Buying Property in Portugal – How We Found Our Dream Farm (and How Much It Cost!)

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Buying property in Portugal may seem like a daunting task, especially if you don’t speak the language, but it doesn’t have to be.

Once you get to grips with how the Portuguese property market works, and what to look out for, I’m confident you will find the property of YOUR dreams too.

In the summer of 2020 we started looking to buy a renovation property in Portugal. We were armed only with limited knowledge we’d gained from doing some online research. 

We visited many properties, learnt a lot about the Portuguese buying process and eventually found the perfect farm for our new eco-friendly life.

Here I want to share with you everything we did, and everything we learned, in the hope that it may make your search a little easier and perhaps even a little faster.

While this article will focus on buying in central Portugal, I’m sure you can apply at least some of this information to other locations or even other countries.

What We Learnt When Buying Property in Portugal

Before we even arrived in Portugal we did a lot of online searching, as well as research about costs, the property buying process and Portugal building regulations. This definitely helped when we eventually made it to Portugal and could start viewing properties for real.

As we viewed property after property (as many weren’t suitable at all) we learned even more which helped us narrow our search and get more specific about exactly what we wanted.

Here’s the top lessons we learnt that might help you:

#1 Get Clear On Your Criteria

When we started our property search we pretty much considered everything, as long as it wasn’t a complete ruin. We were sure we didn’t want to have to do too much structural work or rebuild a roof ourselves.

As our search progressed, we discovered a lot of completely unsuitable properties. We realised how important it was for us to establish a list of more specific criteria.

And then, after viewing a few more properties that we thought DID fit the criteria, we realised we needed to prioritise that list into must-haves and nice-to-haves.

There is a LOT of property for sale in Portugal, if you’re not clear on what you want you could waste a lot of time driving from place to place, walking around unsuitable buildings and trudging through acres of overgrown land. 

Spend a bit of time upfront and you’ll make your life a lot easier.  And if you’re a couple, create your own lists and then compare – we were surprised to find that we had each criteria that we considered important that the other person wasn’t aware of. 

#2 Set a Budget Range

This one is fairly obvious, but you really need to know exactly how much money you have to spend. Instead of picking a specific figure, come up with a minimum and maximum range of what you’d ideally like to spend.

You’ll need to consider funds that you already have as well as additional finance you might get from the bank (and be sure you can qualify for this finance).

If you’re like us and looking for a renovation project, or willing to buy a property that needs a little work, you might want to have two separate budgets.

This is particularly important if you’re using finance to buy the property but will require cash for the renovation works.  And if you don’t have the entire renovation budget upfront, ask yourself if you’re willing to live in the property as is until the funds become available.

A renovation budget can be quite elastic, especially if you take on some/all the works yourself (like we’re doing). Really think about how the work will be done and what skills you have available.

Be careful not to get caught up in the romance of the project either. Doing renovation work yourself can be challenging, exhausting and frustrating at times – and the work definitely always takes longer than you expect.

#3 Prepare to be Patient – Particularly in Portugal!

Depending on where you’ve lived previously, you might find that the pace of life is a little slower than you’re used to – or in our case, a LOT slower. Moving from London to rural Portugal was a massive adjustment for us. 

Getting responses to emails, and even phone calls, takes time in Portugal and really is a lesson in patience. Try not to get frustrated – take your time and try to enjoy the property searching process.

#4 Not Everyone Loves Email

Email does work, but a phone call is often better (or faster).  While we were in research mode, before we left the UK, we heard that no-one responds to emails in Portugal. But that’s just not true. 

I had a lot of success emailing agents and getting responses, and using the online contact forms. Yes, there were a couple of agents that never replied but on the whole most did.

Once in Portugal I did use the phone occasionally, but not speaking very much Portuguese often blocked me. However, most agents speak English or will happily pass you over to someone else who does.

We were really surprised by just how much English is spoken – even in the central region.

#5 Learn the Legals

Perhaps unsurprisingly, the legal aspects of buying property in Portugal are very different to other countries. 

Make sure you’re well informed about the buying process, different types of land designation and what can and can’t be done when it comes to building and renovating property (keep reading for more on these topics).

There is a LOT of misinformation about land and property – especially in Facebook groups! 

I spent a lot of time researching, and searching in Portuguese (thanks DeepL translate!) to find official sources of information. While I learnt a lot, I still don’t think I 100% understand everything. 

I’ve detailed below what I have learnt, but I would suggest that you do your own research and verify anything that you read or hear. And that even goes for what I’ve written below as it may not be completely accurate – or may have changed since publishing this piece.

I would also 100% recommend that you speak to a lawyer about the property buying process when it comes to a specific property as every property is different.

You should also try to become friendly with the staff at the local Câmara Municipal (town hall) in the region where the property is located. This is THE place to go to ask about the specifics of what can/can’t be done to the land/property.

There’s so much variation across municipalities so bear in mind that anything you hear will be based on a specific set of circumstances and may not apply across the board.

With these 5 lessons in hand let’s take a look at how you can go about finding Portuguese property online and some of the best websites to use.

Buying Property in Portugal - so many ruins!

Searching for Portuguese Property Online

We did almost all our property searching from London before we were able to travel to Portugal. When we got to Portugal we continued with mostly online searching, rather than using the phone (as our Portuguese isn’t good enough for a phone conversation).

We had been told that online property searching didn’t work, that we needed to go in person to estate agents offices, and that no-one would respond to email.  In general we didn’t find this to be true.

Yes, online property searching is very time consuming (because there is so much property) and it can be difficult to filter by your needs (eg. size of land), but with a little perseverance and patience it does pay off.  

I emailed a lot of agents, asked a lot of questions, and even made appointments in advance of when we arrived.  Sometimes I didn’t get a response, sometimes the answers were a bit vague (ok, a lot vague!), and sometimes it took over a week to get a reply. But, ultimately, online research and email did work.

There are plenty of websites that you can use, but often the photos and written details aren’t particularly informative. You do need to have a lot of patience (and maybe a stiff drink).

Here are some of our favourites online property portals:

Listing Sites

Pure Portugal – specializing in off-grid, small holdings and more rural property. Great for searching by land size. Listings by private sellers as well as estate agents.

Idealista – listings by private sellers as well as estate agents

OLX – listings by private sellers and estate agents (this site is like eBay/Gumtree for Portugal)

Green Acres – listings by private sellers as well as estate agents

Casa Sapo – listing by by private sellers and estate agents 

Rightmove – listings by estate agents targeting British expats

Kyero – listings by estate agents only (also covers Spain, France and Italy)

Imovirtual – listings by estate agents only

Specific To Central Portugal

If you’re looking in Central Portugal here’s a couple of estate agents that are worth a look, though they sometimes list their properties on at least one of the above websites.

P P Property – nice team of English speaking agents, I really liked these guys and the way they did viewings. In addition to Central Portugal, they also cover the Silver Coast.

Casa Sertã – focusing on property around Sertã as well as the wider Central Portugal region.

Chave Tejo – English speaking agents who were very transparent about properties and any legal/licensing issues.

Esfera Real – based in Pedrogão Grande with at least one English speaking agent.

Other Countrywide Estate Agents

ERA 

RE/MAX 

Century 21

There are also a number of Facebook groups, and Facebook marketplace where properties are regularly advertised.  Use the search function with keywords such as Portugal, Algave, Silver Coast etc and you’ll find a whole host of listings – some probably more suitable than others!

Tips for Online Property Searching

  1. Be patient, be very patient. “Portugal time” may be a little slower than you’re used to. Try to embrace it.
  2. If you can’t communicate in Portuguese use DeepL to translate for you (it is European Portuguese while Google Translate tends to be Brazilian Portuguese)
  3. Be persistent. If it’s been a while since you sent an email, send another one.
  4. If you’re struggling to get a response from an agent, check to see if the same property is on another site with another agent. If so, email them instead. You might also find the same property listed at different prices!
  5. Create a template email, and have your questions numbered – this makes it easier for the agent to answer them (and you can refer back to a question by number if they miss an answer)
  6. Keep a record of who you’ve emailed, on what date, and about what property.  Also keep a record of responses, questions asked/answered and anything else important to you. Also keep a record of what properties you’ve discarded so you don’t waste time following up on those further. We used a free app called Notion.so to track all the properties we found as well as other aspects of our move.

Finding a property online is just the first step. Next you need to go visit the property and I’d highly recommend pre-planning what questions you have and noting down anything specific you might want to look at while at the property.

Conducting Property Viewings in Portugal

To get the most out of property viewings, we quickly learnt to ask a lot of questions in advance as well as preparing a questions checklist if we ended up visiting a property.

Here’s some of the questions you might want to ask both before and after a viewing:

Questions to ask BEFORE viewing a property

  • Does the property have water, electricity, sewage/septic, phone/internet connection?
  • Is there a habitation license or exemption certificate for those built before 1951? (see below for more details on this)
  • Is there an urban plot?
  • Are all out buildings registered?
  • How close is the property to the road?
  • Is there tarmac/hard-standing access? (unless you have a 4×4)
  • How close is the nearest town/supermarket/pharmacy/doctor?
  • Any of your specific criteria, eg. size, number of rooms, pool, etc

Questions to ask DURING a property viewing

  • Where is the water source?
  • Where is the septic tank/fossa?
  • Where are the boundaries?
  • What internet connections are available – Fibre, ADSL?
  • Who is selling the property, and why?
  • How large is the urban plot?  (make sure it has one!)
  • How long has it been on the market, and have there been any price drops or offers?
  • Can I see the paperwork: topological survey, cardeneta, land registry, habitation license or pre-1951 exemption?

Things to look for when viewing a Portuguese property

  • Are there any forests / eucalyptus trees close by?
  • How close are the neighbours?
  • Does the property have a wall or fence (to keep out wildlife)?
  • How does the land slope – how will water run on the land?
  • Check for mobile/4G reception

Red Flags to look out for

  • Illegal extensions/construction
  • Hesitant to answer questions about land, owners etc
  • Vague about property paperwork, or unwilling to provide it for you
  • No water, electricity etc … may indicate the property has never been a house, which may make connection to mains services problematic and/or expensive

This isn’t an exhaustive list, there will be questions that are specific to your criteria.  Make your own list and go prepared every time you contact an owner/agent or visit a property.

Buying Property in Portugal - understand land designation

Understanding Land Designation in Portugal

Portugal has several different types of land, and it is this land designation that often dictates what the land can be used for, and whether it can be used to build on.

The general designations of land are as follows:

  • Urban (urbana) – in an urban setting, or designated for building a house.  Often on larger more rural land plots the urban plot will be just for the footprint of the house.
  • Rustic (rustica) – this is typically in a rural setting designated for agricultural purposes. More often than not you cannot build a house on this land without also changing the land designation (which is possible, but often fraught with complexity).
  • REN (Reserva Ecológica Nacional) and RAN (Reserva Agrícola Nacional) – sub categories of agricultural land that is designated for wildlife protection, national listed sites  and pure agricultural purposes. There are strict guidelines for what you can and can’t do on this type of land and you need to consult with both the local Câmara as well as the REN or RAN national bodies.

There are a set of national guidelines which indicate what can and can’t be done with regard to land and property (renovation, extensions and new buildings). However the interpretation, and enforcement of these guidelines, differs across municipalities. 

It is always advised to pop into your local Câmara and discuss your individual circumstances.  We found the staff at our local Câmara to be wonderfully friendly and helpful.

Our farm has two separate land designations, or articles as they are referred to:

  • an urban article for the house, and it is for the exact footprint of the house, no more
  • a rustic article for the land

There are two separate legal pieces of papers for each of the two articles:

  • Certidão Permanente from the Land Registry – the official title/deed that is evidence of ownership 
  • Caderneta Predial Urbana (/ Rustica) – tax registration document

When property searching it is normal to ask to see these papers for any property that you’re viewing. 

If an agent hesitates then it’s likely that they are trying to avoid disclosing some of the details on the paperwork. If you’re at all suspicious insist on the paperwork, or walk away.

Habitation Licenses and Houses Built Previous to 1951

If you are buying a property that has a house (even if it’s a ruin), as opposed to just land, you need to be sure that the house has a habitation license or an exemption from needing one.

Portugal introduced building regulations on the 7th of August 1951. All houses that were built after this date require a Habitation License which confirms that the local Câmara have inspected the property and it complies with planning law and building regulations.

It also acts as confirmation that the house is indeed registered and habitable as opposed to a barn that is being passed off as a house (which seems common from our experience!).

Houses that were built before this date in 1951 are exempt from requiring a habitation license. In this case you require either an exemption certificate, issued by the local cãmara, or evidence on the Caderneta Predial Urbana that the house was constructed before 1951 (there’s a field called ‘Ano de inscrição na matriz’ that shows the date that the house was registered at the Land Registry).

During our property search we saw both types of paperwork for exempt, pre-51 property. We viewed a farm house that was registered with the Land Registry in 1994 but had a certificate from the local Câmara declaring it exempt from a habitation license.

The house we ended up buying was registered with the Land Registry in 1944 and as such the Caderneta Predial Urbana was sufficient evidence and didn’t require an exemption certificate.  We still have no knowledge of how old the house actually is.

The Property Buying Process in Portugal

I’ve only ever bought property in the UK, but we found the overall process very similar and I imagine it’s the same in many other countries in the world.

Here’s a quick overview of the steps involved in buying property in Portugal:

  1. View lots of property and decide upon one you’d like to buy.
  2. Make an offer and negotiate with the seller until you both agree on a price.
  3. Find a lawyer, get a NIF (tax number) and arrange finance (if required).
  4. Arrange conveyancing checks by your lawyer and an independent property survey.
  5. Put down a deposit and sign a promissory contract (this is optional).
  6. Pay the property transfer tax and agree upon a purchase date.
  7. Sign the final deed and pay the balancing purchase price.
  8. Register the deed at the Land Registry.

If you’re from the UK, consider step 5 as exchange of contracts, and step 7 as completion.  

Not every property purchase is going to follow this exact series of steps – ours certainly didn’t. 

We bought our house separate from the land (due to a couple of technical inheritance issues).  

For the house, we went straight to signing the deed (skipping the promissory contract) and owned the house in just over a week from when we’d had our offer accepted. 

However, for the land purchase we’ve paid a deposit and signed a promissory contract. It will take a number of months while the inheritance issues are sorted out, which is why we purchased each article separately – so we could crack on with the house renovation while the land and outbuildings were dealt with separately.

Another difference when buying property in Portugal is that you make the deposit and balancing payment direct to the seller.  In the UK you’d typically send your money to your solicitor first. And I understand that in the US funds are normally held in escrow until everything is finalised.  

Also to our surprise, most of the transaction was done in person in Portugal.  We had to go to the office of our lawyer, along with the sellers, to sign all the documentation in person.  Our lawyer was also a registered notary so we were able to do all the paperwork in one place rather than a separate visit to have everything notarised. 

In the UK, most of this is done via email and post so you often never get to meet your solicitor, or the seller.

In our case, the sellers were two sisters and a husband. They sat on one side of a conference table, and my husband and I, the estate agent and our lawyer sat on the other side. It was quite a surreal experience because we were a little unfamiliar with the process and the majority of the meeting was conducted in Portuguese (with English used for anything that we needed to understand and do).

We used Revolut to transfer the funds from our UK account to the sellers’ Portuguese account as we all sat around discussing our plans for the farm. 

To say that the entire transaction was laid back is quite an understatement! Welcome to Portugal!

Costs of Buying Property in Portugal

Everyone wants a slice of the pie when you buy property, and it’s no different in Portugal.  Here’s the costs that you can expect to have to pay when buying property in Portugal.

Property Inspection/Survey

While it’s not mandatory to have a property survey done, it’s always good for a little piece of mind.  A survey will highlight any structural issues, concerns around damp and identify any work that might be needed.

We knew that the house we were buying needed a lot of work, but we wanted to be sure that the structure was sound. We also wanted to get an opinion on the condition of the roof so we’d know how quickly we’d need to replace it (or not). We paid €370 to a Aussie property surveyor called Tom Jennings for a 4 hour visit.

Thankfully for us, the news was good. The overall building and external walls were structurally sound and we’ve got at least a couple of years before the roof needs replacing.

The surveyor listed all the things we already knew – lots of damp, windows that needed replacing, woodworm damage to a lot of the timber etc. but he also showed us which floors were uneven and which ones were level.

Property Transfer Tax (IMT)

IMT is calculated on a sliding scale based on the value of the purchase price of the property. Different types of property also attract different rates of tax: new build, rustic land, residential property, etc.  

The tax starts at 0% if the property price is less than €92,407 all the way up to 7.5% if the property is priced over €1 million.  You can find the current rates here.

The purchase price of our house was €68,000 so we had no tax to pay.  We will however have to pay a small amount of tax when we complete the purchase of the land.

Stamp Duty

Stamp duty is paid at a fixed rate of 0.8% of the property purchase. 

Both IMT and stamp duty are typically paid to your lawyer and they make the payment on your behalf to the tax office. 

If you are using a mortgage to finance the property you’ll be charged an additional mortgage stamp duty, this is currently calculated as 0.6% of the value of the mortgage.  

Lawyer and Notary Fees

Lawyers are a bit like cars, there are fancy ones and others that get the job done. It’s hard to give a one size fits all estimate for the legal costs but 1.5% of the purchase price is a figure I see being quoted quite often and it seems about right.

Our lawyer was recommended to us (by two separate people) and had fees that we thought were very reasonable, certainly compared to UK prices for London transactions. She also spoke perfect English and was able to explain all the legal jargon to do with the inheritance complications. She communicates via WhatsApp and email which we also love (so both sides can communicate at their own leisure, rather than being interrupted by the phone ringing).

Notary fees are paid per deed, or notarised document.  Typically that means there’s a fee for the promissory contract, the deed and also the land registry document.

We have paid the following so far:

Deed for house €300

Land registry for house €250

Promissory for land €200

Legal fees €500

We’ll also have to pay some more fees in order to complete our land purchase, including a new topological survey of the land. This typically wouldn’t be the case if you bought a house with the land in one transaction.

Bank Fees

If you use a mortgage to fund the purchase of a property in Portugal you’ll have some additional fees to pay.  We didn’t do this but a mortgage broker should be able to give you an indication of the costs (in addition to the mortgage stamp duty mentioned above).

What You Need to Buy Property in Portugal

If you want to purchase a property, or land, in Portugal there’s a couple of formalities that you need to go through.  But you do not need to be Portuguese, or even resident in Portugal, to buy property in Portugal.

In order to complete a transaction you will need:

  1. Most importantly you’ll need some funds.  You can use either hard earned cash or finance from the bank in the form of a mortgage.
  2. Some form of identification. If you’re Portuguese then your Citizen’s Card will suffice else you’ll need to provide a valid passport.
  3. A Portuguese tax number, referred to as a NIF or TIN.  You can apply for a tax number at your local Finanças office where you’ll need to provide an address. Both residents and non-residents are eligible to apply for a tax number. You can find a list of finanças offices and their details (including email addresses) here.
  4. A Portuguese bank account, or means to transfer money instantly to Portugal. Bankers cheques don’t appear to be commonly used in Portugal, so you might need to do some research to get good transfer rates if doing an international transfer  (I can recommend both Transferwise and Revolut. We used Revolut and there are no international transfer fees if you sign up to their premium service).

I would also suggest that if you can’t speak Portuguese (just like we can’t) then try to find a couple of people who speak English to help you with translation.  

We managed to find several Estate Agents who spoke English which really helped when we wanted to ask questions of the seller.  Our lawyer also spoke brilliant English which really came in handy when explaining the more detailed parts of the property buying process.

Finding Your Dream Portuguese Property

Wondering how much we paid for our small Portuguese farm?  We agreed a price of €70,000 which was arbitrarily split to €68k for the house and €2k for the land (this helped to reduce taxes). 

Quite frankly, we think this is a bargain for a beautiful stone building and ¾ acre of land – you’d struggle to find a studio flat in London for that price!

We have bought a fixer upper and do have a lot of work to do, but we love property renovation work, and bringing a neglected period property to its former glory is something I really think is worthwhile.

With some time, patience and most importantly perseverance you’ll find your little slice of heaven in the sun too.

Good luck on your search and I hope you find what you’re looking for.

If you’re interested to see how we get on, follow our journey on YouTube.