Property Purchase Guide

Buying a property in Portugal or in its Islands is definitely an exciting and life changing decision. Portugal is a sought-after destination to move to due to its incomparable climate, outdoor activities and proximity to incredible places. There can be some differences from buying a property in other countries, but once you understand the process it is very simple. At DRP Advisers we stand by your side from the very beginning to guide and advise you the best we can whilst always looking out for your best interests.

Choosing Partners in Portugal

Choosing the right partner to guide you through a real estate transaction is as important as buying a home.

DRP is the leading pioneer in Portuguese real estate consultancy and Golden Visa Program. Since 2015 our company has grown and have become a one-stop shop solution for this program offering bespoke services, expert knowledge, and custom-tailored services towards client needs. Our company works directly with you to provide expert advice on the investment and acquisition of property within Portugal – suitable for your investment requirements.

We use our extensive connections within the industry to access suitable investment opportunities ahead of the competition. The Portuguese property market can be highly competitive, so early access is crucial. We find prime properties that are hand-picked from our leading partners, we offer expert advice on the locations most appropriate for your investment requirements, guiding you on how rental yields and capital values vary from area to area.

With a cosmopolitan team, our secure network of lawyers, property advisors and consultants are here to guide you every step of the way through your investment journey.

Finding your dream home or real estate investment

Using the guidelines you set forth, we will present you with the best available options. In addition to price and property attributes, pay close attention to data like property taxes, and monthly assessments.

Tax considerations when buying property in Portugal

IMT Tax 0-8%

IMT, the municipal tax on the real estate transaction (Imposto Municipal sober asTransmissões Onerosas de Imóveis). This tax is collected each time a purchase of a house is made in Portugal. It is applied to the tax value of the property or the value declared in the deed of sale.

How to calculate the IMT tax in Portugal?
IMT = Value of the deed or net worth tax (the higher of the two) x Rate to apply – tax abatement

This tax must be paid before purchase of housing and its calculation takes into account three specific characteristics:

  • Type of property: rural or urban;
  • Location of the house: mainland Portugal or autonomous regions;
  • Purpose of purchase: Residence principal or secondary

Stamp Duty Tax

First of all, there is the payment of the stamp duty on the purchase and sale of any property in Portugal. It is necessary that the buyer of the house pays this tax to the notary at the time of signing the deed of sale. In this case, the tax on stamps is 0.8%.


As an owner of property in Portugal you will have to pay property tax (Immovable Property Tax, IMI).Each individual municipal has its own rate, and is decided by the municipal assembly. The person/Corporation that owns the property on the last day of the respective tax year is liable to pay the IMI Tax.

Any non-EU/EEA/Swiss national can apply for the Portugal Golden Visa;

Property in rural areas are be taxed at 0.8%, whereas property in more urban areas will fall in the stated range.

Property owned through a corporation domiciled in black-listed jurisdictions (Tax havens - E.G British Virgin Islands, Isle of Man, Gibraltar) will pay a straight 7.5% Tax of the ratable value.

Property that has been re-valued since 2004 will fall between 0.2 and 0.5%, and property valued before 2004 will be between 0.4 to 0.8%.

Exemption applies for a three-year period, in case of urban properties with a Tax

Some property cases will be exempt from the property tax (IMI). Property which is to be used as a permanent home or to be rented out will be exempt from property tax (IMI) for a period of 3 years and will depend upon the patrimonial value of the property.

Registration Value up to € 125,000, held by individuals which obtained a taxable income in the year prior to the acquisition, of up to € 153,300.

In addition to the taxes due upon buying a Portuguese property, buyers may be subject to income tax on rental income or capital gains tax when the property is sold.

For non-residents, rental income is taxed at a flat rate of 28%. Property owners can deduct the annual costs of maintenance, repairs, insurance, and municipal taxes as business expenses before calculating the total tax due. However, neither mortgage interest nor mortgage insurance is deductible.

Legal Due Diligence of the Property

DRP Advisers Legal team will conduct a full due diligence and provide you a legal memo on the property you chose,  ensuring that there are no legal encumbrances on the property.

Reservation & property purchase

Chances are, when you find a home you absolutely love or great investment, someone else may want it too. So it’s important to act quickly and make an educated offer and ideally make a reservation. Usually, the sellers require a small payment to reserve a property and take it out of the market for a brief period (approximately 30 days).

Within the next 30 days, it shall be:

  • Granted a deed of purchase and sale (which transfers property ownership to the buyer );
  • In case the granting of the public deed is not possible/convenient within the 30 days, parties usually enter a promissory contract of purchase (which legally block the property to the buyer until the deed is granted).

After you buy

While your transaction is complete, our work is not. In fact, DRP Advisers maintains relationships with our clients long after closing. We are always glad to help you find a variety of service providers to perform work on your home or make life a little easier in a foreign country.


As your best friend in Portugal, it is our responsibility to arm you with the very best information, resources and advice you need to successfully complete your transaction. So when it comes to financing your home purchase, DRP Advisers is here to answer your questions and point you in the direction of a reliable mortgage professional.

In general, banks apply a limit of 90% of the purchase price or the value of the property for resident clients in Portugal. In the case of non-residents, the financing percentage is usually reduced to 70% or 80%.