Buying a home in Portugal: what it really costs

Can foreigners buy?

Yes, same rights as Portuguese citizens (IMT increase for foreign second-home buyers announced Sept 2025).

Costs on top of the price

3-12% · IMT transfer tax 0-8% (progressive) + stamp duty 0.8% + notary/registry 0.9-1.2% + legal 1.25-2%.

Yearly property tax

IMI 0.3-0.45% of taxable value (urban), set by municipality.

Tax on rental income

Long-term: 25% flat for non-residents; short-term (AL) under the simplified regime only 35-50% of gross is taxable.

What holiday rentals earn

No sourced STR gross yield found.

Long-term rent yield

3.8-4.9 (GPG Q2 2026: national 4.29, Lisbon 3.76, Porto 3.96, Faro 4.48)% gross

Holiday-rental rules

Alojamento Local (AL) registration is mandatory; since Nov 2024 municipalities can freeze new AL licences in containment zones (Lisbon, Porto use this); condominiums can object with >50% of owners.

Sources

• https://www.globalpropertyguide.com/europe/portugal/buying-guide
• https://www.oncorporate.com/news/rental-income-tax-portugal
• https://www.sovereigngroup.com/portugal/private-clients/new-rules-for-alojamento-local-al-licensing-in-portugal-2025/
• https://www.globalpropertyguide.com/europe/portugal/rental-yields