Why is it worth it to invest in Portugal Property?

Portugal is an attractive prospect for real estate investors. Buying property in Portugal is a great way to invest your money: the annual return on investment in commercial real estate in Portugal rose to 8% in 2022.

Borders and ports are fully open for seamless trade with other EU member states. The country also boasts political stability with a democratically elected parliamentary government that warmly welcomes foreign business and investment, establishing an advantageous economic and regulatory environment that is conducive to foreign contribution.

Reasons to Invest in Properties in Portugal

The country has emerged as an alluring financial destination, offering a thriving real estate market with a range of opportunities for investors. The growing demand for long-term rentals, fuelled by a thriving tourism industry and an increasing number of international residents, creates a favorable environment for property owners.

The Portuguese government provides support for future investors, aiming to make their ventures. According to AICEP and INE, the country experienced a 2,2% GDP growth, 4,3% export growth, 44% exports/ GDP, 8,7% gross fixed capital formation, and only 7,2% unemployment rate.

Portuguese Real Estate Investment: Taxes & Fees

By understanding the taxes and fees involved, investors can make informed decisions. For Propriety Acquisition, the costs are Property Transfer Tax (IMT), levied on property transfers, with rates varying based on property value and buyer status; the Annual Property Tax (IMI), a local tax based on property value; the Stamp Duty (IS), applied to property deeds and contracts.

Portugal Property Investment: Is it Worth it?

The country's strong rental market provides consistent income potential, supported by appealing taxation policies, and a stable real estate market. Considering the quality of life, rental income potential, and future growth prospects, Portugal is an appealing destination for real estate investors.

Property prices in Portugal remain far lower than in comparable European countries, while average rental yields are a relatively high 5% – a perfect combination for anyone seeking to profit from a residential property they can also visit from time to time.

It’s unsurprising that the demand for investment in Portugal also continues to increase, with housing transactions in Portugal rising by 8% year-on-year in 2022 and new construction licenses increasing by 3.1%.

Incentives for investors

There are several incentives for foreigners to invest in Portugal. The non-habitual residence scheme provides investors with an exemption on all foreign sources of income for 10 years and a 20% flat rate on incomes within the country.

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