How much tax does it cost to immigrate to Portugal by buying a house? How much does it cost?

Portugal has always been a tourist destination and a popular destination for investment immigrants. In recent years, more and more local buyers want to buy a second house, and overseas investors have also targeted these properties. In addition, you can get immigration status by buying real estate in Portugal. However, attention needs to be paid to the taxes and fees that need to be paid.

1. of Gold Residence Visa in Portugal

The Portuguese real estate market was affected by the financial crisis in 2008. The global economic downturn caused a heavy blow to the Portuguese real estate market, causing real estate prices to plummet. It was not until 2014 that the real estate market began to recover. Even so, the growth of house prices was very slow.

Since the introduction of the Portuguese Golden Visa, there has been renewed interest in Portuguese real estate. At the same time, Brexit and US investors looking for Plan B in Europe have also contributed to the booming Portuguese real estate market.

So, what is the current situation of Portuguese real estate? Is it still worth investing in? What tax issues do immigrants need to know in advance?

Analysis of the current situation of real estate in Portugal in 2.

In Portugal, most locals are willing to buy a house rather than rent a house, with a property ownership rate of 77.3%, slightly higher than other European countries. Portugal's house prices in 2022 also rose nearly 17.2 percent from last year.

According to the Portuguese National Statistics Institute, the average cost of buying a house in Portugal in the first quarter of 2022 was 1,454 euros per square meter, an increase of 7.3 percent over the previous year. There are still many real estate investors targeting Lisbon and Porto, as well as popular tourist areas such as the Algarve. Although the golden visa has requirements for investment in some of the above-mentioned regions, it does not affect the enthusiasm of real estate investment in Portugal.

So, will Portuguese house prices fall? It seems unlikely that the current economic environment in Portugal has put pressure on the purchasing power of Portugal's local residents. In June, inflation rose by 8.7 percent, while mortgage rates rose as the euro interbank rate rose sharply. So this also leads, on the one hand, to buy a house in Portugal will become more expensive.

Let's look at another set of data. According to the data of Portugal's National Statistics Institute (INE), from the beginning of 2022 to the present, there are 25 cities with a population of more than 100000 in Portugal, and house prices are rising.

Among them, Gaya New Town had the largest increase, up 20%, followed by Gondomar (+19.8%), Setubal (+19.4%) and Sintra (+18.5%).

At present, buying a house in Lisbon is still the most expensive, with the average price now reaching a median of 3,757 euros per square meter. It was followed by Cascais (3,319 euros/square meter), Oelash (2,873 euros/square meter) and Porto (2,495 euros/square meter). It seems that the more expensive the house in Portugal, the more people buy it, not entirely because of the gold residence visa.

3. what taxes are involved in buying a house in Portugal?

In addition to the cost of the house itself, the following taxes are mainly involved when buying a house in Portugal:

1. Municipal real estate transfer tax (IMT): the cost is between 2% and 8%, depending on factors such as property type, value, location and use of the property (e. g. temporary and permanent residence);

2, municipal property tax (IMI): when buying a house without paying, pay once a year (can be exempted), depending on the nature of the property, the value of tax assets in the range of 0.4-0.8,

Stamp duty (IS): 0.8 per cent of the property price;

4. Registration tax: about 500 euros, depending on where you register your property;

5. Family insurance (optional): The basic policy starts at 80 euros per year and the multi-risk policy starts at 100 euros.

Finally, I would like to remind you who want to buy real estate in Portugal to invest:

Portugal has a "subrogation law," meaning that any debt can be attached to the property, rather than as an individual original borrower. In other words, if the property has unpaid property taxes, utility bills or is mortgaged for personal debt before the transfer, these risks will be passed on to the next property owner. Therefore, the best way to avoid this situation is to hire a reliable lawyer to check the registered ownership (Certid?ode Teor) and do relevant real estate background checks to purchase a safe and reliable real estate.