Buying property in Portugal as an American – is it hard?

If you’ve been dreaming of a villa in the Algarve or a city apartment in Lisbon, you certainly aren’t alone.

In fact, the number of US citizens living in Portugal jumped by over 36% between 2023 and 2024, cementing Americans as a key demographic in the Portuguese property market.

But while the dream is clear, the logistics can be a little murkier. Can you actually own land there? How do taxes work for US citizens? And is it even possible to get a mortgage from across the Atlantic?

Use Wise to save money on your property purchase

Buying a property abroad is a big step and involves important financial decisions. Wise, an international money transfer company, provides specialist support to help you navigate large international transfers and save on exchange fees. Fill out Wise’s online form today to find out how they can assist you.

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Can Americans buy property in Portugal?

Yes, absolutely. Portugal has no restrictions on foreign property ownership.

You do not need to be a resident or a citizen to buy a home, land, or commercial building. In fact, the process for Americans is legally identical to that for Portuguese citizens, with just a few extra bureaucratic steps involving tax numbers and banking.

When you’re ready to pay your deposit, you can use the Wise Account to send money to Portugal with transparent fees and the mid-market exchange rate.

Housing

Buying property in Portugal: a guide for expats

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What buying property gets you

Beyond the obvious – a home in one of Europe’s safest and sunniest countries – buying property in Portugal can offer:

• A solid investment: Despite global fluctuations, the Portuguese market has remained resilient, particularly in prime areas like Lisbon, Porto, and the Algarve.
• Rental income potential: Portugal’s tourism industry is robust. If you buy in the right area and navigate the licensing laws correctly (more on that below), you can generate significant rental yield.
• A base in Europe: While owning property doesn’t automatically grant you the right to live there full-time (you still need a visa for stays longer than 90 days), it gives you a physical foothold in the EU.

What buying property does not get you

It is crucial to correct a common misconception: buying real estate in Portugal no longer qualifies you for the Golden Visa.

Previously, purchasing property worth €500,000 (or less in low-density areas) was a direct route to residency. However, as of October 2023, the real estate investment route for the Golden Visa was terminated to combat the housing crisis.

If you are looking for residency, you will need to explore other visa options, such as the D7 (Passive Income) Visa or the D8 (Digital Nomad) Visa, or look into the remaining Golden Visa investment routes (such as investment funds or cultural donations).

Buying a house is now strictly a lifestyle or financial investment, not an immigration shortcut.

Visas & immigration

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How difficult is the process?

The process is generally considered straightforward, though it can be bureaucracy-heavy compared to the US. You will not typically deal with title insurance companies; instead, a notary and a lawyer (advogado) handle the legal checks.

The key forms and documents involved include:

• NIF (Número de Identificação Fiscal): You cannot do anything financial in Portugal without this tax number. As a non-resident, you may need a fiscal representative to get one.
• CPCV (Contrato Promessa de Compra e Venda): The promissory contract. This sets out the terms of the deal and usually requires a down payment (deposit) of 10% to 30%. It is legally binding.
• Escritura (Escritura Pública de Compra e Venda): The final deed signed in front of a notary, where the balance is paid and ownership transfers.

Typical timelines

• Finding a property: 1–3 months.
• From offer to CPCV: 2–4 weeks (depending on due diligence).
• From CPCV to Deed (Closing): 1–3 months.

In total, expect the process to take 3 to 6 months from starting your search to getting the keys.

Transferring money to Portugal for the purchase

One of the biggest hurdles for Americans buying abroad is moving large sums of capital across borders. Traditional bank transfers can be slow and often come with high wire fees and unfavorable exchange rates.

You can use Wise to move money to Portugal for your property purchase. Wise uses the mid-market exchange rate – the one you see on Google – without the expensive markups banks often add.

• Pay the seller directly: In many cases, you can send funds directly to the seller or notary’s account.
• Move money between accounts: If you have already set up a Portuguese bank account, you can use Wise to transfer your down payment from your US account to your Portuguese IBAN securely.

Fill out Wise’s form today to see how they can help you with an overseas property purchase.

What are the tax implications?

You will face taxes on both sides of the Atlantic. It is highly recommended to speak with a cross-border tax specialist.

In Portugal

• IMT (Imposto Municipal sobre as Transmissões Onerosas de Imóveis): The transfer tax paid upon purchase. Rates are progressive based on the property value, ranging from 0% to 8%. Note: As of late 2025, the government has proposed a flat 7.5% IMT rate for non-resident buyers, so keep a close eye on legislative updates.
• Stamp Duty (Imposto de Selo): A flat rate of 0.8% of the purchase price.
• IMI (Imposto Municipal sobre Imóveis): The annual property tax. Rates vary by municipality but generally fall between 0.3% and 0.45% for urban properties.
• AIMI: A “wealth tax” extension of IMI, applicable if your total Portuguese property holdings exceed €600,000.

In the US

The US taxes are collected on citizenship, not residency.

• Reporting: You likely won’t owe US tax on the purchase, but you must report the asset if the value of your specified foreign financial assets exceeds certain thresholds (Form 8938).
• Capital Gains: If you sell the property later, you may be liable for capital gains tax in both Portugal and the US. However, the US-Portugal Tax Treaty helps prevent double taxation, allowing you to claim credits for taxes paid in Portugal.

Taxation

The tax system in Portugal

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Local laws and regional variations

Portugal is small, but its rules vary by region, particularly regarding short-term rentals.

• Alojamento Local (AL) Restrictions: To rent your property to tourists (like Airbnb), you need an AL license. To combat housing shortages, the government has suspended new AL licenses in high-density areas, including Lisbon, Porto, and much of the coastal Algarve.
• Interior Areas: Incentives often exist for buying in the interior or low-density regions, where AL licenses are still available and property prices are significantly lower.

Renting out your property: is it allowed?

Yes, foreign nationals can be landlords. However, the strategy depends on the type of rental.

• Long-term rentals: Generally encouraged. You can rent to private tenants. Rental income is taxed at a flat rate of 25% for non-residents (though expenses can often be deducted).
• Holiday rentals (AL): As mentioned above, this is becoming harder in major cities due to the license suspension. If you buy a property that already has a license, check if it is transferable – often, they are not transferable upon sale.

Buying land in Portugal

Can Americans buy land? Yes. Whether it’s a plot for a custom villa (terreno para construção) or agricultural land (terreno rústico), the rules are the same as for buying a house.

However, due diligence is critical. Ensure the land is actually zoned for building. A “rustic” plot might not have permission for a residential dwelling, or may legally only allow for a small agricultural support shed.

Always verify the Viabilidade de Construção (viability of construction) with the local town hall (Câmara Municipal).

Contributor

Freddie @ Expatica

Consulting Portguese sources as an English speaker

Modern internet browsers have a “translate” option for websites in Portuguese. You can use this to browse untranslated websites, such as the tax portal, Portal das Finanças.

Getting a mortgage: should I get one in Portugal or the US?

It is rare for US lenders to offer mortgages for properties located in Portugal. Most Americans finance their purchase through a Portuguese bank.

• Portuguese Banks: They are generally willing to lend to US citizens.
• LTV (Loan-to-Value): While residents might get 80-90% financing, non-residents typically get 60% to 70%. This means you will need a substantial down payment (30-40% plus taxes).
• Requirements: Expect to provide tax returns, pay slips, bank statements, and a credit report. The debt-to-income ratio is strictly scrutinized.

The verdict: should you buy a house in Portugal as an American?

Pros

• Lifestyle: High safety, excellent climate, and a relaxed pace of life.
• Cost: While prices have risen, property remains cheaper than in comparable coastal areas in the US (like California or Florida).
• English proficiency: English is widely spoken in the real estate and banking sectors.
• Stability: A secure legal framework for property rights.

Cons

• Bureaucracy: The process can be slow and paper-heavy compared to the US.
• No Golden Visa: Buying a home no longer grants automatic residency rights.
• Taxes: High transfer taxes (IMT) add significantly to upfront costs.
• Rental Restrictions: Restrictions on short-term rentals in popular areas limit income potential for some investors.

Useful resources

AIMA (Agency for Integration, Migration and Asylum) – For official information on visas and residency.

Portal das Finanças – The Portuguese Tax Authority portal for NIF and tax information.

Bank of Portugal – Information on banking regulations and mortgage lending rates.

Wise – For moving money internationally.