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A Comprehensive Guide to Investing in Lisbon Real Estate

Lisbon offers a wealth of reasons why it is such an attractive European capital city for buying property. From its rich culture to a perfect climate, Lisbon’s real estate market has moved from strength to strength over the years, becoming the home of expats from all walks of life.

This stunning city boasts beautiful beaches on the Lisbon coast, vibrant neighborhoods, and prime investment opportunities, all while maintaining a low cost of living compared to the rest of Europe. Additionally, low crime rates contribute to a high quality of life in Portugal’s capital. However, factors like property prices, neighborhoods, and language barriers may make it challenging to begin the process without professional assistance.

In this comprehensive guide, we’ll delve into everything you need to know about Lisbon real estate to help you find your dream home, holiday home, or investment property in Lisbon. We’ll also provide essential information on the best neighborhoods to consider and how to get the highest returns on your investment.

An Overview of the Lisbon Real Estate Market

Portugal’s real estate sector has witnessed significant growth over the years, and Lisbon, the country’s capital city, has emerged as a magnet for visitors and expats alike. The appeal of Lisbon’s real estate market is evident through the 50 percent growth rate in real estate investments between 2017 and 2022.

By 2024, Lisbon is anticipated to rank among the top eight other European cities with the best real estate investment opportunities. This potential growth is attributed to Lisbon’s unique blend of traditional charm and modern amenities, making it an ideal location for relocation, buy-to-rent investments, or holiday homes.

The lack of restrictions on foreign property ownership also simplifies the investment process, attracting a diverse range of investors. Lisbon offers an array of property options, from modern apartments and waterfront properties to spacious family homes. The city’s high quality of life, coupled with its potential for high returns on investment, makes it a preferred choice for both investors and expats.

Lisbon’s lifestyle attributes, including its world-class restaurants, favorable climate, and proximity to stunning beaches, further heighten its appeal. Additionally, Portugal’s high English proficiency and excellent connectivity to Europe and beyond make it an attractive destination for foreign buyers interested in making a Lisbon real estate investment.

The average price for Lisbon property

The table below showcases the average price for property in Lisbon, whether you’re interested in purchasing a second home or a rental investment. It’s important to note that the prices reflected below are averages, and luxury properties in sought-after neighborhoods will cost more. Additionally, the average asking price will differ from the final sales price, with the final price often being lower than asking.

Lisbon Neighborhoods	Price Per Square Meter (€)
Lisbon City	€6,009
Santo Antônio	€8,117
Parque das Nações	€7,728
Alcântara	€6,324
Misericórdia	€7,021
Avenidas Novas	€7,126
Estrela	€7,231
Belém	€6,548
Santa Maria Maior	€6,700
Campolide	€6,657
Campo de Ourique	€6,367
Ajuda	€5,043
Marvila	€5,530
Alvalade	€5,820
Arroios	€5,885
São Vicente	€5,018
São Domingos de Benfica	€5,667
Areeiro	€5,187
Lumiar	€5,016
Carnide	€4,469
Olivais	€4,587
Beato	€4,587
Benfica	€4,473
Penha de França	€4,402
Santa Clara	€3,955

Rental yields in the Lisbon Metropolitan Area

In 2023, the Lisbon city center average for rental yields was 5.2 percent. However, some neighborhoods offer a more lucrative investment opportunity option than others. In the table below, you will find the average rental yields for the Metropolitan Area and Lisbon neighborhoods in 2023.

Lisbon Metropolitan Area	Rental Yields (%)
Metropolitan Area Lisbon	6.7
Lisbon City	5.2
Cascais	5.6
Loures	5.9
Mafra	5.8
Oeiras	5.6
Sintra	6.3
Vila Franca de Xira	6.7
Amadora	6.3
Odivelas	6.0
Almada	6.2
Barreiro	7.8
Montijo	6.5
Seixal	6.6
Setúbal	7.7

Houses for Sale in Lisbon: A Closer Look at Types of Properties for Sale in Lisbon

When searching for the perfect place to call home in Lisbon, the variety of properties available ensures that every dream can become a reality. Whether you’re looking to relocate to a vibrant district bustling with bars and entertainment or prefer a serene retreat in Cascais, there’s something for everyone interested in buying property in Lisbon.

Many properties boast convenient parking and easy access to shopping, making daily life a breeze. The personal touch of each property, from modern condos with state-of-the-art amenities to charming traditional homes, reflects the diverse charm of Lisbon’s real estate market. As you embark on your search, you’ll find that Lisbon apartments, houses, and villas offer not just a home but a lifestyle perfectly tailored to your desires.

Luxury apartments and penthouses

Luxury Lisbon apartments and penthouses are premier property options, offering a cosmopolitan escape within the city’s vibrant cultural scene. These upscale residences cater to individuals seeking refined living, with a diverse real estate market that enables buyers to find their perfect urban retreat.

These properties epitomize elegance and grandeur, with panoramic views of the Atlantic Ocean or the sprawling cityscape. From chic ground-floor apartments equipped with modern amenities to exclusive penthouses with unparalleled vistas, Lisbon’s luxury real estate market offers a lifestyle of sophistication and refinement that rivals any global metropolis.

Portuguese villas

In Lisbon, Portugal, Portuguese villas are a prime example of the luxury properties available for sale, blending sophistication with comfort. These contemporary homes provide a perfect retreat, ideal for unwinding in the city’s captivating atmosphere. With features such as modern finishes, air conditioning, private pools, exclusive gyms, and enhanced security measures, these villas epitomize opulent living.

From vibrant urban centers to serene coastal vistas, these properties, located in various areas, showcase unique modern designs and exquisite craftsmanship. Investing in a Portuguese villa in Lisbon offers a lucrative opportunity to create a bespoke sanctuary tailored to individual tastes, ensuring a lifestyle of unparalleled luxury.

Beachfront properties

In Lisbon, Portugal, beachfront properties epitomize the quintessential coastal lifestyle, offering an unparalleled blend of luxury and natural beauty. With a coastline stretching over 1974 km, Portugal boasts some of the most exquisite beach houses in the world, each promising a serene sanctuary by the sea.

Imagine waking up to the tranquil rhythms of the shimmering Tagus River or the endless expanse of the Atlantic Ocean as your daily backdrop. These waterfront homes offer incredible views, ensuring a sense of tranquility and serenity that transcends ordinary living. The allure of waterfront living extends beyond aesthetics, with properties enjoying increased resale value due to their coveted location.

The Best Neighborhoods to Buy Property for Sale in Lisbon

Lisbon’s real estate market is thriving, thanks to a combination of economic resurgence and a flourishing tech sector. Since the relocation of the Web Summit in 2016, the city has become a hotspot for innovation, drawing in remote workers and young professionals. This influx of international residents has transformed Lisbon into one of Europe’s most desirable places to live.

The growing tourism industry, with Lisbon and Porto as top destinations, has also played a pivotal role. Despite rising property prices, astute buyers can still find affordable options in up-and-coming neighborhoods or areas beyond the city center. Here, we explore the best neighborhoods in Lisbon for buying an apartment or house.

Central Lisbon

Central Lisbon boasts some of the most desirable neighborhoods for property investors, each with its own unique charm and investment potential. Baixa, Chiado, Bairro Alto, Avenidas Novas, and Príncipe Real stand out as prime locations.

Baixa and Chiado, with their cobblestone streets and neoclassical facades, offer a blend of historic allure and vibrant city life. Baixa’s bustling Rua Augusta and the grand Praça do Comércio are focal points for locals and tourists alike, making it a hotspot for investment properties. Chiado, on the other hand, provides a more relaxed, artistic atmosphere with its eclectic cafes, boutiques, and a rich cultural scene, making it a haven for creatives and shoppers.

Bairro Alto, just a short walk from Baixa, is renowned for its dynamic nightlife and cultural diversity. While it might be bustling at night, it also offers quieter areas that are ideal for investment. The area’s steep streets lead to some of the best traditional Fado music venues and restaurants, blending old-world charm with contemporary vibrancy.

Avenidas Novas, starting at the luxurious Avenida da Liberdade, is another top choice for property investment. This neighborhood is characterized by its spacious, leafy streets and beautiful properties. As Lisbon’s business center, it attracts working professionals, offering numerous cafes, rooftop bars, and cultural highlights like the Gulbenkian Foundation. The combination of modern living and historical charm makes Avenidas Novas a sought-after area for real estate.

Lastly, Príncipe Real, located within the Santo António parish, exudes cosmopolitan elegance. Its sophisticated architecture and trendy boutiques attract luxury buyers. The neighborhood’s proximity to the city center, coupled with its chic retail outlets and top-quality restaurants, makes it a prime location for real estate investment, offering both financial returns and an upscale urban lifestyle.

Each of these neighborhoods in central Lisbon presents unique opportunities for property investors. They blend historical beauty, vibrant culture, and modern amenities, ensuring a promising investment in the heart of the city.

Belém and Restelo

Belém and Restelo, located at the westernmost edge of Lisbon’s municipality, are prime neighborhoods for prospective property buyers seeking a blend of historic charm and modern convenience. These areas are renowned for their cultural richness, housing some of Lisbon’s most esteemed museums and art galleries, including the UNESCO-listed Jerónimos Monastery and the Torre de Belém.

The neighborhoods also boast an abundance of green spaces, making them ideal for families who appreciate outdoor activities and tranquility. With an array of amenities, such as grocery stores and schools nearby, residents enjoy a comfortable and convenient lifestyle.

Additionally, the picturesque views of the Tagus River and the iconic Ponte 25 de Abril bridge add to the appeal of living in these scenic areas. For those desiring a quieter environment without sacrificing access to urban conveniences, Belém and Restelo offer an exceptional residential choice.

Alfama and Graça

Alfama and Graça are two of the best neighborhoods in which to buy property in central Lisbon. They offer distinct yet equally appealing opportunities for real estate investment. Alfama, known for its labyrinthine streets and soulful Fado music, attracts buyers with its authentic charm and slightly higher property values.

Its unique atmosphere and historical significance make it a coveted area for those seeking a genuine Lisbon experience. On the other hand, Graça, perched on a hilltop, provides more affordable real estate options while offering stunning panoramic views of the city.

The vibrant culture and lifestyle in both neighborhoods have made them top tourist destinations, driving increased interest from property buyers worldwide. As a result, the housing market in Alfama and Graça continues to expand, presenting lucrative opportunities for those looking to invest in Lisbon’s flourishing real estate sector.

Parque das Nações

Parque das Nações, a vibrant waterfront neighborhood in Central Lisbon, stands out as a prime location for property investment. This modern district is a harmonious blend of sleek, contemporary architecture and lush green spaces, making it a desirable destination for both residents and investors.

Its strategic location provides excellent connectivity, with major transport routes and Lisbon’s international airport nearby, ensuring ease of travel. The area boasts sunlit apartments and houses that offer stunning views of the Tagus River and the iconic Vasco da Gama Bridge. Additionally, the abundance of amenities, including shopping centers, restaurants, and recreational facilities, enhances the neighborhood’s appeal.

For international investors seeking a lucrative opportunity, Parque das Nações promises a high-quality lifestyle and robust investment potential. With its dynamic environment and strategic advantages, this district is no wonder it is a top choice for those looking to invest in Lisbon’s thriving real estate market.

The Greater Lisbon Area

The Greater Lisbon Area stands out as one of the best regions to invest in property within Central Lisbon, offering a unique blend of historical charm, modern amenities, and vibrant communities. Ajuda, a historical gem near Belém, is renowned for its attractions, such as the Ajuda National Palace and the Botanical Garden. This neighborhood seamlessly combines residential appeal with tourist interest, making it an ideal spot for short-term rentals or boutique businesses that leverage its cultural heritage.

Beyond Lisbon, areas like Cascais, Sintra, and Oeiras present unique investment opportunities. Belém, with its rich history and a steady stream of tourists, is perfect for hospitality ventures. Sintra, a UNESCO World Heritage site, offers a promising market for property investments due to its historical significance and scenic beauty.

Along the Lisbon Coast and just a 30-minute drive from the city center, Cascais is known for its luxurious real estate options and vibrant international community, making it a sought-after destination for high-end property buyers. Oeiras, on the other hand, boasts strong connections to the tech industry and offers a desirable residential environment close to the capital.

These neighborhoods within the Greater Lisbon Metropolitan Area provide a compelling mix of value and space, catering to families and individuals seeking a balance of tranquility and vibrancy. With historical landmarks, green spaces, and proximity to both Lisbon and picturesque beaches, investing in areas like Belém, Ajuda, or Restelo offers a gateway to diverse opportunities and enriching lifestyles.

How to Buy a House in Lisbon

There are many good reasons to invest in houses for sale in Lisbon, Portugal. A few of the key advantages include no restrictions on foreign property investment investing in a dynamic market with a high return on investment potential, the low cost of living compared to other cities in Western Europe, and enjoying a high-quality lifestyle surrounded by Portugal’s sublime climate and friendly locals. In the sections below, we will explore how to invest in property for sale in Lisbon.

Create a budget

Creating a budget is a crucial step in buying property in Lisbon. Beyond property prices, consider additional costs like application fees and property taxes. Financing requires careful planning: Portuguese residents typically need 10 to 20 percent for a mortgage deposit, whereas non-residents usually need about 30 percent of the property’s value as a deposit.

Financing your property

When buying property in Lisbon, you can opt for a full upfront payment if you have the capital. Alternatively, explore a range of mortgage options from providers like BBVA, Santander, Banco Best, Bankinter, and Banco CTT to find a plan that suits your financial needs.

Types of mortgages

In Lisbon, you have access to a variety of mortgage options from over 15 banks, all regulated by the Bank of Portugal. The two main types are fixed-rate and variable-rate mortgages.

Fixed-rate mortgages offer stable payments throughout the loan term or for a specified period before switching to a variable rate. Early repayment incurs a 2 percent fee. Variable-rate mortgages, influenced by an index like Euribor, lead to fluctuating payments, typically adjusted every six or twelve months.

An early repayment fee of 0.5 percent applies. Choosing the right mortgage type depends on your financial stability and risk tolerance.

The steps to buying property in Lisbon

Step 1: Find the perfect property

Set a budget and research the Portuguese real estate market, focusing on location, amenities, and rental potential. Seek guidance from real estate professionals, such as buyer’s agents or real estate agents.

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: Make an offer

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 4: Reservation Agreement and CPCV

After an offer is accepted, a Reservation Agreement may require a refundable fee. The Promissory Contract (CPCV) formalizes the promise of acquiring real estate between parties at a future date under pre-defined conditions and includes a deposit to secure the transaction. We recommend that the CPCV be signed in front of a Notary.

Step 5: 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.

Legal considerations for foreign buyers

When buying property in Lisbon, ensuring legal compliance is crucial for a smooth process. Prepare essential documents such as a valid photo ID, the Contrato Promessa de Compra e Venda (CPCV), which details the purchase terms, and an Energy Certificate that assesses the property’s efficiency. You’ll also need to handle Imposto de Selo, the stamp duty tax, and obtain the Caderneta Predial, which provides property details. Engaging a real estate lawyer is highly recommended to help organize these documents and conduct due diligence on your behalf, ensuring that all legal requirements are met and protecting your interests throughout the transaction.

Taxes during the purchase process

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 Lisbon 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. In comparison, 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.

Considering your budget early aids property selection and facilitates the mortgage process, which can be time-consuming. Working with a real estate professional ensures comprehensive understanding and compliance with financial and tax considerations, optimizing investment decisions in the Lisbon property market.

Stamp Duty

The Imposto do Selo, or Stamp Duty, is an additional transaction cost property buyers are charged on deeds, contracts, bank mortgages and loans, paperwork, and property titles as the buyer. The Stamp Duty rate for purchasing a property in Portugal is 0.8 percent of the value of the business or the value of the property. It is levied on whichever value is higher. If the property is donated, the Stamp Duty for the transaction will be 10 percent.

Notary fees

You will also need to budget for Notary fees. 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.

Taxes after the purchase

Immovable Property Tax (IMI)

After you have successfully purchased residential real estate in Lisbon, 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. Generally, 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 to IMI (AIMI)

Real estate owners who have purchased property in Portugal valued at more than €600 000 will be subject to Portuguese wealth tax (AIMI). AIMI tax can be calculated as follows:

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

Additional costs involved in purchasing houses for sale in Lisbon

When it comes to the financial aspects of buying property in Lisbon, there are also additional property purchase fees that you should be aware of. Additional money matters you should include in your budget include:

Legal fees: A lawyer will cost you approximately €2000-€5000, depending on the type of property, the price, and the complexities of the purchase
Land Registry Fee: There is a public fee for the Land Registry, amounting to €250
Notary Fees: Notary fees will cost you between €500 and €1,000
Mortgage: Factor in costs for a mortgage broker, including the application fee of €290 and the bank valuation fee of €280

Tips for Investing in Lisbon Real Estate

When investing in houses for sale in Lisbon, Portugal, it’s crucial to navigate the local market with informed strategies. Here are vital tips to guide your investment:

Research Extensively: Dive deep into the Lisbon real estate market by studying rental demand, neighborhood dynamics, and potential income streams. Comprehensive research helps identify promising investment opportunities.

Choose the Right Location: Focus on neighborhoods with desirable amenities, convenient transportation, and attractions that can appeal to potential tenants. The right location can significantly enhance your property’s rental attractiveness.

Assess Profitability: Calculate the financial viability by comparing property prices with ongoing costs such as taxes, maintenance, and mortgage payments. Ensure that the projected rental income justifies the investment.

Understand Local Laws: Familiarize yourself with Lisbon’s rental regulations and legal guidelines. Being well-versed in local laws will help you comply with legal requirements and avoid complications.

Work with Experts: Partner with a local real estate agent or buyer’s representative who has extensive knowledge of Lisbon’s market. Their expertise can provide valuable insights and ease the purchasing process.

Anticipate Challenges: Prepare for potential issues like property maintenance, tenant turnover, and legal obligations. Adopting a long-term view will help you manage these challenges and sustain rental viability over time.

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 to find the property investment perfectly tailored to your lifestyle.

Contact BE Global Properties today and start your journey to discover the property of your dreams.

Frequently Asked Questions About Lisbon, Portugal, Real Estate

What are the best neighborhoods for buying houses in Lisbon?

When buying a house in Lisbon, consider neighborhoods like Baixa, Chiado, and Príncipe Real for their vibrant city life and historic charm. Avenidas Novas offers modern living and professional appeal, while Alfama and Graça provide authentic local experiences. For scenic beauty and tranquility, Belém and Restelo are excellent choices.

How to find affordable homes for sale in Lisbon?

To find affordable homes in Lisbon, explore emerging neighborhoods and consult local real estate agents for insights on budget-friendly options. Research rental demand and neighborhood dynamics to uncover promising investment opportunities. This approach, combined with thorough market analysis, helps in identifying cost-effective real estate prospects.

What is the process for buying a house in Lisbon?

To buy a house in Lisbon:

Start by researching the market and setting a budget, then secure financing through Portuguese banks.
Once you’ve found a property, make an offer and negotiate, potentially with a real estate professional.
After the offer is accepted, sign a Reservation Agreement and CPCV.
Sign the Escritura to complete the purchase and transfer ownership.

What are the benefits of investing in Lisbon real estate?

Investing in houses for sale in Lisbon, Portugal, offers several benefits: there are no restrictions on foreign property investments, and the market has high return potential. Additionally, Lisbon boasts a lower cost of living compared to other Western European cities, a pleasant climate with warm summers and mild winters, and excellent education and healthcare services.

How to find luxury homes for sale in Lisbon?

To find luxury homes in Lisbon:

Start by researching available properties such as modern Lisbon apartments, villas, and mansions.
Look for homes with desirable amenities like private gardens and swimming pools.
Analyze rental demand and neighborhood dynamics and conduct thorough market research to identify promising and cost-effective investment opportunities.

It is also a good idea to work with experienced luxury property experts like BE Global.

What are the most popular areas for expats to buy property in Lisbon?

Popular areas for expats to buy property in Lisbon include Alcântara and Anjos, favored by digital nomads and young professionals for their modern appeal. Alfama and Graça provide authentic Portuguese charm, while Estrela and Lapa are ideal for families seeking a more traditional and family-friendly environment.

What is the average price per square meter for homes in Lisbon?

In 2023, the average price per square meter for homes in Lisbon was €6,009, while in the Metropolitan Area it was €4,061. Property prices in Portugal vary based on the neighborhood and the type of real estate, whether residential or commercial.

How to finance a house purchase in Lisbon?

To finance a house purchase in Lisbon, start by creating a budget that includes additional costs like application fees and property taxes. Portuguese residents need a 10-20 percent deposit, while non-residents need about 30 percent. Explore mortgage options from banks like BBVA and Santander, considering fixed-rate or variable-rate plans based on your financial needs and risk tolerance.

What are the legal requirements for buying a house in Lisbon?

To buy a house in Lisbon, you need a Portuguese tax identification number (NIF), a Portuguese bank account, photo identification (such as a passport), proof of address, a contract of sale, an Energy Performance Certificate, a Stamp Duty, and a Land Registry document.

How to find a reliable real estate agent in Lisbon?

To find a reliable real estate agent in Lisbon, research online reviews, seek recommendations from locals or expatriates, and verify credentials. Choose agents familiar with the Lisbon market and experienced with expats. Since agents typically work for sellers, consider hiring a buyer’s agent to protect your interests.

How to negotiate property prices in Lisbon?

Negotiating property prices in Lisbon, researching market values, understanding the seller’s motivation, and preparing a fair offer are all important. Hiring a skilled real estate or buyer’s agent can enhance your negotiation strategy.