Foreigners aiming to achieve residency status in Europe can do so by undergoing due diligence and purchasing residential or commercial real estate valued at €500,000 or more. However, the investment requirement can be lowered to €280,000 if the property in question requires reconstruction and is located in a sparsely populated area of the country. As of January 1st, 2022, foreigners are prohibited from buying housing in Lisbon, Porto, and coastal resort towns. Investments can be made in properties located in the Azores, Madeira, or inland regions of the country. Rising Property Prices in Portugal Property prices in Portugal are on a continuous upward trajectory, increasing by an average of 7% per year, according to PwC analysts. Lisbon boasts the highest property prices, with costs reaching up to €10,000 per square meter. Property Taxes in Portugal When purchasing real estate, buyers are subject to taxes and fees amounting to 12 to 15% of the property’s value. The primary tax expense is the transfer tax, which varies based on the property’s value, type, purpose, and location. – Primary Residence: No transfer tax is applied to the first €92,407 of the purchase price for properties designated as primary residences. Beyond this amount, the tax rate increases. – Annual Council Tax: Property owners are required to pay an annual council tax ranging from 0.3% to 0.8% of the appraised property value. For properties undergoing reconstruction, a preferential tax regime is often available, exempting buyers from both the transfer tax and annual council tax. Maintenance Costs Maintaining an 85-square-meter apartment in Portugal typically costs between €65 and €170 per month. Conclusion Investing in real estate in Portugal offers potential residency benefits and a growing market, though it comes with significant tax obligations and maintenance costs. Understanding these financial commitments is crucial for prospective buyers.
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