For years, buying a house in Spain has been more popular than buying one in Portugal. Yet in recent years interest in Portugal has been rising significantly and not entirely unjustifiably. In Portugal, you can generally still find a wonderful home for less money. The Portuguese government is also trying to make things interesting from a fiscal point of view.

Buying a house in Portugal with interesting tax advantages

After the 2008 crisis, Portugal seems to have climbed out of the doldrums in 2017: unemployment is falling and economic growth is underway. This is reflected in real estate prices. These are rising because demand exceeds supply, which in turn is due to the many tax advantages. For example, the NHR regime is in place, which attracts foreign investors. Specifically, people residing in Portugal for at least 183 days a year are not taxed on their pension income and on foreign dividends or interest. Many investors are also attracted by the Golden Visa scheme, under which non-EU citizens receive a Portuguese residence permit when purchasing a property of at least 500,000€.

Additional costs

If you are buying a second home in Portugal, be sure to use a local lawyer. He represents the interests of the buyer instead of the notary or real estate agent. You pay a fee that is 1% of the purchase price, plus 23% VAT. Keep in mind the transfer tax, which varies between 0 and 8%. You also pay a stamp duty, notary and registration fees and may or may not pay a commission to the broker. In this way, the total cost of buying a second home in Portugal is 4 to 7% of the purchase price.

Taxes

As a property owner in Portugal, you pay annual taxes, such as municipal property tax. If you rent out the property, you owe a 10% stamp duty on the rental price.