of Vila Nova de Gaia also enjoy the city’s coastal town vibe with access to sandy beaches along the Atlantic Ocean like Praia da Madalena and the lively riverside road, Cais de Gaia. The addition of luxury hotels, such as the Hilton Porto Gaia, has further elevated the area’s appeal. With a cable car offering quick access to the top of the city and the nearby bridge to Porto, Vila Nova de Gaia is an ideal location for expats and investors seeking a relaxed yet vibrant lifestyle.
The Process of Buying Property in Porto
Now that you know the range of property prices in Porto, Portugal, and the best neighborhoods and areas to search for your ideal property, we can delve into the buying process and the steps it entails.
Legal process overview
Although not required by law, it is highly recommended that you work with a local real estate lawyer when buying property in Porto, Portugal, to ensure a smooth transaction. An experienced lawyer can provide valuable insights into the legal process and handle all aspects of due diligence, compliance, and contract negotiations regarding your property investment options.
Their in-depth knowledge of Portuguese property law could safeguard your investment and streamline the acquisition process. Real estate lawyers can also assist foreign property buyers with understanding the complexities of local regulations, ensuring all documentation is accurate and binding.
Having a reputable lawyer or law firm on your side will mean that you have access to a trusted advisor who can effectively mitigate risks and provide expert guidance, making the process of buying property in Porto both secure and efficient.
Requirements to buy property in Porto, Portugal
When buying property in Portugal as a foreign investor, you will need to apply for a Portuguese NIF number, and you are advised to open a Portuguese bank account. You will need a NIF, which is the Portuguese tax number to open a bank account and for other financial transactions in the country.
You can apply for your NIF number online or at the local tax office. Our partner, Global Citizen Solutions, offers a comprehensive guide to getting a tax identification number (NIF) in Portugal.
It is also vital to have all the essential documents ready to ensure the property purchase journey is seamless and legally compliant. To purchase property in Porto, 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: This document provides information about the property’s energy efficiency and must be presented to you by the seller. Read this guide, Portugal’s Energy Performance Certificate Explained, by our property partner Goldcrest to learn more.
- Imposto de Selo: The stamp duty payment is a tax required by the Tax Authority for property transactions.
- Caderneta Predial: The land register document contains information about the property, including its location, boundaries, and registered owner.
Working with real estate agents and legal professionals
When purchasing property in Porto, working with both real estate or buyer’s agents and legal professionals is essential for a smooth process. While online real estate portals provide an overview of the market, they cannot replace the value of private access to professionals with expertise in the local market.
Porto real estate agents are familiar with available properties and can offer insights that go beyond listings, ensuring you find the residential or commercial properties that meet your specific needs. However, it’s important to remember that real estate agents in Portugal typically represent the seller, often aiming for the highest sale price to increase their commission.
A local buyer’s agent, in contrast, works for the buyer, helping negotiate the best possible deal. Additionally, involving legal professionals can help you navigate the complexities of contracts and ensure that all aspects of the purchase are handled in accordance with Portuguese law.
Financing Your Property in Porto
If you dream of investing in the Porto property market but lack the upfront capital to purchase the perfect home, getting a mortgage in Portugal is possible. There are several Portuguese banks you can approach to apply for a mortgage.
Generally, the maximum amount you can borrow is determined by the loan-to-value (LTV) ratio, which is the ratio of the loan amount to the value of the property pledged as collateral. Below, we explore the types of mortgages available in Portugal and your options as a foreign investor.
Types of available mortgages
There are two main types of mortgages you can apply for when buying a house in Porto, Portugal. The first is a fixed-rate mortgage, which offers stability but includes a premium. A fixed-rate mortgage is ideal for buyers seeking protection against rate changes. However, non-residents face a 75 percent loan-to-value (LTV) ratio cap while residents can get up to 90 percent LTV ratio.
The second type of mortgage you can apply for is a variable-rate mortgage, which is linked to Euribor and features fluctuating monthly repayments. Additionally, early repayment on a variable-rate mortgage can incur a 0.5 percent charge on repaid capital for these loans.
Mortgage options for foreign buyers
Foreign buyers in Porto, Portugal, face different mortgage options depending on residency status. Portuguese tax or fiscal residents can obtain up to 90 percent loan-to-value (LTV) ratio for a primary residence, while non-residents may only receive 60-70 percent loan-to-value (LTV) ratio. It’s essential to consider the lower value between the purchase price and appraisal, along with various associated costs and fees, which include application and valuation fees
Budgeting and financial planning
Creating a detailed budget is essential for foreign property buyers in Porto, Portugal. Your budget should include all expenses, from application fees to essential property taxes. Having a clear financial plan ensures better clarity on costs and allows you to select properties within their price range confidently, leading to smarter property investment decisions.
Navigating the Tax Implications of Buying Porto Property
In the sections below, we will give you a brief overview of the property taxes you will be liable for when you purchase and own property in Portugal. Our Complete Guide to Property Taxes in Portugal offers more in-depth insight.
Property purchase tax (IMT)
Property purchase tax (IMT) must be accounted for during acquisition. The Imposto Municipal sobre as Transmissões Onerosas de Imóveis (IMT) (Municipal Tax on Onerous Transmissions of Real Estate) is a property transfer tax levied over the purchase price of the real estate in Porto you’re investing in and must be paid when buying the property.
The tax rate ranges between 0 and 10 percent. The 0 to 8 percent range depends on the price, location, property type, and your intended use for the property, while the fixed rate of 10 percent will apply in cases where the buyer has connections with territories that benefit from favorable taxation schemes, known as blacklisted jurisdictions.
Municipal Property Tax or Immovable Property Tax (IMI)
Once you have successfully purchased residential real estate in Porto, you will need to pay the annual Imposto Municipal sobre Imóveis (IMI), also referred to as the Municipal Property Tax.
Each of Portugal’s municipalities has its own tax rate, and IMI is levied on the property tax value (VPT), not on the price you paid for the property.
The Immovable Property Tax ranges from 0.3 to 0.45 percent for urban properties. Keep in mind that the range can also go up to 0.5 percent. The IMI rate applied to rural or rustic buildings is 0.8 percent.
Additional costs: Notary and legal fees
You will also need to include Notary fees in your budget. The Notary is the private entity responsible for providing you with the official documents that prove you are the owner of the property, and their fee usually amounts to between €500 and €1,000.
Additional fees during the purchase process include agency fees (which the property seller is responsible for paying), VAT on the property purchase price, and additional expenses like Stamp Duty.
Capital Gains Tax
Capital gains tax in Portugal applies to profits from the sale of capital assets located in Portugal. When you sell property in Portugal or acquire any investment gains from the sale of other assets, the Capital Gains Tax rate is 28 percent for individuals and 25 percent for businesses.
Portuguese tax residents pay 13.25 percent to 48 percent Capital Gains Tax on just 50 percent of their capital gains from the property sale, while non-residents pay 28 percent on the full gain amount. Certain exemptions and deductions may apply based on the property’s use and reinvestment.
Additional to IMI (AIMI)
Real estate owners who have purchased a property in Portugal valued at more than €600,000 will be subject to Additional to IMI (AIMI) AIMI tax rates are calculated according to the list below.
- 0.7 percent tax on owning property valued between €600,001 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
Common Pitfalls for Foreign Buyers
When buying a house in Porto, Portugal, or in any country for that matter, foreign buyers could face challenges that may complicate the process. One common pitfall is failing to enlist professional help, such as a real estate attorney or an experienced real estate or buyer’s agent who can guide you through international property acquisition.
Additionally, foreign buyers sometimes overlook essential costs beyond the listed price, such as mortgage fees, property taxes, notary fees, and registration expenses. Understanding local regulations and tax laws is also essential, as neglecting these can result in unexpected fines or financial obligations.
Another common error is investing in a location that doesn’t suit your lifestyle or fails to deliver the desired return on investment. Thorough research and consultation with experts can help mitigate this risk.
Finally, unforeseen problems, such as zoning changes or environmental concerns, can impact the property’s value or future use. By seeking professional services and relying on local expertise, buyers can navigate these complexities, avoid potential pitfalls, and ensure a smoother, more successful property purchase in Porto.
Find Your Dream Property with BE Global
BE Global Properties is the discerning property investors’ gateway to meticulously curated properties that transcend ordinary listings. Look no further when searching for your next dream home or investment property in the Portuguese luxury real estate market.
Explore our exclusive listings and work with our experts who offer market insights for smart investment choices and exceptional customer service to find the property investment perfectly tailored to your lifestyle.
Contact BE Global Properties today and start your journey to find your global haven.
Frequently Asked Questions about Buying Property in Porto
Should I live in Lisbon or Porto?
Deciding between Lisbon and Porto depends on your lifestyle preferences. Much like Lisbon, Porto offers a vibrant cultural scene and historical charm. However, Porto has a more affordable cost of living compared to Lisbon, and its expat community is smaller.
Is now a good time to invest in Porto real estate?
Porto ranks among the world’s fastest-growing luxury real estate markets, making it an attractive investment destination. Strong rental yields, property value appreciation, and its growing popularity as a tourist hotspot have fueled the city’s real estate boom, making now a great time to invest in Porto real estate.
Is buying real estate in Porto, Portugal, expensive?
Buying property in Porto is much more affordable than in Lisbon, Portugal. In 2023, the average asking price for buying a house in Porto city center stood at €4,296 per square meter, while the average price in the Lisbon city center stood at €6,009 per square meter.
Is it expensive to rent a house in Porto?
Renting is much cheaper in Porto than in the Portuguese capital city of Lisbon. According to Numbeo, a one-bedroom apartment in the Lisbon city center costs €1,411.76 per month, while a one-bedroom apartment in the Porto city center costs €1,023.68 per month.
Are there any international schools in Porto?
Yes, the Porto district boasts five international schools, including CLIP Oporto International School, Oporto British School, and Lycée Français International de Porto—LFIP.
What is public transport like in Porto?
Porto offers reliable public transport with an extensive network, making travel convenient throughout the city. Thanks to its airport, the city is well-connected internationally. Additionally, the upcoming high-speed rail line between Porto and Lisbon will further enhance connectivity.
Where do expats live in Porto?
Most expats are known to live in the areas of Porto’s historic center, Bonfim, Foz do Douro, Paranhos, and in Vila Nova de Gaia, just across the Douro River.
Does Porto have a beach?
The Porto district is known for its many stunning beaches. In Matosinhos, you will find 13 golden-classified beaches, including Praia de Matosinhos and Praia de Leça da Palmeira. In Vila Nova de Gaia, you will enjoy sandy beaches like Praia da Madalena, and in Foz do Douro, you will find coastal spots like Praia da Luz and Praia do Homem do Leme.
Is Porto expensive?
This depends on your lifestyle; however, the cost of living in Porto is considered to be quite affordable. According to Numbeo, the cost of living in Porto, including rent, is 14.5 percent lower than it is in Lisbon, and rent prices in Porto are 22.7 percent lower than in Lisbon.
Is Porto a safe city?
According to the 2024 Global Peace Index (GPI), Portugal is the seventh safest country in the world, which means Porto is a fairly safe city to live in and visit. According to Numbeo, Porto has a high safety index of 67.31 percent.
What is the best neighborhood in Porto to live in?
The best neighborhoods to live in Porto include the historic center and Ribeira, which have a vibrant riverside atmosphere, Foz do Douro, which offers coastal charm Cedofeita, which has an artsy vibe, and Boavista, which offers business and culture. Vila Nova de Gaia and Matosinhos also offer excellent lifestyle and investment opportunities.
Is Porto a nice place to live?
Yes, Porto offers a high standard of living and low crime rates, and it is very affordable compared to many other Western European cities.
Is Porto, Portugal, a good place to retire?
The affordable cost of living, rich history and culture, excellent healthcare facilities, and reliable public transportation are some of the many features that make the Porto district a good place to retire.
