Which foreigners buy the most luxury homes in Portugal?

Portugal remains a destination of choice for the purchase of luxury homes, having been considered the seventh most international luxury residential market in Europe in Knight Frank's The Wealth Report 2023. But who buys the most luxury homes in Portugal? The main foreign owners are the British, followed by the French. In addition, digital nomads have also been responsible for boosting this market in recent years. Let's have a closer look at the details. 

According to The Wealth Report 2023 - the annual report of international consultant Knight Frank that offers a perspective on world wealth, prime real estate, investment and world trends - "France has the most international luxury residential market in Europe," followed by Spain, Italy, the United Kingdom and Greece. In this list that brings together the 10 most international 'prime' residence markets in the European space, Portugal appears in seventh place. 

Foreigners are investing in property across Portugal Vera Gorbunova on Unsplash

Looking at the countries of origin of luxury homeowners in Portugal, the same report indicates that those who have the most homes in the high-end segment in the country are foreigners from the United Kingdom, France, the Netherlands, the USA and Spain. Completing the list are the Indians and Brazilians.

In the survey carried out as part of this report - which included 500 participants among private banks, consultants, intermediaries and "family offices" - Knight Frank questioned where people would be more likely to buy a new home. European participants admitted that if they considered buying a new home they would be more likely to look in Spain, the USA, France, Italy and Portugal. Americans, on the other hand, are more likely to buy a new home in the US and soon after in Portugal.

What is it about Portugal that attracts so many foreigners?

"The coastal markets of Italy, France and Portugal offer a lifestyle that most people sought during the pandemic," by presenting a low cost of living and relatively easy access, details The Wealth Report 2023.

Specifically, "Portugal has seen the arrival of many young people with high incomes in recent years - such as surfers working in the technology sector in the US, for example." The report highlights that the arrival of digital nomads in Portugal shows "few signs of slowing down" and also states that "many technology companies are opening offices in Lisbon, so the market looks set to attract an even greater number of investors between 2023 and 2024".

But Knight Frank warns that the "growth of digital nomads will be limited by tax rules". "While workers may be attracted by the idea of moving their computer from a desk in Frankfurt to a table in a café in Lisbon, their companies may not be so eager," it begins by explaining in the report. "Freelancers and the self-employed have paid the price for the move so far, facing tax complications, social security issues and legal considerations at work that have limited their freedom as workers," the report goes on to add.

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While destination countries are keen to simplify tax rules - as is the case of Portugal which has created a visa for digital nomads - promoting the cooperation of the countries from which these remote workers come may be "more challenging", they stress in the document.

The truth is that obtaining passports, visas and citizenship is a key point to stimulate the global mobility of wealthy investors. Portugal and Spain are pointed out in the report as countries that stimulate visa programs for investors. But the reality is changing: the end of golden visas in Portugal is on the table, although there are still visas for digital nomads and start-up visas, which aim to attract foreign entrepreneurs, for example.