Building a house in Portugal is no easy feat—especially if you are new to the customs, rules and regulations of the country.
It’s essentially to understand all the architectural and construction guidelines required to legally build a property. Hence why, in this guide, we will help you simplify the process of building a house in Portugal, offering practical steps and expert advice, even for international customers.
With this guide, building a house in Portugal becomes an achievable dream, with all the tools needed for success.
Initial Considerations of Building a House in Portugal
It’s not merely building a house in Portugal. It’s laying down the brick upon which you will establish your future, whether you are from Portugal or an international investor. Knowing what goes into this market puts you ahead of others.
That’s why we tried to make it simple, step by step, from choosing the perfect plot of land to turning that key into your new front door.
1. Research the Portuguese Property Market
The first step is to study the real estate market. Portugal offers a wide range of locations, so choosing the right place to build your house is critical.
On the one hand, you have Lisbon and Porto, which will be full of city life, but can expensive and strict. On the other hand, it might be possible to have a little more dramatic scenery in the Algarve and interior parts, with lower house prices.
2. Find the Right Location
A good location is fundamental to building a house in Portugal. It should incorporate today’s preferences together with future valuation. Hence, you need to consider things like:
- Proximity to schools, hospitals, and shopping centers if you plan a family home.
- Access to public transport if you’re not planning on driving everywhere.
- Local climate: for example, Northern Portugal is rainier, which might affect building materials and methods, whereas the south enjoys more sunny days.
3. Get Professional Help
Navigating the legal and construction landscape requires professional help:
- Hire a team of legal consultants, like Portugal Residency Advisors, to assist with the legal intricacies of land purchase and construction permits when building a house in Portugal.
- Engage with a reputable renowned real estate agent at PRA who knows the ins and outs of the local market.
- Moreover, you may consult an architect through Portugal Residency Advisors who can design a home that meets your needs while adhering to local building codes.
4. Planning for Architecture
If you are building a house in Portugal, plan the design of your home by working closely with your architect.
You can be creative about your living spaces but also ensure that everything is above code and environmentally friendly. Addittionally, you could also discuss materials and techniques suitable for the local climate and landscape.
5. Starting Construction and the Usage Permit
Once your plans are set and permits are granted, construction can begin. During this phase:
- Monitor the construction process: Regular site visits can help ensure everything goes according to plan.
- Stay in touch with your team: Keeping open lines of communication with your architect and builder can help preempt and solve issues promptly when building a house in Portugal.
Before you can move in after construction, you’ll need a usage permit from the local council confirming that the property is habitable and has been built according to the approved plans.
Legal & Technical Steps of Building a House in Portugal
Obtaining Preliminary Information
The first step in building a house in Portugal is to obtain the previous information request, otherwise known as “Pedido de Informação Prévia,” from the City Council.
This essential document determines whether you are legally eligible to build a house in Portugal on the plot you’ve picked and explains the specific regulatory conditions.
Suppose the lot is within a planned development (“loteamento”). In that case, this document is not required since, among other things, a construction permit is already included in the legal documents about the development.
Conducting Topographical Survey and Architectural Design
Before you can start building a house in Portugal, you must carry out a plot survey. This survey provides more accurate information concerning the land’s topography, which is very important in creating the architectural design for the building.
Such detailed drawings and site plans show precisely where your house will sit on the plot and its design relative to the surroundings of the architectural project.
These documents, along with proof that water and electricity will be available, are attached. Together, they comprise an application to be submitted for consideration and approval with the City Council.
This will be a massive step because everything that could go wrong will be covered before the construction in Portugal starts.
Submission of Engineering Projects
The topology step is followed by submitting an engineering project, the plans of which are approved after the architectural ones for building a house in Portugal.
They contain detailed plans concerned with the technical execution of construction related to water, sewage, thermal and acoustic insulation, gas supply, communications, and electric systems.
More plans will be required depending on the kind and area of the property. Such projects also have to undergo the City Council’s approval; therefore, the local safety and sustainability levels are assured when they approve engineering designs.
Monitoring the Approval Process
During construction in Portugal, all these steps are supposed to be done with the city council’s approval. These are mostly paperwork, and we will communicate with you in case of specifications or any change in the procedure.
After the City Council officially releases a building permit, the builder will finally inform you that construction in Portugal can start.
Construction Supervision
The process of building a house in Portugal requires a legally qualified civil engineer. The engineer controls every stage of the building process so that he may realize it is conducted as validly approved and follows the laws in place.
He will also be responsible for the future certification of the construction works, and a team of experts will accompany him.
Such a team ensures everything, from designing the structure to picking up your house’s keys, is implemented under stern quality and safety measures that would eventually lead to the successful conclusion of your home.
How Much To Build A House In Portugal?
Some factors vary the average cost per square meter of a house in Portugal. The kind of finishes you want and the kind of materials are the general determinants of the overall cost.
The location of your build is critical in financial planning. For example, setting up a house in urban centers or coastal areas is usually expensive because the price of land and construction services is generally high in such regions.
According to the latest statistics, building a house in Portugal generally costs between €2,200 and €2,500 per square meter.
If you are building a house in Portugal, all these must be planned in the budget. Always keep money aside for a contingency fund, around 10-20% of the total estimated cost, or take an insurance policy for this unprecedented expense arising during construction.
Therefore, through such proactive financial planning, one prepares for the unknown costs and keeps the construction project on course.
How Long Building a House Can Take
If you’re planning on building a house in Portugal, it typically takes about one to two years to complete, from starting the design to moving in. This timeframe includes everything from drawing up plans to actual construction.
‘Key-in-Hand’ Option
Building a house in Portugal usually takes one to two years, from the start of designing to the end of moving into the house. This time covers everything: putting forward plans and general construction.
The ‘key-in-hand’ is the most direct way of building a house in Portugal. In this procedure, most of the final decisions on the house’s design and obtaining permissions are done in advance for you.
It’s still a personal choice of interior finishes and materials but without the burden of starting from scratch.
Post-Construction
So, you’ve just finished building a house in Portugal – congratulations! What follows is pretty straightforward.
After ensuring everything went right and there were no deviations from the original design, your builder has to contact the local City Council. They would inform them that building a house in Portugal is executed and that they would apply for a license for a residence.
This stage includes submitting all documents and certificates to the relevant authorities, proving that the house meets the highest legal standards.
Settling into Your New Home
Once building a house in Portugal is all wrapped up and you’ve got the residential license, a few key responsibilities fall into your lap:
Connecting Utilities
The first thing you’d want to do is turn on all of your utilities. Now that we’re into the extended definition, we have much to go through, but I won’t bore you with it.
Of course, this includes water, electricity, gas, and the like. If you don’t know how to turn these on, that’s perfectly fine.
A good firm in Portugal will set up those services for you. They save loads of time and hassle and are handy if you’re managing things from abroad or are strapped for time.
Regular Maintenance
Next, it’s crucial to keep your new home in top shape. This means regular checks and maintenance of things like your heating system, solar panels, and maybe even a pool if you have one.
Staying on top of this is essential because it helps avoid more significant problems down the line, problems that your warranty might not cover.
If you don’t have the time to manage it or live elsewhere, consider hiring a local property management company to take care of it.
Handling Tax Obligations
There’s also the tax side of things. After building a house in Portugal, you must then declare with the Tax Department at the local level about your property, which gives them a chance to evaluate it for the Municipal Property Tax, or IMI.
It gets complicated, especially if you need help understanding the tax system. Many homeowners find it helpful to work with an accountant in Portugal who is used to dealing with international clients. They can ensure you remain on top of all the tax responsibilities on time.
Buying a Turnkey Property in Portugal
A turnkey property is a fully furnished home that’s ready to move into with no need for additional construction or renovation.
From a legal perspective, most of the building is defined by your contract, and you have much room to play at the initiation stages.
This entails all your legal papers, including your identity card, tax number, and proof of residence.
One added advantage is that you can finish every building stage yourself when building a house in Portugal through a turnkey project.
It is great fun to change the features of your future home when building a house in Portugal, but knowing the implications of what you do is helpful. Minor house renovations like color or material changes should not change the construction timeline.
Tips for a Successful Construction
Success in construction in Portugal relies on meticulous planning and active involvement:
1. Understand the Costs
Building a house in Portugal can be expensive. Construction costs generally start as low as €300 per square meter, so budgeting effectively is crucial.
2. Choose the Right Team
Of course, success in building a house in Portugal significantly depends on whom you associate with. The architects, builders, legal advisors, and commentators ensure everyone knows the local regulations that may come into play in construction.
3. Stay Engaged
Even with the best professionals, keeping up your interest during the process will help you maintain your house while it is under construction. Frequent communication or involvement in the key decisions will enable you to keep your house on course to your expectations.
4. Plan for Contingencies
You must always prepare for additional costs when building a house in Portugal. Most of the time, things never go as planned, and some extra money keeps your project on course without frequently having break-ups that make you anxious.
5. Keep Documentation Organized
Have all your documents and contacts well structured, showing all the steps you took or are taking. This will come in handy when trying to manage your project better, and for any references you might need when handling legal matters.
Taxes and Fees
One cannot estimate only the cost of the land and building construction when there is a journey called building a house in Portugal, for many taxes and fees are involved.
The construction cost can vary, but it can be as low as €300 to purchase a square meter in Portugal. From there, quite a lot of space is usually available to spend based on your budget and preference.
Understanding the Tax Structure
As you move forward with building a house in Portugal, you’ll encounter several essential taxes:
- IMT (Property Transfer Tax): This is applicable when you purchase land. The rate varies depending on the property’s value and location.
- VAT (Value Added Tax): Applied to construction services and materials, this is a significant part of your budget planning.
- Stamp Duty: Paid at the time of the property transaction.
- Other Fees: These can include legal fees, notary fees, and administrative costs involved in registering the property.
Taxes and Fee
As pointed out above, taxes and levies should be considered when planning to build a house in Portugal.
This means that your construction project will not be interrupted by unforeseen or miscalculated costs in the middle of it.
It would also be helpful to ask a local tax advisor or a property lawyer who can give more detailed insights into how much to expect in terms of pay, depending on the project’s specifics.
Regular Updates from Your Builder
As you begin building a house in Portugal, ensure that your constructor keeps you posted on any changes affecting your budget.
It includes material cost changes and the project’s scope refinement, which may impact the overall tax assessment.
Planning for Long-Term Tax Obligations
After building a house in Portugal, your financial responsibilities remain. You’ll need to register your new home with the local tax office, which involves additional paperwork and possible fees.
This registration is crucial as it affects your annual property taxes, known as IMI (Municipal Property Tax), calculated based on the property’s assessed value.
Why to Work with Us?
Planning to move to Portugal and build your dream house? Feeling overwhelmed? We know!
There’s no need to worry, as PRA is here to help! We bring a wealth of knowledge about the local real estate and construction landscape directly to your doorstep so your build is as smooth and stress-free as possible.
Let’s talk about building a house in Portugal! Visit Portugal Residency Advisors to learn how we can streamline your construction project.
Whether you’re ready to jump right in or have a few questions, we’re here to help you take the first steps towards building a house in Portugal. Reach out today, and let’s make your dream home a reality!
Frequently asked questions about Building a House in Portugal
How much to build a house in portugal?
The cost of building a house in Portugal can start as low as €300 square meter. Construction in Portugal is generally more affordable than buying a new building, so many opt to build to customize features and save costs.
How much is house tax in Portugal?
The annual municipal property tax (IMI) for urban properties is between 0.3% and 0.5%, and for rural properties, it is 0.8%. Stamp duty is applied at 0.8% or 10% during a property transaction.
Do you need planning permission to build a house in Portugal?
It would help if you had a Licença de Construção (construction license) for building a house in Portugal. Obtaining this permit is essential before beginning any construction in Portugal.
How to get a builder’s license in Portugal?
Apply through the Institute for Public and Private Construction for a builder’s license, Alvará de Construção. This is required for contractors involved in construction in Portugal.
What factors can affect the cost of building a house in Portugal?
Land prices, labor, materials, permits, and taxes are key factors influencing the cost of building a house in Portugal. All these components contribute to the overall expense.
How can I keep costs down when building a house in Portugal?
You can reduce costs by selecting cheaper land and minimizing labor or design expenses. Choosing a location with nearby basic facilities also helps reduce construction costs in Portugal.
Is buying an existing home cheaper than building one in Portugal?
Buying an existing home in Portugal is generally cheaper than building a house. Many choose this option for faster and more economical solutions.
Are prefabricated houses in Portugal a thing?
Yes, prefabricated houses are famous in Portugal and are often more affordable than traditional builds. Several companies offer various models for those building a home in Portugal.
Can I get a building mortgage in Portugal as a foreigner?
Yes, many banks in Portugal offer mortgages to foreigners. Before applying for construction in Portugal, ensure you have an NIF and a Portuguese bank account.
How long can you stay in Portugal if you own a property?
You can stay for up to 90 days in six months without a visa. A visa is required in Portugal for extended stays, such as moving for work or retirement.
