Buying property in Portugal is an exciting opportunity—whether you’re relocating, retiring, or simply investing in Portugal’s booming real estate market. However, as with any international purchase, there are risks and common pitfalls that can complicate your experience if you’re not well-prepared.
Here are the top 10 mistakes to avoid when buying real estate in Portugal, and how to protect your investment from day one.
Top 10 Mistakes to Avoid When Buying Property in Portugal
1. Not doing enough research
One of the biggest mistakes when buying property in Portugal is failing to research thoroughly. Many international buyers are unaware of the specific legal procedures, tax rules, and property regulations that apply in Portugal.
Each municipality may have different building restrictions or zoning plans. Understanding the type of property—whether it’s urban, rural, or part of a condominium—is crucial.
Also, familiarize yourself with property tax obligations, residency visa requirements if you’re investing in Portugal, and the difference between freehold and leasehold properties.
2. Not visiting the property in person
Relying solely on online listings or virtual tours is a major risk when buying real estate in Portugal. Photos can be outdated or strategically taken, and you won’t be able to assess noise levels, neighborhood safety, or structural issues from a screen.
Visiting in person allows you to truly understand what you’re buying. You can assess the condition of the property, meet neighbors, and explore local amenities like shops, healthcare, and public transport—critical for both living and investing in Portugal.
3. Not working with a local real estate agent
Hiring a trusted local agent is one of the best ways to protect yourself when buying property in Portugal. A knowledgeable agent understands market pricing, negotiates on your behalf, and often has access to off-market deals.
They can also explain key details, such as energy certificates, habitation licenses, and property registry documentation, which are required when buying real estate in Portugal.
4. Not engaging with a local lawyer
Every foreign buyer should work with an independent Portuguese property lawyer. This ensures the entire purchase process is compliant with local laws, from due diligence to deed signing.
Your lawyer will verify the legal status of the property, check for debts or liens, and ensure all contracts are clear and fair. This is particularly important when investing in Portugal, where legal systems and terminology may differ from what you’re used to.
5. Underestimating the Full Costs
Another major pitfall when buying real estate in Portugal is overlooking the full cost of the transaction. Beyond the purchase price, there are various taxes and fees to account for:
- IMT (property transfer tax)
- Stamp Duty (0.8%)
- Notary and registry fees
- Legal fees
- Agency commissions
- Ongoing maintenance and property management fees
If you’re investing in Portugal for rental income, also consider local income taxes and property management costs.
6. Ignoring Local Culture and Bureaucracy
Portugal is known for its relaxed lifestyle—but that also extends to its bureaucracy. Processes can be slower than in other countries, and personal relationships often play a key role in getting things done.
When buying property in Portugal, it’s important to respect local customs, be patient with timelines, and understand the administrative steps. For instance, utility connections or license approvals may take weeks, not days.
7. Overlooking Currency Exchange Risks
If your funds are in a different currency, exchange rate fluctuations can significantly impact your budget when buying real estate in Portugal. A small shift in rates can cost you thousands.
Planning ahead and using a foreign exchange service allows you to lock in rates and reduce exposure to market volatility. This is especially important for larger investments or ongoing transfers if you’re planning to live or invest in Portugal.
8. Skipping the Property Inspection
A professional property survey or inspection is a must before buying property in Portugal. Older homes, especially in rural areas, may have hidden issues like dampness, poor insulation, outdated wiring, or even illegal extensions.
These issues can lead to unexpected renovation costs or make the property harder to insure or resell later. An inspection gives you peace of mind—or negotiating power.
9. Not considering the potential resale value
Even if you’re planning to live in the home forever, life changes—and so should your investment strategy. One of the smartest things you can do when buying real estate in Portugal is to think about the property’s long-term appeal and resale potential.
Proximity to schools, transport, healthcare, and lifestyle amenities can affect both rental demand and future sale price. If you’re investing in Portugal with the idea of renting out the property, these factors are even more critical.
10. Rushing the buying process
The excitement of buying property in Portugal can sometimes lead to rushed decisions. But taking shortcuts, skipping legal steps, or committing without full clarity can backfire.
A smooth transaction takes time: getting tax numbers (NIF), opening a Portuguese bank account, due diligence, notarial procedures, and more. Rushing can lead to costly mistakes or legal issues down the road.
For more videos about investing or moving to Portugal, explore our YouTube channel here: YouTube Channel Portugal Residency Advisors®.
Why work with Portugal Residency Advisors?
Local Expertise
We know Portugal. Due to our extensive local knowledge, we believe that concentrating our services in a single country destination is the best way to give you the most thorough and useful information.
Holistic Approach
One single channel of communication for the entire process. We provide you with a comprehensive service that covers all aspects of your move, from identifying the ideal residency visa to finding your new home or helping you to settle.
Transparent Service
We recommend what’s best for you based on an extensive process experience that saves time and money to clients. Our pricing is clear and competitive, and we don’t sell services that make us more money.
Simple Process
Technology plays a very important role in our company. We minimize our clients’ involvement in paperwork. We are customers ourselves and we know how to serve you.
Frequently Asked Questions About Mistakes to avoid when buying property in Portugal
What are the mistakes to avoid when buying property overseas?
Common mistakes include not conducting thorough research, failing to consider local laws and regulations, not hiring a local attorney or real estate agent, underestimating hidden costs, and neglecting to visit the property in person before buying.
What legal considerations should I keep in mind?
It is important to understand local property laws, ownership restrictions, tax implications, and any specific regulations for foreign buyers. Hiring a local attorney who specializes in real estate is highly recommended.
Why should I hire a local real estate agent?
Local real estate agents have invaluable knowledge of the market, access to a wider range of properties, and can provide guidance on local customs, negotiation strategies, and potential pitfalls specific to the area.
What hidden costs should I be aware of?
Hidden costs may include property taxes, maintenance fees, local assessments, and legal fees. It is essential to budget for these expenses to avoid financial strain after the purchase.
How can I avoid currency exchange risks?
Currency exchange rates can impact the cost of buying property overseas. Consulting with a foreign exchange specialist can help you navigate currency fluctuations and potentially save on conversion fees.
Should I consider financing options?
Financing options vary from country to country. It’s important to explore local mortgage options, interest rates, and eligibility requirements, as well as consider the potential impact on your finances and currency exchange rates.
