How to Safely Invest in Real Estate in Portugal

how to safely invest in real estate in portugal

There are several different ways to profit from Portuguese real estate, including renting it out to tourists, students, or permanent residents. After a few years, you can then resell it for a higher price. Combining the two methods can also produce profit for you. However, you will need to bear in mind transaction costs and taxes. Investing in Portuguese real estate is a safe investment. It also pays to consider the various aspects of the Portuguese real estate market before making the purchase.

Investing in real estate in Portugal is a safe investment

A property in Lisbon will typically fetch the highest return on investment, but it will also be the most expensive. You may also find properties in the Algarve, an area known for its multiple hotels and villas along the Mediterranean Sea. Many foreigners spend the summers in this region, so purchasing real estate in this area can make a great investment. You can also lease your property out to tenants in the region.

Another reason that Portugal is a safe investment is the low cost of property. Portugal offers affordable real estate and high returns on property investments. The country’s low cost of living and stable economy have made real estate in Portugal a popular choice among international investors. Portugal’s property market has been growing steadily over the last few years, making it a safe bet for those seeking to invest in real estate.

The country is one of the top tourist destinations in the world, and the World Tourism Organization predicts that 11,423,000 international tourists will visit Portugal in 2017. With a booming tourism industry, investing in a property in this sector can generate a good profit for investors. Moreover, Portugal’s political stability is an added advantage. You can apply for citizenship or residency in Portugal, if you wish, and you can move freely in the Schengen zone.

There are several ways to profit from Portugal’s real estate market. First, you can rent your property out to tourists, students, or permanent residents. Then, you can resell it at a higher price after a few years. In this way, you can earn a profit while you wait for a higher demand in the future. Of course, you must remember to pay the necessary transaction fees and taxes.

Taxes to bear in mind

Buying real estate in Portugal requires several important taxes to be paid. First, you should know about the Stamp Duty, otherwise known as the Imposto de Selo. This tax is applied to every contract involving real estate. It is currently 0.8% of the property’s registered fiscal value. Also, mortgages are a significant part of buying real estate in Portugal. The tax rate varies depending on whether you are buying a property in an urban area or a rural one.

In order to purchase real estate in Portugal, you must have a taxpayer identification number. This document is called the Numero de Indentificacao Fiscal (NIF) in Portugal. If you are a foreigner, you must obtain an NIF before you can buy property in Portugal. Once you have your NIF, you can purchase property in Portugal. However, you must bear in mind that you must pay taxes on the land you buy.

Another tax to bear in mind when buying real estate in Portuguese is the Property Tax. The property tax varies depending on the value of the property. In Portugal, the average house price per square meter will be around 1,117 EUR. Furthermore, there are local taxes, including property taxes. The local authorities will determine the tax rates. Mortgages in Portugal are readily available, but the conditions and rates vary according to bank and property type.

Capital gains are another important factor to consider when buying real estate in Portugal. For non-residents, the capital gains tax rate is 25%. In other parts of Europe, this tax rate is zero. For non-resident individuals and companies, the capital gains tax rate is 25%. However, if you re-invest the capital gains, the tax rate will increase to 50%. So, it is advisable to check the taxes when buying real estate in Portugal.

Buying property in Lisbon under the Golden Visa program

The golden visa program allows foreign investors to buy commercial property in Portugal. The investment amount required is EUR500,000 or EUR350,000 if the property is to be used for commercial activities. The investment can be made in metropolitan or coastal areas. In the real estate market, you can invest in various types of property, including residential and commercial. For example, you can invest in a residential property in the center of Lisbon or a coastal property.

There are several fees and documents that you must submit before purchasing property in Portugal. The initial application fee is EUR5,325 per person. A processing fee of EUR533 is also required. In addition, you will need to pay relevant taxes upon purchase, including Stamp Duty, notary and legal fees, and mortgage taxes. Some of these taxes are recurring. If you do not plan on relocating to Portugal for a long time, it is a good idea to seek advice from a financial advisor before making the decision to purchase residential property in Lisbon.

The investment threshold is EUR500,000 for a new build property and EUR350,000 for a fixer-upper property. If you’re planning on renovating an existing building, you can get the Golden Visa program for low-density properties. If you’re interested in buying commercial property in Lisbon, you should consider a program that combines residential and commercial property. While the initial investment is not as high as buying a new build property, it is still a very good option for people who need to invest in a new location.

The biggest tax that Portuguese citizens have to pay when buying property in Lisbon is the AIMI. This is an extra tax on the profit of selling assets. The tax rate is different for non-residents and Portuguese residents. Non-residents pay a flat 25% tax while Portuguese nationals pay 28%. Moreover, non-residents pay only half of the gains. You can still buy property in Lisbon and enjoy tax benefits while living in the country.

Buying property in Cascais under the Golden Visa program

Buying property in Cascais under the Portuguese Golden Visa program is a great way to live in the beautiful region and qualify for residency in Europe. Under the program, foreign investors can buy properties in Portugal and enjoy residency status for five years. The program does not require full relocation to Portugal, just seven days a year. After five years, applicants can apply for citizenship. The process is relatively easy and is ideal for first-time buyers.

One of the greatest advantages of buying property in Cascais is its location. It is only half an hour away from Lisbon by train and has good public transportation. There are frequent buses between the two cities. Many businesspeople in Lisbon choose to live in Cascais for the proximity of the city. This makes buying property in Cascais a great investment opportunity for those on a tight budget. In addition, the property prices in Cascais are higher than the national average.

Portuguese property is a safe investment and is growing in value. Even though the rest of the world is struggling with the impact of the economic crisis, Cascais and other regions of Portugal continue to see significant growth. In other words, a foreign investor can make the most of a golden visa program by purchasing property in Cascais. With the help of the program, non-EU citizens can secure residency in Portugal, while living in a beautiful and affordable country.

Purchasing property in Cascais under the Golden Visa requires a minimum investment of EUR350,000 in property. For properties in less populous regions, the minimum investment is 20% less. This will allow you to live and work legally in Portugal. The investment must be at least 30 years old, and the property must be located in an urban rehabilitation area. For commercial property, you’ll have to seek additional approvals.

Renting rooms to students in Portugal can bring a profit of around 6%

A rental contract in Portugal usually has a two-year default duration and can be renewed for up to three years. Written contracts are required. Verbal agreements are not legally recognized. A landlord can increase the rent once a year. In Portugal, tenants are not allowed to enter their home without permission, but if they see the landlord entering their home with their own key, they should report the landlord. Renters must pay three months of rent upfront. In addition, they may be asked to pay a security deposit. This money is not returned unless there is a violation.

There are two main ways to rent out rooms to students in Portugal. The first option is to share a flat with another student. This option is the most popular with students in Portugal. While the rent for a single room is typically around 200 euros, a two-bedroom flat can fetch up to EUR450 per month. A good way to find students is to search online for student listings. Most online portals have a search option for shared flats, and there are also specific websites for students in Portugal.

Another option is to rent out the rooms to students in Portugal as furnished rental apartments. The taxation in Portugal is quite complicated. Your tax position depends on your resident status, the number of rooms you rent out, and the rental income. You should get advice from a reputable accountant before starting this activity. Also, make sure you have a plan to minimize double taxation. Remember, taxation on rental income in Portugal is always payable in Portugal.