Starting a new life in Portugal and buying property should be an exciting experience but in many cases, expat buyers find the process can be overwhelming and complicated. This is mainly because everything is in Portuguese and the process of buying property in Portugal is different to your country of origin, as well as a different legal system.
Is buying property in Portugal a good investment? With turbulent house prices in Portugal due to the coronavirus pandemic and some uncertainty in the market, 2021 could be the perfect opportunity to buy property in Portugal as a foreigner. If you choose to move to Portugal in 2021 and buy a property, it is very important to familiarise yourself with the main differences between buying property in Portugal and other countries. So that you can avoid the typical mistakes that people make when buying property in Portugal, check out our guide of the potential pitfalls of buying property in Portugal for foreigners.
Not knowing what you’re buying
When buying a property in Portugal, it’s very important to do as much research as possible. This includes researching previous owners, something a lawyer can help you with, to researching the area you're searching in, including the property, how long it takes to buy a property in Portugal, house prices in Portugal and so on. On top of all of this, it’s very important to know exactly what you’re buying and what you’re getting yourself into. This is particularly important when it comes to buying rural properties in Portugal, as often they are the post problematic due to having land attached, issues with the title deeds and a lack of administrative records.
Not taking extra costs into account
When buying a property in Portugal, although house prices may seem cheap to begin with, keep in mind that you will have to pay other expenses other than just the price that the property is on the market for. Extra costs come in the form of taking out a mortgage which is different depending on whether you’re a resident in Portugal or not, while there are also a range of taxes and fees to be considered, such as notary and registration fees. In some cases, the extra costs of buying a house in Portugal can be up to 11% of the purchase price.
Only thinking about the summer
When buying property in Portugal, many people focus their search on a property that they can use in the summer as a holiday home, but if you plan to use the property all year around, you need to keep this in mind during your search. If you visit and buy a property in Portugal in the summer months, keep in mind that this is the high season and that things may not be the same in the winter.
This is especially common in certain areas of the Portuguese coast, such as parts of the Algarve, where certain towns are full of life and tourists in the summer, but in the winter, shops and restaurants close their doors. If this is a worry for you, then you might want to focus your search in one of Portugal’s larger cities or provincial towns, such as Porto, Lisbon, Cascais or Estoril, where the coast is still accessible and there will be life all year round.
Avoiding real estate agencies
Expats who are buying property in Portugal are often put off the idea of using a real estate agency as this can mean yet more fees and paperwork. However, in this case, the extra effort is worth it and in the long term could save you money and time. By avoiding estate agencies in Portugal, you may miss out on your dream home, as well as the fact that agencies can be very helpful when it comes to negotiating the price of your future home and getting your way round all the documents needed to purchase property, especially if you’ve never bought a property in Portugal and don’t speak Portuguese.
Not seeking professional help
Seeking help from experts is key when buying property in Portugal, especially if you are unfamiliar with the process of buying in the country. By doing this, you will save yourself from making many of the mistakes mentioned above. In this case of a complicated purchase, such as a rural property with some of the aforementioned issues, the help of a lawyer is essential, as well as that of a real estate agent in other cases. A lawyer in Portugal will be able to help you with all the necessary paperwork, especially if you don’t speak fluent Portuguese, while there are many lawyers in Portugal that also specialise in helping foreign clients buy property, many of which speak English.